An outward facing Britain

BREXIT IS A GOLDEN OPPORTUNITY FOR UK TO TRADE WORLDWIDE

By Suella Fernandes

Conservative MP fpr Fareham

As a country, we are about to embark on a great journey of national self-determination. We must rediscover and build our identity as a great trading nation, an outward looking nation and a nation that has every reason to be confident in its future.

The Government has rejected staying in the Customs Union and the Single Market. This is absolutely right. If we are to realise our aspiration of becoming a self-governing, global-facing democracy, we cannot remain signed up to the Single Market or Customs Union.

The question now before Government and Parliament is how we best implement the will of the British people to make the most of this great opportunity. So now is the time to think carefully about what direction we wish to take our trade policy.

First, the EU Customs Union has not served the UK’s trade interests. The EU has a risible track record of securing trade agreements with key markets for the UK. Yes, some are significant, such as with South Korea, Mexico and South Africa, but the lack of trade agreements with major economies such as India, the USA and China, and the absence of multilateral trade deals is holding back the world economy. The recent deal with Canada took about 10 years but almost failed.

The UK can only strike new trade deals with non-EU countries if it is outside the Customs Union because of the Common Commercial Policy which binds all its members. Once the UK has left the EU and then seeks new free trade agreements with the world’s largest economies, as the Legatum Special Trade Commission has indicated, we will see and estimated 50 per cent increase in global world product over 15 years to reverse the stagnation in the Eurozone.

Second, EU protectionism is harming Britain, ultimately harming consumers. They are denied products such as cheaper sugar from developing states in order to protect less efficient farmers in Northern Europe . The EU Customs Union has pushed food and clothes prices up, by virtue of the Common External Tariff, estimated at over £500 a year for each household. By opening the market, lowering the barriers to entry to new competition, prices fall and consumers benefit. Choice and quality also goes up as producers no longer have a captive market or a monopoly.

Third, the EU’s trade agreements have focused too much on goods, ie agriculture, textiles, audiovisual and automotive, rather than liberalising services  and new industries? When 80 per cent of the UK GDP is services, and there are no real agreements on services then the UK is losing out. The EU economy does not aim at building the economies of the future.

Last, the protectionism of the EU severely penalises farmers and workers in developing countries when they export to the EU? For example, the EU imposes a tariff of 7.5 per cent on roasted coffee coming into the single market but 30 per cent on processed cocoa products such as chocolate bars. The effect of these tariffs is to stop African countries from accessing the EU market on a level playing field. More damaging is that there is no incentive for African countries to invest in vitally needed industrialisation, like agricultural processing, packaging and distribution. This is exactly the kind of investment Africa requires in order to lift itself out of poverty towards self-sufficiency. The EU’s policy of stifling competition and cannot claim to be a friend of fair trade.

Trade is the best way to lift developing states out of poverty, increase jobs and growth.

That’s the case for leaving the Customs Union and we have seen prime minister Theresa May set out very clearly in the Lancaster House speech her intention to do just that- emphatically, unequivocally and definitively.

In leaving the EU, the UK’s new settlement should embrace free trade, enabling Britain to control its flows of foreign workers. A free trade agreement with Britain is certainly in the interests of Spain and Italy, who run a trade surplus with Britain. For Germany, which exports 50 billion euros more to the UK than Britian buys from Germans, it’s a no-brainer. Cars, chemicals and machinery are strong export sectors for Germany which are all at risk if Britain copies EU tariffs on cars and imposes its own regulation on hazardous chemicals. The same goes for French farmers and winemakers who don’t want to see duties on their exports. Moreover, the French government has strong invested interests in the British nuclear and transport sectors, including rail and automotive.

The benefits for both sides are clear. Brexit is a golden opportunity for Britain.