Free trade deals

We can only negotiate free trade deals with the USA, China, Brazil, India, Canada, New Zealand, Singapore, Australia and the others if we leave the EU and its internal market. If we stay part of the customs union or if we stay in the EU we are banned from even discussing freer trade with these important partners abroad. As the government has set up a department expressly to promote our trade in this and other ways, it follows they rightly intend to take us out of the EU and its internal market.

People object and say that it takes many years to construct a Free Trade Agreement. They point out when we leave the EU we will end up with WTO tariffs on the schedule the EU imposes on other foreign countries already. This would enable us to trade reasonably with the EU, but there is no reason why they and we would wish to limit our ambitions to such an outcome.

The reason it often takes a long time to conclude a free trade deal is each country negotiating actually wishes to protect certain features of its economy and limit free trade. A process of bargaining ensures to try to get the barriers removed to your exports whilst keeping up some barriers against imports. Our negotiation with the EU would not be like this, as we already have barrier free trade in goods with them and reduced barriers in services! If we and they wish we merely say we want to carry on with it, and it is already negotiated and recorded.

To speed it all up and get rid of the uncertainty the easiest cause is to say either carry on as we are, or go to WTO existing terms. Neither needs renegotiating and each is already written down. Our current deal would be registered as an FTA with the WTO to make it legal for a non member of the EU. It would take longer to sit down and negotiate a half way house deal, less freedom than now but more freedom than under WTO. As WTO suits our profile of trade better than theirs we might as well just offer either our current arrangements or WTO.

Under WTO we would have the nice problem of how to spend all the tariff revenues on their large imports into the UK. Spent intelligently this would remove adverse effects from tariffs on our exports.

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  1. Lifelogic
    Posted October 17, 2016 at 5:36 am | Permalink

    Exactly get on with it and stop dithering on runways too.

    • Lifelogic
      Posted October 17, 2016 at 10:02 am | Permalink

      Gatwick is the best one to do first, but both are clearly needed with a rapid shuttle link.

      You say “spent intelligently” is this likely from a government that is going ahead with Hinkley, HS2 and subsidises endless on and offshore wind farms, PV panels and other green lunacy all over the place? One that want gender pay reporting, worker/customers on company boards and endless other red tape.

      They best way they could spend it would be tax cuts and far better roads.

      • Hope
        Posted October 17, 2016 at 5:14 pm | Permalink

        No need to pay anything to the EU, free trade on WTO if need be, no ECJ, no need of freedom of movement, no single market access con etc. We voted to leave in its entirety none of this soft hard Brexit nonsense that the remainers are trying to get a narrative traction on.

        Why does the media give Clegg air time when he led his party into electoral oblivion, twice, because the public does not like his views! Miliband the same. The same people who promised us they would clean up Westminster, Clegg declared he would shut the gates of Westminster! Why not act on their promise to the public? Why do they they think we would believe a word they say when they act so badly.mclegg stating an EU army was fantasy in his debate with Farage. It turns out Clegg lied!

      • Hope
        Posted October 17, 2016 at 5:20 pm | Permalink

        This needs to be pointed out to Sturgeon, that if she wanted in the EU and out the UK what an economic disaster for Scotland. I am sure the majority who voted to remain the U.K. Would be upset. The majority also need to rein in Sturgeon or get rid of her.

  2. Sam Stoner
    Posted October 17, 2016 at 6:15 am | Permalink

    It’s a great idea. Except every single politician in Europe, from Lisbon via Brussels to Warsaw and Prague, has said that the UK will not be allowed to cherry pick the bits of the single market it likes. And every single one of those politicians has a veto
    You really need to listen more carefully

    • zorro
      Posted October 17, 2016 at 10:07 am | Permalink

      Veto on what? It is you who is not listening. They CANNOT stop us leaving. It is not a question of accepting their arguments and negotiating around them. They can have FTA similar to now or WTO MFN tariffs. The choice is theirs to make…… You really do not understand do you? We are no longer supplicants asking permission to leave. We are going and are keen to create a sensible trading environment for all parties. The ‘Single Market’ cannot constrain us and they cannot prevent access to it as many other countries trade adequately with it. They can talk about ‘cherry picking’ all they like, but it is not our game. They will trade with us and we will trade with them, and we are not constrained by their veto….. Please pay more attention and work to support the government like a good civil servant…. ?

      John, it is strange that so many people do not realise how the EU has constrained our ability to negotiate more favourable trading arrangements with other countries. It’s a big world ? out there….. The reason that the EU is so long winded with trade deals is that it had to try and satisfy the often conflicting demands of 28 separate and distinct countries!


    • S Lang
      Posted October 17, 2016 at 10:28 am | Permalink

      You really need to read this article more carefully. If one or more veto carrying on as we are, we can trade under WTO terms. What is so difficult to understand?

      • sjb
        Posted October 17, 2016 at 9:06 pm | Permalink

        Although the UK is a member of the WTO its membership terms are rolled-up with the EU’s. To get our own membership terms means we have to negotiate with all the other (160+) WTO members. How long will that take?

        • Denis Cooper
          Posted October 18, 2016 at 6:55 am | Permalink

          If nobody objects to continuation, a couple of weeks?

      • Sam Stoner
        Posted October 18, 2016 at 5:11 am | Permalink

        WTO terms means destruction of our services sector, plus non tariff barriers everywhere you look (It also means tariffs on goods but that is trivial, as everyone bar Mr Redwood seems to know)

        Oh, and the idea of using money raised from tariffs to subsidise our producers is illegal under WTO law

        • Augustyn
          Posted October 18, 2016 at 2:18 pm | Permalink

          Re illegal.

          There are many ways to skin a cat some of which do not involve sharp instruments and others don’t even need a cat.

          Where there is a will, there is a way.

        • David Lister
          Posted October 18, 2016 at 4:58 pm | Permalink

          @Sam, I agree that WTO terms is completely destructive. I also thought the tariffs were relatively insignificant compared to the no-tariff obstacles. But after checking the EC Trade website the tariffs on Cheese are up to 60% for Third Countries operating outside a Trade Agreement. Ouch!

          My question is why is the WTO also destructive to the services sector. Can you point to what is the issue here please.

