A university report has rubbished claims that the UK is ‘taking back control’ by exiting the European Union after concluding that Brexit has resulted in ‘minimum freedom for maximum hassle’.
A technical report for the French Hauts-de-France region conducted by Bob Hancké of the London School of Economics along with two co-authors has unpacked in greater detail the Trade and Cooperation Agreement (TCA) between the UK and the EU.
The study points out that one key aspect of the UK’s new freedoms has been overlooked – that trade agreements with countries beyond the EU cannot come into force without large repercussions on UK-EU trade, “which makes sovereign free trade agreement negotiating extremely difficult”.
If new trade agreements conflict with standards and norms set in Brussels for the free movement of goods (and even services), the EU can unilaterally suspend its free trade on those goods and services.
“Given the relative size of the EU as the UK’s main trading partner, accounting for almost 50 per cent of UK exports, the EU’s shadow therefore hovers over all trade talks,” Hancké notes.
He concludes that, fundamentally, EU-UK trade depends on the UK adopting EU standards.
“If the UK were to negotiate a free trade agreement with a third country that violates EU standards, the EU can suspend the parts of the TCA that govern free trade in these markets – with significant losses for UK businesses and potentially the economy as a whole.
“Avoiding those problems means choosing the lesser evil between the (EU-related) losses and (non-EU related) gains in trade. The size of the EU, and the weight in the UK’s trade basket, almost invariably leads to one conclusion for the now sovereign UK: minimise the EU-related losses by adopting EU standards.
“According to a wry joke in Central Europe, socialism was the long road between capitalism and capitalism. Is Brexit the long road between the EU and the EU?”
Related: Freeports of ‘no economic benefit’ – Treasury watchdog concludes
