The government maintains that there is no alternative to the appalling draft Withdrawal Agreement (which has achieved the near impossible feat of uniting Remainers and Leavers in opposition). But there is an alternative.
President Tusk offered the UK, in March and again in October, a Canada-style Free Trade Agreement involving zero tariffs and including services. To ensure that it covers the whole UK means replacing the Irish Protocol in the draft agreement by a commitment by Ireland, the EU and UK that they will retain an invisible Irish border, as all have pledged to do if there is no Withdrawal Agreement.
As Donald Tusk rightly stated, this is the only possible agreement compatible with the referendum and Conservative Manifesto pledges to leave the Single Market and Customs Union.
To get such an agreement we must be ready to leave the EU on WTO terms. The more convinced the EU is that we are prepared to do so the more willing they will be to revive the Canada+++ option. If they doubt our readiness to do so they may take it to the wire and only return to the negotiating table after we have left.
Unfortunately, to frighten MPs into voting for the draft deal. the government has undermined its own negotiating position by demonising the idea of leaving with “no deal”.
Apart from being bad tactics, it is strange to denigrate trading on WTO terms. Six out of the EU’s top ten trading partners trade under WTO rules, including Britain’s biggest national export market, the US – with which we have a surplus, unlike the huge deficit in our trade with the EU.
UK exports to countries we trade with on WTO terms have grown three times faster than our exports to the Single Market since it was established.
As it happens, as Trade and Industry Secretary, I helped negotiate the agreement to set up the WTO – which is designed to provide a safe haven for trade – and also implemented the Single Market programme. Since then, UK exports to the EU single market have grown by a miserable 18 per cent whereas our exports to the rest of the world have grown by 72 per cent. We run a huge deficit in trade with the EU against a surplus with the rest of the world.
If we leave the EU on WTO terms there would be four obvious pluses.
First, far from “crashing out” we will be “cashing in”. We keep £39 billion. The Lords’ (heavily pro-Remain) EU Committee concluded that: “Article 50 allows the UK to leave the EU without being liable for outstanding financial obligations”. We can confidently submit the issue to international arbitration.
Second, it ends the corrosive uncertainty – economic and political – which would continue for over two years under the Withdrawal Agreement.
Third, both sides will solve the Irish border issue by administrative measures without a backstop or border posts – as they have promised if there is “no deal”. Mr Varadkar has said: “In… a no deal scenario … we won’t be installing a border between Northern Ireland and Ireland, and everyone knows that.”
Junker reassured the Irish Parliament that “the European Union will not impose a border, customs posts or any other kind of infrastructure on the frontier”. And the Britain has said it will not “require any infrastructure at the border… under any circumstances”. We already tackle smuggling of tobacco, alcohol, red diesel, (because of different duty and VAT rates) and traffic in drugs and arms without border checks.
Fourth, once the Irish border issue is resolved administratively, we can take up Tusk’s offer of a Canada style free trade deal covering the whole UK. Moreover, if both sides commit to such a deal we can, under the WTO treaty, continue to trade with the EU on zero tariffs while it is being finalised.
What about the downsides? Most relate to the fear of queues of lorries at Dover.
Scares about import delays are particularly ludicrous since Britain will control its own borders. Why on earth would we prevent things we need from entering our country? HMRC expect roughly the same number of physical checks of vehicles at Dover as at present because checks are based on risk – notably smuggling of tobacco, drugs and illegal immigrants. None of these will change after Brexit. Tariffs are not collected at the port but paid electronically like VAT.
Moreover, HMRC says it will “prioritise flow over compliance”. It will wave vehicles through to avoid queues even if initially customs declarations have not been properly completed.
Past problems at Calais made fear of congestion backing up across the channel more credible. A deliberate go-slow at Calais was unlikely because it would breach three treaty obligations. Moreover, France is afraid of losing business to Belgian and Dutch ports so is installing extra lorry channels, a new inspection post for animals and a machine to scan trains at 30km per hour at Calais.
Similarly, the EU is legislating to ensure that planes will fly, lorries drive, and Airbus gets its wings.
Little of this has been reported in Britain, so fears persist. This is partly because of an inherent bias in the media. A press mogul said: “the headline ‘small earthquake, no-one killed’ won’t sell newspapers”. So the media has highlighted fears of shortages of medicines, food, clean water etc (which were credible before action had been taken to ensure smooth flow through the ports) but given little coverage to news that they have been prevented.
We should not waste our energy deploring this. To moan about the media would be like a ship’s captain complaining about the sea. However, it is deplorable that our state Broadcaster seems unwilling even to acknowledge that measures have already been taken or are underway to prevent these fears materialising.
Experience suggests that if one prepares for potentially major problems, they turn out to be minor. A WTO Brexit may well turn out nearer the Millennium Bug than Armageddon.
Then we can focus on what is far more important than the terms of leaving – how we use the powers once we take back control of our laws, money and borders. That is an exciting challenge.