          • Sam Stoner
            Posted October 19, 2016 at 5:24 am | Permalink

            Sure. The issue is that the WTO is mainly about goods and has little coverage of services. So trade in goods under WTO terms is more expensive. But trade in services under WTO rules just doesn’t happen. If you want to sell services in India, get based in India, if you want to sell services in Brazil, get based in Brazil etc.
            The EU’s services market, while imperfect , is as good as it gets judged by global comparisons. And it is vital to our economy. And the likes of Redwood want to leave it

          • David Lister
            Posted October 19, 2016 at 2:53 pm | Permalink


            Thanks. This has motivated me to look into services agreements further. It seems that the existing WTO arrangements are covered under GATS (General Agreement of Trade in Services) but that a more extensive framework is being discussed known as (TiSA) Trade in Services Agreement (from Europe Commission website).

            The European Services Directive has advantages over GATS [ref: SN/EP/6730] but has acknowledged limitations.

            TiSA is currently being negotiated by 24 members of the WTO. They started formally in March 2013 and have had 11 rounds of discussions already. The EU is one of the 24 members.

            I suspect by the time Brexit comes about the UK will almost certainly just end up signing up to TiSA at which point it can claim a great success with a new trade deal! Whether it is as extensive as the Services Directive remains to be seen.

        • libertarian
          Posted October 18, 2016 at 7:00 pm | Permalink

          Sam Stoner

          “WTO terms means destruction of our services sector” Really in what way ?

    • Augustyn
      Posted October 17, 2016 at 10:59 am | Permalink

      You,do not seem to understand the subject very well. Access to the single market is not in doubt and the only question is under what terms. What Mr Redwood points out in his final paragraph is under WTO conditions the UK could, if it wished, use the tarrifs raised on imports into the UK from the EU to reimburse the tarrifs paid on UK exports to the EU. In other words UK exports need not be any more expensive than they are today

    • lojolondon
      Posted October 17, 2016 at 12:16 pm | Permalink

      YOU need to listen, Sam, to John and to reason : 1.The voters want out. 2. It was made clear before, during and after the referendum that out means out of the entire EU, not just some random parts of it. 3. The minimum of WTO terms are far more favourable for the UK than any form of EU agreement. 4. We do not care if they ‘veto’ (whatever that means) – we are their CUSTOMER – if any country wants to impose terms that will make their goods less compelling to UK customers, they are welcome to, that will damage their own economy, not ours. 5. When all the bluster is over, EU countries will be begging to sell to us.

      • David Lister
        Posted October 18, 2016 at 5:28 pm | Permalink


        Without Trade Agreements we would be unable to export to the EU.

        We need Mutual Recognition to comply against safety and environmental regulation. We need Border Inspection Points to be scaled to accept our food and animal livestock. Most trade would come to a halt without these practical issues being addressed.

        And under WTO Third Country schedules we would be hit with some quite ridiculous tariffs. Cheddar cheese is up to 60%.

        Please refer to: (EC) No 2204/1999
        .. for details on tariffs.

        • Peter D Gardner
          Posted October 21, 2016 at 1:38 am | Permalink

          Interesting choice f example. Cheddar cheese is made in UK. You should visit Cheddar Gorge, some time.

          • David Lister
            Posted October 21, 2016 at 10:55 pm | Permalink


            I jest, of course I know Cheddar Gorge – I’ve visited the caves myself.

            I only chose this as an example of a product that has a tariff restriction under EU WTO MFN rules. When we leave the EU the same tariff would apply. The EU would apply this duty for Cheddar Cheese entering the EU so our exports would be severely limited.

            It just goes to show how complex the trade and tariffs are. Every product is defined individually, there is no blanket ‘10%’ that can be assumed when we are outside the Customs Union or a Free Trade Agreement that some people assume.

            The consequences for trade would be hugely disruptive and many UK producers would be unable to survive.

            source: (p81)

    • Narrow shoulders
      Posted October 17, 2016 at 12:25 pm | Permalink

      Speech and action are two different things.

      We have resistance from business and MPs creating pressure to stay in the single market why do you think it will b different in other countries? They will have the same pressure to let us continue to have tariff free access.

      Strong negotiating positions are built by the side with the most robust case. We have the least to lose.

    • Bob
      Posted October 17, 2016 at 12:27 pm | Permalink

      According to
      “China trades over half-a-trillion dollars annually with the EU and pays no annual fee for access to the common regulatory regime. Obviously China has no problem with controlling immigration from Eastern Europe, nor does it see its national sovereignty constantly frittered away by qualified majority voting and foreign judges ruling over Chinese citizens.”

      Can this be true?

      • alan jutson
        Posted October 17, 2016 at 5:16 pm | Permalink


        See Guido Fawkes website, for more info.

        The USA trade to the EU is even more, over 2 trillion with the EU.

        The only enemy we have, is within our own shores and our own Politicians, who are almost acting like the hidden arm of the EU, trying to undermine our cause and negotiations at every turn.

        In many countries of the World they would be called traitors.

      • zorro
        Posted October 17, 2016 at 5:18 pm | Permalink

        All true


    • Lifelogic
      Posted October 17, 2016 at 1:18 pm | Permalink

      They will act in their own interests in the end and sensible deals will be done. What politicians say very rarely has much truth to it. They say what they think will make them popular at the time – it rarely does so in the end.

      This as we saw in spades from the many statements of Cast Iron, no Heathrow, low tax a heart, I will trigger article 50 next day and stay on anyway Cameron and the IHT ratter, pension/landlord/tenant mugger and emergency budget threatener, interest rates will go up, George Osborne.

      What make politicians popular in the end is doing sensible things that actually work – alas so few do.

      Had you not noticed this?

    • Andy
      Posted October 17, 2016 at 3:00 pm | Permalink

      So WTO it will be then. We can negotiate FTA with Australia (ruin the French wine trade), New Zealand (EU meat imports and dairy imports etc) etc, etc, etc.

    • David Lister
      Posted October 17, 2016 at 4:47 pm | Permalink


      It’s also the case that, according to recent polls, 59% of people indicate they want the UK to remain on the Single Market. It seems illogical to me that there are people claiming a clear mandate for WTO only trade when opinion polls indicate otherwise. So much for democracy!

      • Denis Cooper
        Posted October 18, 2016 at 7:29 am | Permalink

        52% actually voted to leave the EU and its Single Market.

        • David Lister
          Posted October 18, 2016 at 5:20 pm | Permalink


          Actually they didn’t. The evidence of the last poll by the Adam Smith Institute before the referendum indicated that most people thought that by leaving the European Union they would maintain access to the Single Market.

