LEADING THE WAY OUT OF THE EU

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Tueasday 18 December 2018 

Whether its a bluff or genuine, the government is preparing for a no deal. Leave.EU looks into why that’s no bad thing.

Following today’s Cabinet meeting, “No Deal” is now being treated as a serious option by the government. As Theresa May fails to summon a renegotiation of her maligned withdrawal deal from Brussels, a clean severing of relations with the EU on March 29 now looks more likely than ever.

Indeed, the government will shortly advise Britain’s six million businesses to begin immediate preparations for a No Deal outcome. Had such preparations been made earlier, the prime minister would have had greater leverage from the beginning and “Irish backstop” would not have entered the national vernacular. Better late then never though.

But what would a No Deal actually mean? Through that all-too-common phrasing of “crashing out”, Remainers would have you believe Britain would be consigned to absolute chaos. The population would be deprived of clean drinking water and lack vital medicines. However, the truth is very much different and resoundingly positive.

Director of the International Trade and Competition Unit at the Institute of Economic Affairs Shanker Singham has put No Deal fears into perspective, arguing they are “greatly exaggerated” Singham argues a No Deal scenario would pose more problems and questions for the rest of Europe than it would for the United Kingdom.

EU in for a hiding

It is as much in the interests of the European Union to a do a deal with us, if not more so. This is particularly true given the huge volume of agricultural and industrial goods imported from the continent into the UK every day. Instantly diminished access to our markets would be a nightmare for thousands of businesses across Europe. EU anxiety over a no deal is nicely captured by the tweet below, another hysterical rant from arch-Eurofederalist Guy Verhofstadt.

Singham has based much of his analysis of a No Deal Brexit not being a disastrous outcome for the UK on the fact that the EU will be motivated to protect its own-self interest. It will not want to add burdens on commercial enterprise with the implementation of checks and transport permits. That last gasp effort to smoothen the the transition will work to both sides’ benefit.

He predicts food prices would fall due to reduced tariffs and increased competition. The United Kingdom is the fifth largest economy in the world, the idea that the EU would deliberately seek to create barriers to trade lacks credibility.

It is not difficult to find evidence a No Deal would be no bad thing. The United States is our our single biggest export partner. Britain also enjoys substantial trade with New Zealand, Australia Japan and China, none of whom have entered into meaningful trade agreements with the EU – Brussels claims it has signed a pact with Japan, it is yet to be implemented. It is the WTO that rules.

The shock absorber

Theresa May’s deal would affect our ability to trade with the United States, something Donald Trump has expressed concerns about. The American President has strongly suggested the UK would be “first in line” for a comprehensive trade deal with the US in the event of a true Brexit. Exports to America were worth £100 billion in 2016, more than twice as much as exports to any other country.

Telegraph business editor, Ambrose Evans-Pritchard has described the European Union as “slow-growth zone that missed much of the IT revolution of the last quarter century”, which is characterised by a “dysfunctional monetary union”.

We would be wise to focus on trade deals with markets experiencing greater growth. Evans-Pritchard argues many “experts” (who have continually made bad predictions) since the 2016 vote would be surprised at how quickly things go back to normal. Like Singham, he believes the initial shock of leaving the EU would be absorbed by tearing down tariffs on imports.

No Deal allows us to set our own terms for trade and negotiate our own trade deals. It leaves us open to a truly global future, free from the bureaucratic clutches of the regulation-obsessed European Union.

A No-Deal is hardly a step into the unknown. So far, the EU has only lassoed South Korea and Canada into meaningful trade deals. Our trade with the EU as a share of the total declines by the day meaning our exposure to the WTO world increases, even without Brexit. Given the huge gains in terms of sovereignty and economic independence of leaving the EU proper, it is difficult not to get excited about accelerating the transition out of Europe and into the world.