Strike a deal

There are still trade options open for Britain

This year’s referendum was the most divisive, polarising event in Britain’s postwar history – which is why you would have thought the government would wish to respect the result delivered by one half of the country but secure the trade that the other half believes is so important.

Instead, the United Kingdom government has prioritised politics over economics and we can hardly complain if the European Union’s remaining 27 member states do the same.

The economic choice we are making is stark. We can go one way or the other. Continuing in the single market, we would want input to the EU’s future rule-making; continued access to Europe’s financial services passporting regime; and a single EU/UK regulatory rulebook to permit maximum ease of trade.

The alternative is life completely outside of the EU, jostling with others for market access at the trading bloc’s external tariff border with no special access or privileges. The latter is what people mean by hard Brexit.

We can try for an enhanced status which would soften the hard landing. This means trying to negotiate a bilateral treaty with Brussels that gives tariff-free access to our export goods and market access for services on the basis of equivalence or compatibility of our national licensing regime with those of the EU 27.

But we should have no illusion about this. UK businesses will be in a weaker position. If Britain is out of the single market, the EU 27 national governments will have more discretion to discriminate against us in their markets and we will not have access to the European court system to arbitrate and enforce the rules. Our services will not be playing on an even playing field anymore in Europe.

It would also be more difficult to treat the EU as one vast factory floor across which goods, parts and components in lengthy value chains can be moved back and forth across borders without customs barriers getting in the way. This is what Nissan, Toyota, Ford, Airbus and Siemens, along with many others do at present. It is a big reason why they invested in UK plants in the first place.

Over time, big businesses will be able to adjust. Many will move to the continent leaving their workforces behind. It is the small- and medium-sized companies – those with narrower profit margins – who will be hit harder or put out of business altogether.

Staying in the single market raises many policy issues, chief among them being movement of people. This needs to be controlled not suppressed. Our economy needs mobility of labour from the EU just as many UK citizens want to work, study or retire in Europe.

Could we find a post-Brexit trade deal with the EU 27 that gives a balance of advantages to both sides? I am confident we could. But it would require a clear prior commitment by us to staying in Europe and creating the most constructive, positive relationship with the EU. This is lacking and accounts for the current poor prospects for the coming negotiation.

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Peter Mandelson is former EU commissioner for trade

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Comments: 7...

  1. On December 14, 2016 at 10:31 am Alf responded with... #

    Peter Mandelson is former EU commissioner for trade… and a twitching political corpse.

  2. On December 14, 2016 at 11:09 am Richard MacKinnon responded with... #

    Setting up trading agreements with the EU immediately after voting to leave is not leaving the EU. The original concept was a European common market that evoloved into the monster that was (note the tense) the EU.
    We can still trade with Europe without politicians drawing up trading contracts. The UK and before it Scotland, England Wales and Ireland traded with Europe for thousands of years.
    Peter Mandelson is a former EU commissioner for trade, of course he is going to agrue for trade deals, to admit that they are unecessary is to admit his lifes work has been an irrelevance.

  3. On December 14, 2016 at 4:03 pm Christabel responded with... #

    What about our influence? What about our MEPs and Commissioners? What about the enormous opportunities? What about Grundvig and Erasmus and all the other programmes that benefit us? What about the sharing of ideas and experiences? The freedom to travel, live life and love in other countries? All this we want to throw away? It’s wrong. The EU is a beautiful thing.

    We need to put all our energies into overturning the result of this glorified opinion poll, and get back to energetically embracing the twenty-first century, making common cause with friends and allies and giving that huge raft of opportunity that is the EU, to our children and grandchildren.

    Stop trying to polish a turd Labour. There’s no ‘soft’ brexit, so let’s get in and be full players in the EU and get the best out of it.

  4. On December 14, 2016 at 4:30 pm Sean responded with... #

    I am a great believer in the truth behind the words of the old song -“it’s not what you do it’s the way that you do it”. So when respondents like Alf and Richard M use insulting language rather than reasoned and objective comment, I tend to dismiss the integrity and validity of their views. To me the points that Lord Mandelson makes are perfectly sensible and deserve a sensible and serious response.

  5. On December 14, 2016 at 6:27 pm John Woods responded with... #

    Sorry about this, Peter, but the days of New Labour, where a group of the brightest minds in government took along look at what was required, what was possible, and proceeded on that basis. Today we have John Major in a skirt as PM and three Cabinet Ministers who hate, hate, Europe and the EU and consider our membership of the EU was a mistake. What an be expected will be a disaster and they will claim it a triumph.

  6. On December 14, 2016 at 8:50 pm Mick Hills responded with... #

    I don’t think Germany and France and others will give any concessions at all. They dare not because that will just signal a stampede out of the Eu as everyone else asks for the same. Britain with it’s action has not just removed its self from the EU it has put the EU’s future in jeopardy. All the talk of deals being struck will be wrong because Europe have no alternative but to force a tough Brexit. There futures depend on it.

  7. On January 11, 2017 at 12:02 am wayne green responded with... #

    Whilst I am deeply aware of the current situation regarding Brexit, Labour should be strong enough to reject this fraudulent referendum and be strong enough to say ‘NO’ we do not agree to this referendum……. (who said we cannot reject this and say No). Politicians should have the strength to stand up and be counted and say we wish to stay in the centre of the EU policy making process to seek the changes required to bring the EU closer to the people.

    I fully support Peter but go further. Regarding the WTO as the EU is a member we have a strong position, outside on our own we wont get a better position. Again regarding the commonwealth, it was noted to me by one commonwealth person. have you considered we might not want to deal with you, we can choose Again, regarding the USA and UK, many chose the UK as a landing place for the EU, now our position will weakened regarding access. . where I go further and make no apology, we have over the last five years key Tory anti Europe back benchers targeting the Tory front-bench to then project this upon the public via miss-information, raising a false national perception. We have seen the right wing and quite racist UKIP, free ride on the anti globalist movement and also ferment right wing national agenda’s with the cleavages of the rupture of social bonds of society. They have fraudulently used EU funds for national political gain regarding the referendum, with serious miss information, causing fear in local communities and now we see the debate centre on the issues of the strange mystical mythical word sovereignty once given from God, to kings and queens, then to elites then to then goverment and how we see EU and other citizens reduced to the politics of discourse of the immigrant, foreign worker to the asylum seeker, where humans are now seen as a threat to the sovereignty of the nation in with the EU as a threat. Sovereignty everyday is penetrated by international global companies. No one seems to moan about that. Just on what I have stated above gives way to challenge the triggering of article 50 and to seek to say all has been very fraudulent and therefore we reject null and void this referendum, and that is not taking account of the other facts, such MPs have the right to reject all if they are strong enough via all means All that is wrong regarding British social economic concerns are internal. We have since 1945 slowly seen the issue of immigration being used for political gain. it can be noted in the past industry and business often went against government policies on limiting immigration. I for one will keep strong and keep arguing for the UK to be part of the the EU and then pass the flame onto my children to keep alive as we must look to the future for all we owe it to the future next generations who see their future stolen away by others.

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