          The only evidence point you have is what was on the voting slip. Leave the EU. You are speculating on what was the reason why people voted.

      • stred
        Posted October 18, 2016 at 7:38 am | Permalink

        We are told we need to be ‘in’. Now it’s’on’.Were the pollsters asking whether they wanted to remain in, on or have access to the Single Market?

      • bluedog
        Posted October 18, 2016 at 9:02 am | Permalink

        Democracy consists of finding out what 35 million voters want in a referendum, held less than six months ago, not a random push poll of 1500 on a wet Wednesday night..

      • Narrow Shoulders
        Posted October 18, 2016 at 9:06 am | Permalink

        Access to the single market not remain in the single market.

      • libertarian
        Posted October 18, 2016 at 7:05 pm | Permalink

        David Lister

        You really aren’t very bright are you?
        1) A small poll isn’t democracy

        2) They asked about access ( the confusion that all you non business types struggle with) not membership

        3) there was massive democratic vote to leave the single market

        Do try at least to understand reality

        • Sam Stoner
          Posted October 19, 2016 at 5:20 am | Permalink

          “3) there was massive democratic vote to leave the single market”

          There simply was not. There was a (narrow) vote to leave the EU. The single market was not on the ballot paper. Leaving the EU does not necessarily mean leaving the single market – look at Norway. If you want to leave the single market as well as the EU, well, you need another referendum

          • Edward2
            Posted October 19, 2016 at 8:22 am | Permalink

            You are mistaking membership of the Single Market with access to the single market

          • libertarian
            Posted October 25, 2016 at 7:21 pm | Permalink

            Sam Stoner

            Oh dear the EU IS the single market, without the single market there is NO EU. We voted to leave it and that means leaving the so called single market too ( good). As a businessman trading freely I dont need or want the single market. Its just a device for remainiacs to try to hang on to some form of EU membership

            There was a MASSIVE the highest recorded vote for anything. 17.4 million to leave the EU . Deal with it.

            If we had another referendum you’d lose that by an even bigger margin.

        • David Lister
          Posted October 19, 2016 at 8:42 am | Permalink


          To make it clearer for you so you can judge for yourself:

          “.. the YouGov poll also showed that 57pc of Britons believe the Government should consider the Norway option in the event of a Brexit vote, even though free movement with the EU would continue. Just 24pc said that such an EFTA arrangement should not be on the table.”

          Reference: Telegraph, June 11, 2016
          Source Data: YouGov,

          I am sure that we both agree that we want the best for the UK.

          The difference we have is that:

          (1) I don’t believe it is possible to achieve a favorable bespoke FTA with the EU in a 2 year period. This is my opinion based on the experience of Canada, Switzerland and other countries negotiating with the EU.

          (2) A WTO arrangement with no trade agreement would not provide equivalent access to the Single Market, and would greatly restrict physical trade. Without Mutual Recognition Agreements and introduction of Rules on Origin it would in fact be impossible to trade physical products at all.
          source: European Commission, Rules on MRA

          In my opinion, entering into negotiations with no reasonable fall-back position is destined to lead in a very poor outcome for the UK.

          What exactly do you disagree with in the above?

          • libertarian
            Posted October 25, 2016 at 7:17 pm | Permalink

            David Lister

            Heres the thing , I run many businesses I’m used to trading all over the place. It is perfectly possible to sell goods and services to anyone anywhere ( trade) . The single market is not remotely attractive or necessary. It is quite possible to sell things to European customers. Should tariffs be applied then it affects the price paid by the customer. If that means French buyers of Coldplay albums or German buyers of cheddar cheese have to pay more for the products they want then the politicians in those countries will feel the anger of their voters. It really is vanishingly simple. People who have never been in business struggle with very simple concepts because they’ve never actually done it it in real life.

    • acorn
      Posted October 17, 2016 at 4:51 pm | Permalink

      True Sam, little Malta or Slovenia can play their “Joker” veto card; or, demand a King’s ransom for their Brexit approval.

      There are 164 nations in the WTO now. Everything is done by “consensus”, they only vote for goodies for emerging economies. It has to be 3 to 1 majority even then. Getting consensus from that lot is measured in years, if not decades.

      Nobody on this site knows the difference between a (Free?) Trade Agreement and a Customs Union; just two of the WTO menu of options. Using import tariffs to “subsidise” domestic sectors is forbidden under WTO rules. There has been no mention of WTO “quotas” – particularly agriculture and fishing – allocated to the EU; or, how these quotas will be apportioned to the UK.

      The biggest problem will be agriculture and food. The subsidising of farmers and farming is always the game stopper in the WTO. The EU economy is seven times bigger than the UK. The EU can get deals at WTO, that the UK alone, against 163 other members, will just not be allowed to simply inherit from the much bigger EU. Then there is the ultimate weapon. EU preferential Rules of origin.

      “… instruments used to determine if a product exported from a beneficiary or partner country may be considered as sufficiently linked to that country and therefore originating there to the purposes of receiving from the EU the tariff preference granted to that country.”

      If you are a country that imports components and just screws them together to make products; and, the screwdriver is foreign owned …?

      • Peter D Gardner
        Posted October 21, 2016 at 1:41 am | Permalink

        No. Brexit agreement in the EU is by QMV. A new entanglement, however, would require unanimity. The government plans two agreements: one on Brexit, one to tie the UK to the EU in a new entanglement.

    • Peter D Gardner
      Posted October 18, 2016 at 2:15 am | Permalink

      The EU has free trade deals with non-EU states that do allow the partner countries to agree in which bits they’ll trade freely and which they won’t. Turkey even belongs to the EU Customs union for certain economic sectors. An arrangement that would not be acceptable to UK would be joining the single market via EFTA or similar, which does indeed require acceptance of all the four EU freedoms. Even there, Norway and Iceland are not subject to the CFP nor the CAP. Norway cleverly leapfrogs over the EU by representing itself at UN level in fishing and maritime matters, thus influencing policy before it is handed to the EU for implementation.

      Furthermore, don’t confuse public rhetoric with negotiations.

  3. Excalibur
    Posted October 17, 2016 at 6:17 am | Permalink

    Only marginally off topic, JR. ‘India completes mega defence deals with Russia’, trumpets the Financial Times. As if this were something new. I have mentioned in these columns before that India is a very poor customer for us, much preferring the French and the Russians.

