Thread by @KellerZoe

Of course Boris Johnson can get a good post-Brexit trade deal done in a year. Here's why 
by David Campbell Bannerman (Former Conservative MEP and member of the European Parliament's International Trade Committee)
telegraph.co.uk/politics/2019/…

The day after the PM stunning and decisive electoral victory the sneering negative forces of the Remain Alliance were already back: they have now switched to a supposed need for a ‘softer Brexit’, citing the claimed lack of ERG influence now, assert that the deal would have to be

a bad one in such a short timeframe, and only deliverable if the UK remains in lockstep with the EU on its regulations - such as ‘dynamic alignment’ with its Single Market laws, including new laws not just existing ones.

Basically, they now claim we must dance to the EU’s tune without having any say – just like with their beloved Customs Union.

All this is utter and complete nonsense. 10 years scrutinising numerous EU trade deals in the EU Parliament makes me weep at such bizarre and erroneous interpretation. The supposedly all-knowing and pompously judgmental BBC ‘Reality Check’ is just as unhelpful in its analysis.

The actual reality is that the UK and EU can strike a bold and comprehensive free trade agreement which safeguards most of the claimed economic benefits of EU membership and do so by the target date of the end of next year. How? Well let’s look at these facts:

1.
The EU has already offered us a full and comprehensive trade deal 3 times. The EU grandstanded when it looked like Brexit might be reversed, and talked of a *Canada -*, but actually they need what I have termed *Canada +++* and the EU has already offered us such a deal.

Tusk and Barnier accepted a SuperCanada. The 7th March 2019 offer from Tusk was “for a FTA covering all sectors, with zero tariffs on goods. Like other FTA it should address services. I hope that it will be ambitious and advanced.” Ambitious = nearly 0 tariffs.

Barnier: “a new and ambitious partnership… a FTA with zero tariffs and no quantitative restrictions for goods (with…) close customs and regulatory cooperation and access to public procurement markets.”

Yet opponents of Brexit talk in terms of a poor deal, the crumbs we will receive from the great EU table that they are generous enough to give us. This reflects a dismal anti-British view of our country: weak, small, irrelevant, powerless. That is untrue and unpatriotic.

2.
The EU needs a trade deal with the UK more than the UK needs a trade deal with the EU.
This week, former Die Welt journalist Thomas Kielenger said: the EU cannot “afford to be stubborn or refuse to compromise” as the EU needed a trade deal more than the UK did.

Giving the UK a poor trade deal would be self-harm. The German and EU economies are already hovering on the edge of recession. These are the realities:
▪️ The UK will become that largest single market in the world for its goods and services, larger than the USA, China and India.

▪️ The EU has a £96 billion goods deficit with UK. Germany exports nearly 1/4 of all its EU exports to UK. The German economy is in difficulty (Brexit opens up a £84 billion hole in EU finances over 7 years). Without a deal, Holland would lose 4% GDP and Belgium 3%.

▪️ With a WTO no-deal the EU will be paying £13 billion more in tariffs a year on that £96 billion, whilst the UK will be paying £5 billion of tariffs.
▪️ The EU needs continued access to the largest financial market in Europe and the world – London.

▪️ Whilst it is true 80% of the UK and EU economies are services, the EU Commission have found that the EU single market in services remains highly under-developed, and especially so when compared with goods.

▪️ From 31st January 2020 UK will be free to do its own trade deals around the world and this will pile pressure on the EU to conclude a beneficial deal quickly, just as China and India have felt the pressure of an EU-Japan FTA being concluded.

Trump has already offered a very fast UK-US deal that he says will be better than that with the EU. There is India and China too, which the EU have not done trade deals with, and Australia and New Zealand – which the EU is negotiating FTAs with but are on WTO terms just now.

If the UK negotiate a -12% tariffs on Australian, New Zealand and Californian wines, a WTO exit means Spanish, Italian, French wines have +12% tariff on them. The highly competitive UK wine market will swing away from EU wines: UK is the largest consumer of champagne in the world

In the services area FTA are ever more advanced. The failed EU-USA TTIP would have opened up service contracts for the vast US federal and state governments: if UK negotiates such access it will be gaining considerable competitive advantage around the world.

3.
A trade deal CAN be done in a year.
There is yet more nonsense spoken about a deal taking far longer than a year, and therefore a ‘no deal’ becoming a reality after December 2020 (or a basic GATT24 style temporary deal).

The inspired move by Boris to make an extension illegal concentrates minds wonderfully, particularly those in the EU who may wish to play games through unnecessary extensions. The idea that a shorter period means we will get a worse deal is also ridiculous and counter factual.

Those predicting that we must extend have no idea how trade deals work. Why do trade deals take time? Because of negotiation rounds on a range of tariff lines and technical issues between mini armies of negotiators and experts, and these take time, resource and political capital.

