I've been looking at back-of-envelope numbers for the Tory manifesto's "aim" to have free trade deals cover 80% of UK trade within 3 years👇🏽.
It's an extremely ambitious call
1. Total UK trade (goods+services) 2018 = £1,289 billion
2. Goods = 65%
3. 80% of total = £1,038bn
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It's an extremely ambitious call
1. Total UK trade (goods+services) 2018 = £1,289 billion
2. Goods = 65%
3. 80% of total = £1,038bn
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The Tories aim to have free trade deals cover £1,038bn of UK trade, more than UK goods trade alone.
4. A goods-only FTA with the EU would cover £545bn of that (smaller if regulations diverge but let's keep it simple), leaving just under £500bn to be covered by non-EU deals
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4. A goods-only FTA with the EU would cover £545bn of that (smaller if regulations diverge but let's keep it simple), leaving just under £500bn to be covered by non-EU deals
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5. Trade in goods with the US, Australia, NZ (mentioned in the manifesto) plus Canada, Japan & China totals about £150bn
Leaves £350bn more to meet the 80% target, even assuming a free trade in goods with China can be done in 3 years (no one thinks it can, even in 5-10 yrs)
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Leaves £350bn more to meet the 80% target, even assuming a free trade in goods with China can be done in 3 years (no one thinks it can, even in 5-10 yrs)
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6. Clearly these free trade deals would have to include services to meet the 80% target.
The best case is continued UK-EU trade in goods and services = £648bn (that's no longer a basic UK-EU deal, so no way of doing it by end of 2020)
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The best case is continued UK-EU trade in goods and services = £648bn (that's no longer a basic UK-EU deal, so no way of doing it by end of 2020)
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7. To meet the 80% target, UK deals with non-EU countries would have to cover about £400bn of trade. Goods-only deals with US, AUS, NZ, CAN, JAP, CHN would only cover £150bn.
8. Add Norway, Switzerland, etc and goods-only deals would still fall short.
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8. Add Norway, Switzerland, etc and goods-only deals would still fall short.
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9. So there will also have to be meaningful agreements in services with major non-EU trading partners to meet the 80% target. And the goods deals would probably also need content on regulations, recognition, etc.
We are now talking about much more complicated deals.
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We are now talking about much more complicated deals.
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10. Remember the calculations include China, which we should probably rule out.
11. Negotiating a whole raft of complex free trade agreements with the EU and non-EU partners SIMULTANEOUSLY in 3 years is almost certainly impossible
(Yes, these were back-of-envelope numbers)
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11. Negotiating a whole raft of complex free trade agreements with the EU and non-EU partners SIMULTANEOUSLY in 3 years is almost certainly impossible
(Yes, these were back-of-envelope numbers)
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P.S. A big problem is the meaning of "covered by free trade agreements".
Most people will assume it means the agreements will apply to 80% of UK trade.
It's not the same as saying "deals with countries accounting for 80% of UK trade". Most deals don't apply to all trade.
Most people will assume it means the agreements will apply to 80% of UK trade.
It's not the same as saying "deals with countries accounting for 80% of UK trade". Most deals don't apply to all trade.
Great minds, etc
Here's the article and a screenshot of the section on trade
openeurope.org.uk/today/blog/wha…
Details in this pdf file: …630ar9h2rsglp-wpengine.netdna-ssl.com/wp-content/upl…
openeurope.org.uk/today/blog/wha…
Details in this pdf file: …630ar9h2rsglp-wpengine.netdna-ssl.com/wp-content/upl…