    This despite major concessions as a member of the Commonwealth, and in such areas as Intra-company transfer visas for short and long term staff. These concessions are granted too to members of their extended families. What one asks is the point of David Cameron’s three day lavish hosting of Najendra Modi last year, and his own ‘State visit’ to India in February, 2013, if we don’t get the business ?

    • Mitchel
      Posted October 18, 2016 at 9:04 am | Permalink

      Perhaps we are seen as too close to the US,particularly in defence and security matters.

      Being “isolated” as the US and it’s mouthpieces keep claiming in respect of Russia obviously isn’t such a bad thing!

  4. Nig l
    Posted October 17, 2016 at 6:29 am | Permalink

    I see it is now reported that Theresa May is looking at paying billions to the EC to get access to their markets. We didn’t vote for that. Please remind her of that.

    • stred
      Posted October 17, 2016 at 10:01 am | Permalink

      Well, she has just bought us all double price electricity, is buying a very expensive train set and an airport extension 2.5 x as expensive as the cheapie. So what’s a few tens of billions to calm the nerves of city boys, especially if you live with one. Off to buy another pair of posh clogs. It’s only money.

      Mine has just told me she wants to change my lino after a few years. It keeps up demand though, just like Mr £16k a week in the BoE likes.

      • stred
        Posted October 18, 2016 at 9:27 am | Permalink

        It isn’t Teresa’s fault, but thinking about ‘intelligent spending’ it is interesting to read that our nearly complete largest ever aircraft carriers ordered by Gordon and to carry F35B s are probably going to be incapable of defending themselves. In fact, because of long range and much cheaper missiles, they will not even be able to operate near a shoreline, to say nothing about submarine attack and fast missile catamarans.

        This is also relevant toour decision to build windfarms way out to sea and depend upon interconnecting undersea cables, as the drones and submarines could cut this power supply.

    • zorro
      Posted October 17, 2016 at 10:09 am | Permalink

      John, please tell her that we do not need to pay them to allow us to trade with them. We do not have to ‘dash’ them to buy/sell goods!


    • Jagman84
      Posted October 17, 2016 at 11:51 am | Permalink

      It should be the other way around, with the trade deficit we run with the EU. Some commentators need to read up on their subject, before embarrassing themselves.

      • acorn
        Posted October 17, 2016 at 3:45 pm | Permalink

        Aren’t we lucky to be able to run a huge trade deficit with the EU. We get to play with them BMWs and drink French and Italian wines; all in exchange for bits of paper with a picture of the Queen on them.

        This will work fine as long as the foreigners selling all this stuff into the UK, are prepared to hold / save assets denominated in Pounds Sterling. They will continue to do that, as long as the Pound has an acceptable level of conversion into their own currencies; AND, the UK economy is expanding at a rate to keep Sterling assets gently appreciating. Not just Chelsea mansion prices!

        Foreign central banks will be happy to hold Pounds as “foreign reserves” against issuing some more of their own currencies, to pay the guys in Germany, who made the BMWs, who do not want to be paid in Pounds Sterling and prefer Euros.

        As you say, “Some commentators need to read up on their subject, before embarrassing themselves.”

    • Narrow shoulders
      Posted October 17, 2016 at 12:28 pm | Permalink

      This leaver voted to restore the decision making process to the UK where the government can be voted out if they perform poorly.

      Single market membership does not allow UK to make its own rules and gives the establishment the get out that “the EU demands it” when making decisions.

      Tear the plaster off and see how the wound heals.

  5. Roy Grainger
    Posted October 17, 2016 at 6:33 am | Permalink

    When Fox or Davies says something about Brexit terms No 10 slaps them down saying that is their “personal opinion”. When Hammond’s briefers fill the newspapers with his opinion then No 10 says nothing. One can only assume therefore they agree with him ?

  6. Mick
    Posted October 17, 2016 at 6:43 am | Permalink

    Good points Mr Redwood, it’s a pity the media don’t follow your thinking instead of giving airtime to clogg/millipede/Sturgeon and all the other traitors to the UK, it’s a pity there isn’t a GE looming it would give me great pleasure to watch these parasites crawl back under the rocks they came from

    • Lifelogic
      Posted October 17, 2016 at 3:06 pm | Permalink

      Are you sure no general election is looming? Mrs May’s lefty wet agenda surely only makes sense if she intends to go for a snap election. Anyway we we know soon, depending on what sort of budget we get from Hammond, if that option is being kept open.

    • Peter D Gardner
      Posted October 18, 2016 at 2:19 am | Permalink

      Very risky suggestion, a general election. The Remainers might win because GEs are decided on a basket of policies. You vote for the whole basket or none. There is no guarantee that the Conservative party would stand by the referendum result in its manifesto.

  7. Jerry
    Posted October 17, 2016 at 6:44 am | Permalink

    “If we stay part of the customs union or if we stay in the EU we are banned from even discussing freer trade with these important partners abroad.”

    That is a little economical with the facts, the UK is not banned from discussing freer trade, it is just that we have to do so as a collective of the EU28 (as is), what you suggest is a bit like saying that Yorkshire is banned by the UK government from discussing freer trade with the USA or who ever…

    “The reason it often takes a long time to conclude a free trade deal is each country negotiating actually wishes to protect certain features of its economy and limit free trade.”

    Yes and sometimes that is good news, such as with TTIP. Also, how long would it take the Westminster government to conclude a free trade deal if each county (and indeed country…) in the UK was able to have a direct negotiating position, perhaps actually wishing to protect certain features of its own micro economy or indeed damage those of a competitor county, the reason why Westminster can conclude a free trade quickly is because it can -if needs-be- ride rough-shod over the wishes of those micro economies. But will that continue to be the case post Brexit, after all one of the prominent messages of the Brexit side was the need to repatriate democracy, ‘Yorkshire’ will surely demand their say, as will Tyneside and all the other Brexit winning areas, just as much as Scotland will.

    “To speed it all up and get rid of the uncertainty the easiest cause is to say either carry on as we are, or go to WTO existing terms.”

    Yes, carrying on as we are would be the easiest, but we have voted for a Brexit so that is out of the question, getting cold feet John?!… Of course we could, via A50, negotiate a similar trade deal but I suspect that to is out of the question since many of those voting for Brexit were sold the deal on the back of (largely unfounded) complaints about migrants, there is no way they will now accept Freedom of movement as part of any such free trade deal with the EU27 and that is the only way we will get a similar deal to what we have now, so that leave WTO rules and tariffs – which will likely be a very high-cost Brexit for the UK…

    “Under WTO we would have the nice problem of how to spend all the tariff revenues on their large imports into the UK.”