A FTA is only legal under WTO rules if over 90% of tariffs are removed (as it gives a better deal to one WTO member over other WTO members – licensed discrimination). The EU CU has nearly 20,000 such tariff lines (40-50% on beef, 70% on chicken, 375% on sugar beet) to remove.

Each time a tariff line – or set of tariff lines – is negotiated away, vested interests become involved. Farmers and food producers play a big role. This is why in the EU-Canada Ceta 7% of agricultural tariffs have been retained – in short: French farming interests objected.

They love to tell that trade deals often take around 7 years (such as CETA), and point to the fact that some trade deals have taken up to six years to ratify formally though national parliaments, the classic being the regional Wallonia Parliament blocking the CETA deal.

They don’t acknowledge the actual underlying factors. CETA was held up for 2 of 7 years by the EU seeking to interfere in Canada’s domestic legislation. The EU (in its familiar neo-colonialist manner) tried to dictate Canada to reduce the length of holding prisoners before trial.

CETA did need the ratification of 28 national parliaments over those 7 years. But the deal is ‘provisionally applied’ in most areas before ratification takes place, and now the EU law has changed in a fundamental way on this.

Since the ECJ judgement on the EU-Singapore FTA, any new EU FTA only requires approval from EU institutions – (Commission, EU Council and EU Parliament), NOT 28 national parliaments IF the chapters on investment and investor protection are removed, and dealt with separately.

It is also possible to do a trade deal in 1 year if you set a deadline. Look to Tony Abbott, former PM of Australia. The Australians did 3 trade deals – not just 1 – with their 3 biggest customers (China, Japan, South Korea) in just 1 year back in 2013/14.

But the UK is light-years ahead: we are merely seeking to replicate arrangements and not to create a new reality. So Britain starts with:
▪️ zero tariffs
▪️ zero quotas
▪️ the same harmonised Single Market rules
▪️ the same product standards
▪️ the same professional standards

4.
The difficult areas of negotiation can be quickly resolved.

The EU demand for access to UK fishing waters (a United Nations matter) to be retained as a price for market access to the EU Single Market: unusual request for a trade deal.

Leaving the Common Fisheries Policy, a feature of the Withdrawal Agreement, means that the UK will regain its sovereign rights under UN agreements to control its 12 mile territorial waters and our Economic Exclusion Zone of 200 miles.

The EU thinks they have got us over a barrel because they do need access to British fishing waters as now but they argue that much of the UK fish landed by British fishermen is not wanted in the UK and has to be sold to the EU.

Full access to the EU SM should be maintained for UK fish (they need it and want it; we could say 40% tariffs on EU cheeses or 12% wine in response if we chose to). We should then agree a separate fisheries agreement to manage those waters, as the Falklands or non-EU Iceland do.

Having to sign up to EU SM rules (as Norway under EEA or May’s terrible Chequers deal) is another red herring. Boris’s excellent move to avoid the ‘Level Playing Field’ requirements in his deal is not technical detail but fundamental to the kind of partnership with the EU.

We need control of our laws in order to conclude FTAs around the world, otherwise we'd be stuck in the EU CU with those 20,000 tariffs and all the laws set by the EU, without a UK voice, and we couldn't have proper FTAs. This is why Trump memorably reacted so badly to Chequers.

But this is not one way. The EU jealously guards its right to legislate: all EU FTAs manage convergence/divergence of legislation and regulation without a need to sign up to rigid rules. See Chapter 21 of CETA: there is a Regulatory Forum. This Forum manages dynamic change.

In short: if there is a major issue over divergence – one side cannot accept such variation – then ultimately a chapter or the deal, say financial services, could be scrapped. If the issues become so fundamental then the entire agreement may need renegotiating.

But it can and is being handled within the normal agreement framework and can be for the UK deal. I was in Peru discussing the way they handle divergence within their EU-Peru/Columbia/Uruguay deal.

Some MPs claimed the Government dropped earlier concessions on the WAB (such as reassurances on workers’ rights, on helping vulnerable young refugees) but, as Barclay has pointed out, these have just been switched to other pieces of legislation.

5.
MPs' push to shape the negotiating mandate is bizarre.

Trade deals are not normally negotiated on Parliaments (UK or EU). Now the EU member state in the EU Council sets the negotiating mandate, the EU Commission does the negotiations, the EU Parliament ‘take it or leave it'.

This of course works both ways, so an enlarged post election ERG may not be able to vote it down either – but since they are in total agreement with Government policy now, this seems academic.

Conclusion
The new outbreak of new negativity and problem seeking is just the sort of activity Boris attacked as work of ‘doomsayers and gloomsters’. There must be focus, discipline and deadlines, but a trade deal in just 1 year is feasible and there is a huge will on both sides.

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