Sovereign Trade for a Sovereign Country!
Friday 1st March 2019: The UK’s successes in preparing for an independent trade policy are considerable, says international trade lawyer, David Collins*, and the UK should not throw in the towel on its Brexit negotiations. For the future, the entire country must be outside of the EU’s common external tariff for goods. It must also be free to establish its own regulations on goods and services outside the single market.
There was a good news story this week, but it slipped by un-noticed as the public had other preoccupations – the media’s relentless torrent of no-deal Brexit hysteria and the humiliating collapse of the UK government’s status as a serious negotiator of international treaties.
In fact the UK was accepted as a party to the WTO’s Agreement on Government Procurement, allowing British suppliers to continue to bid for government contracts in a £1.3 trillion market among the agreement’s 40+ strong signatories. This development comes with other good news.
Progress continues to be made in rolling over the EU’s existing FTAs. Thanks to the hard work of the Department of International Trade, the UK has managed to conclude various kinds of mutual recognition agreements with Switzerland, Australia, New Zealand, Israel, the US and others. It has been slow going to be sure and much more work is needed. But given the uncertainties surrounding our future relationship with the EU and the resulting control (or lack thereof) over our trade policy, the situation and what has so far been achieved is remarkably encouraging.
Add to this a number of other steps forward: the fact that the UK has submitted its schedule of tariffs commitments on goods and market access commitments on services to the WTO; that it has set up the Trade Remedies Authority to handle international trade disputes, and that it has received favourable signals from trade allies around the world, including most notably the United States. While Japan has shied away from a bilateral deal, it has expressed hope in the UK joining the Trans Pacific Partnership and there is every reason to believe that this mega-regional pact is within our grasp. There are many indications that the UK economy is healthy and will stay so in the months ahead regardless of Brexit uncertainties.
These things should now be to the fore despite the defeatist tone of some MPs who evidently intend to stop at nothing to keep the UK in the EU. For it is still too early to throw in the towel on our Brexit negotiations. Clearly taking a WTO Brexit “off the table” is a tactical mistake that will weaken the UK’s negotiating position. If anyone doubts this, just imagine whether the EU would have done the same? The answer is no – the EU would never have given away its bargaining leverage by cutting off the only exit route. Unable to walk away, by definition one must at some point accept what is on offer, no matter how poor an offer it is. With a safe, WTO-backed Brexit ready to go whenever Brexit finally takes place, the UK is empowered to pursue meaningful renegotiation of the badly disappointing Withdrawal Agreement. This will allow it to secure a binding (and hopefully early) end date to the Backstop after which point the UK will hopefully enter into a comprehensive FTA with the EU and, most crucially, begin life as an independent, trading nation.
The actual date of Brexit, now unlikely to be as promised on 29 March, is ultimately irrelevant. If a short delay or transition period is necessary to reach a mutually advantageous trading relationship with the EU, or simply to prepare logistics for a no-deal eventuality, then so be it.
What is important is that the future relationship must be one which provides for the UK’s trade sovereignty, meaning one in which the entire country is outside of the EU’s common external tariff for goods and free to establish its own regulations on goods and services outside the single market. While every effort must be made to simplify customs procedures at the Irish border, the UK must also be entitled to impose Rules of Origin checks, as this is necessary for it to sign FTAs with other countries. Without an independent trade policy, there is no chance to capitalize on the growth of global markets and the efficiencies engendered by a more pro-competitive economy at home. Worse than this, there is no real Brexit, and therefore a betrayal of the trust placed in elected politicians by the British public who would be left deceived and disenfranchised. This would be the saddest news of all.
*David Collins is Professor of International Economic Law at City, University of London. He previously practised commercial litigation in Toronto and was a prosecutor for the Attorney General in Ontario. His publications include An Introduction to International Investment Law (Cambridge, 2016) and The World Trade Organization Beginner’s Guide (London, 2015). For Politeia he has written Negotiating Brexit: The Legal Basis for EU & Global Trade (4th edition, July 2018).