    Well perhaps not. Would customers really be happy to pay 10% more for their EU27 made cars, or would they simply buy tariff-free Far Eastern or perhaps even USA & Australian made cars, would customers really want to pay 10% more for white goods, or discretionary food and drink [1] imported from the EU27. So if there are any tariff revenues to be used by HMT then I suspect that it will go into funding a 10% reduction in VAT at the checkouts to off-set the 10% tariff at the dockside. Indeed because such a purchase tax reduction would have to be across the board, or at least commodity, some of our actual Brexit bonus (not paying the EU membership fees) might end up off-setting lower purchase tax receipts from non tariffed imports!.

    [1] some of which might have a much higher WTO tariff, wine is one such product if I recall

    • Edward2
      Posted October 20, 2016 at 6:18 am | Permalink

      As an exercise in pedantry your post should be put up for an award.

      • Jerry
        Posted October 20, 2016 at 1:21 pm | Permalink

        @Edward2; Welcome to the real world of international trade and industry, never mind law, “Pedantry” are the second names of such negotiators, unlike political spin doctors such as yourself.

        • Edward2
          Posted October 21, 2016 at 8:11 pm | Permalink

          Real world

  8. Gerry Dorrian
    Posted October 17, 2016 at 6:58 am | Permalink

    Well said! In reality, the biggest free trade between the UK we have is, obscenely. Let’s not only protect our economy in a network of free states each working for the best deal, but return to the days when our air is too pure for any slave to breathe.

  9. Mark B
    Posted October 17, 2016 at 7:08 am | Permalink

    Good morning.

    Our kind host states that if we stay in the Customs Union we would be banned from having trade deals with other nations. This is UNTRUE

    I do not confuse or advocate membership of the Customs Union, but I do advocate EFTA / EEA membership which does allow the UK to negotiate free trade deals with the rest of the world. And EFTA memvership would, upon leaving the EU, guarantee the UK access to these markets, including China (Hong Kong).

    • zorro
      Posted October 17, 2016 at 10:11 am | Permalink

      You can negotiate trading arrangements but not a full FTA as this an EU competence!


      • zorro
        Posted October 17, 2016 at 10:11 am | Permalink

        Or incompetence!


      • Mark B
        Posted October 17, 2016 at 4:50 pm | Permalink

        Source material please.

        • zorro
          Posted October 18, 2016 at 8:44 am | Permalink

          Art 3(1)(e) TFEU


    • Denis Cooper
      Posted October 17, 2016 at 10:30 am | Permalink

      The EFTA states are not in the EU Customs Union.

      “The EEA Agreement provides for a free trade area covering all the EEA States. However, the EEA Agreement does not extend the EU Customs Union to the EEA EFTA States.”

    • Know-dice
      Posted October 17, 2016 at 11:32 am | Permalink

      Can you be a member of the EU & EFTA/EEA?

      From your link –

      “In the 1990s, the EFTA States concluded free trade agreements with a number of countries which subsequently became members of the European Union (Bulgaria, the Czech and Slovak Republics, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovenia). These agreements were replaced by the relevant arrangements between the EFTA States and the EU.”

      • Denis Cooper
        Posted October 18, 2016 at 7:25 am | Permalink

        Back in the day it was the Six in the EEC versus the Seven in EFTA, and even though the UK government had been instrumental in founding EFTA it decided to move over to the EEC. It was and still is one or the other (or nothing at all) not both.

    • Antisthenes
      Posted October 17, 2016 at 1:17 pm | Permalink

      EFTA/EEA has somethings in it’s favour especially as an interim measure. It would I believe be favoured by a large number of voters remainers and leavers alike. An impasse is very possible if the UK goes for a clean break as years of wrangling and feet dragging is a distinct possibility. Brexit will involve compromises so why not just get it over with immediately. Test the new arrangement and then open up the debate on whether the UK should go further or not.

      In any event the EU is doomed to fail as the project is deeply flawed and does not have the strength to weather another major economic crisis. Even without one it may collapse under the weight of it’s own contradictions and it’s lack of democratic legitimacy. So the need for total retreat is not necessary to behind the wall EFTA/EEA provides is enough as the EU will obligingly do the rest.

    • Andy
      Posted October 17, 2016 at 3:03 pm | Permalink

      EFTA would possibly be an idea, but not it the ECJ had any influence or there was Free Movement of People. If EFTA was revitalised this might be attractive for other EU States.

      • Mark B
        Posted October 17, 2016 at 4:57 pm | Permalink

        The ECJ has no jurisdiction over EEA members, but there is a parallel court set up to oversee them instead, and this relates strictly to the EEA Agreements.

        • Denis Cooper
          Posted October 18, 2016 at 7:26 am | Permalink

          To ensure EEA “homogeneity” the EFTA court shadows the ECJ.

    • Peter D Gardner
      Posted October 18, 2016 at 2:21 am | Permalink

      Mark B is confused. EFTA states are not in the Customs Union of the EU – which extends to some non-EU states but not to EFTA members.

  10. Caterpillar
    Posted October 17, 2016 at 7:11 am | Permalink

    Dear Dr Redwood, Whilst I am mostly willing to accept your post that these two options are (relatively) simple, undoubtedly someone will post that you are oversimplifying and don’t understand the complexities. Is it not possible for an independent party to rapidly confirm the simplicity of these two options so that the UK, EU and world can move forward. Which body /institution is able to do this?

    Off topic – will the Chancellor be reminding the BoE of the importance of the inflation target, after all the PM recognises the serious problems brought about by ZIRP and QE?(the BoE missed the opportunity to normalise back in 2010, and a few times since).

    • Sir Joe Soap
      Posted October 17, 2016 at 4:59 pm | Permalink

      No Carney is already signalling that he will ignore the inflation target. Everything hereon in changes “because of Brexit”.
      Perhaps he’ll slacken off a bit from the fairy tales now his target of $1.20 has been reached.
      We need a positive governor and a positive chancellor, not these poor substitutes for the grim reaper.

  11. Sean
    Posted October 17, 2016 at 7:16 am | Permalink

    If that is the case involving artical 50 now would be a wise choice.

    I’m getting pretty sick listening to the remoaners wanting to overturn the vote if the British sovereign, the people.

    If ever politicians, vote down Brexut, I will give up on British politicians and politics as democracy will be dead.

    • Bob
      Posted October 17, 2016 at 9:45 am | Permalink


      “If ever politicians, vote down Brexit, I will give up on British politicians and politics as democracy will be dead.”

      The bottom line is that there is one political party whose main raison d’etre is UK independence, the others are all wedded to the EU.

      They were kept from office by the FPTP system which works by polarising the vote.

      If independence is high on your list, then you will have to vote for it.

  12. agricola
    Posted October 17, 2016 at 7:35 am | Permalink

    By now, we your contributing group are I hope well aware of the best way to handle future trade with the EU, and the fall back WTO position should they prevaricate.

    I think we should concentrate on ridiculing the likes of Clegg, Clarke, Sturgeon, and the BBC, none of whom can accept the referendum result and it’s consequences. The BBC news and current affaires department has become a particularly pernicious organisation, well proven in it’s biased agenda. Nothing short of a wholesale clear out will suffice. We the electorate pay for it and should through Parliament be able to demand a more equable form of news coverage and political discussion. It is sad really because the political agenda of the BBC will eventually affect the whole organisation, which on the whole does a very good job.

    • David Lister
      Posted October 17, 2016 at 5:56 pm | Permalink

      It would be more constructive if you could demonstrate the details of how a WTO arrangement without any EU FTA would actually work. How will goods conformance be demonstrated, what about BPIS, who will invest in port facilities and when, how about finacial padsporting, etc.

      As this can all be done independently of Article 50 I am surprised that the details haven’t yet been presented. Is that because the practical implications haven’t been thought through?

      It’s worth looking at the EU treaties database to understand what is required should we wish to continue trade with the EU when outside the Single Market

      • libertarian
        Posted October 18, 2016 at 7:14 pm | Permalink

        David Lister

        Oh my word, please get a grip. You clearly have no idea how the day to day of trade happens in the real world.

        1) Goods conformance will be demonstrated in exactly the same way they have always been done with the 164 countries who trade with EU from outside

        2) The EU will have to establish any more BPI’s it needs and invest in its own ports, we already have ours in place

        3) What about financial passporting? You haven’t got a clue what it is even or why for the most part its irrelevant

        Seeing as you haven’t read or understood the EU treaties database I think thats a redundant piece of advice

        • David Lister
          Posted October 19, 2016 at 9:02 am | Permalink


          1) Those 164 countries have Mutual Recognition Procedures. We will need something similar, and this requires agreement. Exiting without agreement would prevent this. Those 164 countries that you refer to have entries in the Treaty Database at Europa – if you don’t believe me have a look. We would then need to demonstrate we have the tools in place to do Performance Testing – we don’t today because it can be performed elsewhere in the Customs Union (for example, this is how car safety and environmental testing is performed). Without this trade will come to a halt.

          2) The BBC news this morning (19th) led on how extra customs check would require investment in our main ports. This is my point, there has been non discussion on whether this is possible and whether our European trading partners can also support this. If not, trade will come to a halt.

          3) Financial Passporting. You are right, I haven’t got a clue and I wasn’t claiming I do. But I would like to understand what it means in the context of WTO only trade agreements, wouldn’t you?

        • David Lister
          Posted October 19, 2016 at 9:26 am | Permalink


          Regards the EU treaties database, its very straight forward to access:

          You will find that there are 1124 treaties in total, and can filter on any country. You might be surprised at the number of treaties that cover those countries that you may consider as WTO (e.g Australia, China, US). Australia lists 26 entries today but some reason there were 87 last week (but the site is under maintenance). I recommend you have a look.

          I would like to understand from Mr Redwood what subset of treaties are essential to the UK as these will have to be renegotiated in order to maintain similar access to the EU as for example the US, Australia .. or even Zimbabwe which has agreements on the price of cane sugar!

          • Sari
            Posted October 19, 2016 at 7:07 pm | Permalink

            You’re suggesting it needs nuance.

            Not a phenomenon with which Mr Redwood is familiar!

  13. fedupsoutherner
    Posted October 17, 2016 at 7:40 am | Permalink

    But would WTO make things we buy more expensive and then push up inflation as the lowered pound is now? Is there anything that can be done to help the public afford this?

    • Richard Butler
      Posted October 17, 2016 at 10:15 am | Permalink

      Had the result in the referendum gone the other way, the deficit would have got bigger.

      Running permanent balance of payment deficits amounts to borrowing growth from the future. Sooner or later, it has to be paid back and Brexit means it will be sooner. A weaker pound works by making exports cheaper and imports dearer. The effect, as after all the other devaluations and depreciations of the past 100 years – 1931, 1949, 1967, 1976, 1992 and 2007 – will make the economy less dependent on consumers and more reliant on producers. Lord Mervyn King, a former governor of the Bank of England, thinks the latest fall in sterling is a good thing and he is right.


    • Narrow shoulders
      Posted October 17, 2016 at 12:30 pm | Permalink

      We could buy British and subsidise our manufacturers with the tariffs that are being collected.

      At present EU rules prevent protectionist subsidies.

      • Jerry
        Posted October 17, 2016 at 3:30 pm | Permalink

        @NS; What receipts from tariffs if we people “Buy British” (opposed to buying EU27)?

        • Narrow Shoulders
          Posted October 18, 2016 at 9:12 am | Permalink

          A combination of the two Jerry. Apologies if this was too obtuse for you.

          • Jerry
            Posted October 18, 2016 at 5:16 pm | Permalink

            @NS; There will be no “combination of the two” if customers stop buying EU27 goods and services (or indeed raw materials) because of a 10% price hike due to tariffs!

          • Edward2
            Posted October 18, 2016 at 11:31 pm | Permalink

            There is two big “ifs” from you there Jerry.
            First one
            If we stop buying any goods at all from all 27 EU nations
            Really nil. Not a penny
            And the second big if we charge 10% tariffs and they charge us 10%
            Why bother if we offer a tariff free deal that won’t happen

          • Jerry
            Posted October 19, 2016 at 6:15 am | Permalink

            @Edward2; “There is two big “ifs” from you there”

            Whilst the comment from NS also contain a very big “is” too, that consumers in the UK will Buy British, my comment were no more speculative as the comments I was replying to – so once again you waste our hosts time because of your incessant wish to keep picking arguments with anything I say.

            “Why bother if we offer a tariff free deal that won’t happen”

            The above sentence makes no sense! But assuming you were attempting top suggest that the EU & UK will agree some sort of free trade deal. When will europhobes accept and understand that this is not about trade but politics. We will not have a free trade deals (with the EU27), not unless either the EU or Mrs May backs down on their respective political red lines. The EU are unlikely to give up their requirement for free movement of people, whilst Mrs May is unlikely to back down on her governments requirement that free movement must end. Also, of course, there is the other thorn in the side of the EU and some EU27 countries, that anything seen as a “successful Brexit” could become a blue print for other exits [1] and thus spell the end of the EU.

            [1] or separatist bids, should the SNP and (i)Scotland be rewarded

          • Edward2
            Posted October 20, 2016 at 6:25 am | Permalink

            Sorry if it was difficult for you to inderstand Jerry.
            Let’s try again.
            If WTO rules advise we should trade charging each other a tariff and one of us suggests a zero tariff trading deal I beleive both sides would agree to that tariff free deal.
            Politicians have to be popular to survive at elections and these type of deals will be popular with their voters.

          • Jerry
            Posted October 20, 2016 at 1:29 pm | Permalink

            @Edward2; But that would be a “trade deal” and for the UK to have such a trade deal with the EU means accepting their ‘Four Freedoms’, duh, do try and keep up!… Edward you really do not have a first clue! 🙁

          • Edward2
            Posted October 21, 2016 at 8:12 pm | Permalink

            WTO rules apply if deals are not made

      • Roy Grainger
        Posted October 17, 2016 at 4:52 pm | Permalink

        One reason Corbyn wants to leave EU is that it renders legal all his policies to nationalise the railways, subsidise the steel industry and so on. As things stand he couldn’t do any of those things under EU law.

  14. oldtimer
    Posted October 17, 2016 at 8:03 am | Permalink

    The simplest choice is the binary choice you set out. MPs demanding to know the UK negotiating position are not paying attention. Mr Davis has been, it seems to me, quite explicit about making a “generous offer” of a FTA for future trading arrangements. It is for the EU to accept or reject this offer. Mrs Merkel`s comments about “no cherry picking” (made in the context of the four freedoms) could just as well apply to a trade deal.

    I also read that the Treasury opposition is led by Mr Scholar, its top official. Presumably it was he who recently republished the Treasury scare story that appeared during the campaign. He has also apparently captured Mr Hammond as a sock puppet to promote opposition to the referendum result. Am I right about this?

    Reply I doubt he recycled the paper that reappeared.

  15. ChrisS
    Posted October 17, 2016 at 8:04 am | Permalink

    Several of us posting here regularly have previously suggested precisely this scenario.

    It is certainly the case that the 27 will try to drag out discussions for at least the two years because for as long as the discussions take place we will be paying £850m a month to subsidise their budget.

    There is no need for any discussion between Brussels, the 27 and ourselves over this.
    Inevitably it will take the 27 a period of time to reach agreement between themselves to turn down our free trade proposal however we should seek to limit this period by asking for a response in, say, three months.

    Because the free trade proposal will include our three red lines, a end to FOM, no budget contributions and leaving the jurisdiction of the European Court, it seems highly likely – inevitable, even – that EU intransigence on these matters will mean that the answer will be outright rejection. Further discussions will achieve nothing so we might just as well leave very quickly – remembering that the two year period is a maximum, not a set period.

    Why make the process any more complicated ?

  16. GE
    Posted October 17, 2016 at 8:06 am | Permalink

    The EU might wish to make things difficult for us as a deterrent to others who might wish to leave. (Not a reason for backing out of Brexit btw)

    Truly free global trade will likely have an impact on our farmers, but then our weaker currency will work in their favour.

    • Wessexboy
      Posted October 17, 2016 at 10:02 am | Permalink

      Our farmers struggle to provide 50% of our food. If trade terms dictate, they will provide more for home consumption and worry less about exports.
      As an ex-farmer I can assure you we had a better support system pre CAP!

    • Jerry
      Posted October 17, 2016 at 1:08 pm | Permalink

      @GE;“but then our weaker currency will work in [our farmers] favour.”

      Are you sure? Are not fertilisers basically costed (factory gate) in USD’s, if so a weaker GBP will actually work against UK farmers/consumers, just as many believe the weaker GBP is expected to cause a raise in refinery gate fuel prices because crude oil is also priced in USD’s.

      • Roy Grainger
        Posted October 17, 2016 at 4:54 pm | Permalink

        Jerry – You think the pound being weaker against the Euro and Dollar is a permanent feature ? Ha ha ha. Wait till an Italian bank goes under, or (some other bank ed) bank, then see what happens. You remoaners are such short-term thinkers.

        • Jerry
          Posted October 18, 2016 at 5:29 pm | Permalink

          @Roy Grainger; “Wait till an Italian bank goes under [or what ever might cause the GNP to rise]”

          Jam tomorrow then, so that’s OK then … always assuming that someone remembers to poor petrol onto troubles waters – but then currency speculators might just do that to the GBP, like they did during the ERM fiasco.

          “You remoaners are such short-term thinkers.”

          Quite the opposite, on the other hand you Breaxiters are such wishful thinkers, crystal ball sellers must do great trade selling their ‘snake oils’ at the UKIP conferences and Tory fringe meetings…

      • Edward2
        Posted October 17, 2016 at 8:08 pm | Permalink

        Over 70% of oil price for consumers is taxation.
        So a dollar price change has a smaller effect than you think.
        And farmers are given special red diesel reduced rates anyway.

        Fertilisers can be made in the UK if imports are expensive

        • Jerry
          Posted October 18, 2016 at 6:32 am | Permalink

          @Edward2; Your comment is irrelevant when crude oil is priced in USD, as I believe fertilisers are too, this is not a taxation nor tariff issue, it is an FX issue – try actually reading my comments before replying!

          • Edward2
            Posted October 18, 2016 at 5:55 pm | Permalink

            I do read your posts thanks for asking Jerry.
            My comment is not irrelevant.
            Many remainers are predicting huge rises in fuel prices due to oil being priced in dollars.
            But if over 70% is tax and the dollar has moved say 20% and barrel prices are at a very low 50 dollars the effect will be most likely be modest.
            Over recent years we have seen 1.50 a litre and under 1.00 per litre so current prices are in the middle range.
            Though I agree rises in fuel prices are unwelcome.

          • Jerry
            Posted October 19, 2016 at 6:37 am | Permalink

            @Edward2; “I do read your posts thanks for asking”

            With respect if you do read (and more importantly, understand) my comments then all you have done above is prove that you are trolling me! No one other than yourself will have read my comment as meaning “pump prices” when I specifically said “refinery gate” prices which is an accepted short hand to mean pre-fuel duty price (because some fuels are not taxed or are taxed less).

            As for the rest of your irrelevant comment, a couple of large ‘ifs’ in your crystal ball gazing, if the USD tanks, if the HMT chose to give up on a certain cash-cow…

          • Edward2
            Posted October 20, 2016 at 6:31 am | Permalink

            Quiet day Jerry?
            If tax on a litre of road fuel is over 70% then a movement in dollar exchange rates on barrel price will not have the dramatic effect you think.
            And barrel price is around fifty dollars.
            It was recently over a hundred
            And predicted by experts to keep rising
            Current barrel price is low.

          • Jerry
            Posted October 20, 2016 at 1:40 pm | Permalink

            @Edward2; You really do not have a first clue…

          • Edward2
            Posted October 21, 2016 at 8:14 pm | Permalink

            Well explain then Jerry
            Better than simply abusing others

  17. Richard1
    Posted October 17, 2016 at 8:12 am | Permalink

    The collapse of the Canada-EU deal and the likely collapse of the US-EU deal shows that it isn’t possible to do deals with the EU. Any attempt at a bespoke UK deal would be a waste of time as it will almost certainly be vetoed by some EU party with a say along the line. Therefore as you say it’s a binary choice – continue as now with no change at all or go to WTO terms.

    This being the case we need some strong signals from the government as to the UK’s openness for trade and attractiveness for investment. The Govt should go for the Heathrow runway extension, which risks less legal challenge, PLUS the new runway at Gatwick. It should also immediately turbo charge shale gas, we really can’t be held to ransom by lies and drivel from the green blob any longer.

    • Know-dice
      Posted October 17, 2016 at 9:45 am | Permalink

      Agreed –

      “Any attempt at a bespoke UK deal would be a waste of time as it will almost certainly be vetoed by some EU party with a say along the line. “

      That’s one good reason to get out of the EU, 1 of 28 really doesn’t give you any influence whatsoever.

      Better together -no- that really doesn’t hold any weight…

    • Roy Grainger
      Posted October 17, 2016 at 4:56 pm | Permalink

      The Heathrow e pension will never happen, it will be tied up in legal
      Challenges for more than a decade then PM Boris will cancel it.

  18. Chris
    Posted October 17, 2016 at 8:30 am | Permalink

    I am increasingly concerned by reports such as these, which seem to play straight into the Remainers’ hands, and which of course make a mockery of claims that we will not have to pay the membership fee to the EU and not be under their control any more:

    The R North blogsite almost seems to be supporting those Remainers who still wish to tie us to the Single Market. His site certainly provides them with useful ammunition. He argues that this could be an interim step in leaving, but my great fear is that Remainers would ensure we never got beyond that stage,and that we would never leave properly. Also the interim stage could present an ideal platform for reentering the EU at a later date, which fills me with great concern.

    I believe that we really have to act swiftly and decisively to make a break with the EU, and that those Remainers in key positions, who seem to be determined not to enact the will of the people, should be replaced by individuals with talent and vision, and who are determined to make Brexit a success.

  19. Chris
    Posted October 17, 2016 at 8:35 am | Permalink

    There do seem to be endless opportunities for us outside the Single Market, and this article about Iceland and Norway starting to hint at reviewing their membership of the EEA is interesting.

    Posted October 17, 2016 at 8:36 am | Permalink

    In the circles of power in Westminster they are doing just that , circling. We have lots brexit means brexit chants. MPs circulate and recycle Remain and Leave arguments. Previously unheard of notions of Hard and Soft brexit.

    Mr Cameron stated to Parliament just prior to the vote. “Out means Out….the next day after a Leave vote I will trigger Article 50…We will be out of the EU and out of the Single Market. ” ( Applause ) ( Nodding of heads on all sides )

    Cheers came from the Brexiteers. No contradiction to his words came from the Remain Camp. All MPs were signed up and continue to be signed up apart from childish bemoanings and gnashing of teeth to The Promise of Parliament to The People.

    Like vultures circling round with specific eye, MPs look for a tasty morsel that may delay and thwart democracy if only be repeating ad nauseum lost arguments. The Speaker of the House, certainly acting correctly according to protocol, permits bleating after bleating . His role and behaviour though obviously most correct are always compared by say trade union and political committees, national, regional town and ward level as bizarre as they expect The Speaker to behave like a Chair of their own meetings. They expect him to draw a swift veil over more unnecessary discussion and so many kaleidoscopic tangential points raised by the Groan Brigade of remainers. It is expected The Speaker would, as with a Chairman of a democratic meeting… as with the experiences of our people, suspend MPs who continually and persistently raise matters relating to “What has already been decided , recently, and, voted upon at every level.” He does not.
    So, out Parliament looks to outside observers in America and elsewhere, as a sham, a farce, a thing that encumbers good government and brings our nation into disrepute. makes a laughing stock of the so-named “Mother of Parliaments.” Makes a laughing stock of us! Contrast BBC Parliament with those debates in the American system via

    Parliament needs to get into the 21st Century with its debating structures and procedures. Stop wearing frock-coats and muppet-like daft wigs and tights. They are not a tourist attraction: they are a stupid blot on the landscape. The debates in Parliament in many cases are inferior to ones held across a table or two in a low class city centre pub with cheap pork pie in hand and a beer in a mucky glass. So I’ve heard.

  21. Peter Wood
    Posted October 17, 2016 at 8:51 am | Permalink

    I like this simplicity!

    Could someone in the new May government please work on separating the ‘inviolable’ connection between trade and freedom of movement of people. This is a political construct only, and we should argue against it. Freedom of movement of people only makes sense within a nation; we have made it clear that we do not wish to be a part of the ‘United States of Europe’, and therefore managed boarders are appropriate.

    • Sari
      Posted October 19, 2016 at 7:12 pm | Permalink

      I so agree.

      Why o why don’t these foreigners realise tge Brits know better?

  22. Democraticish
    Posted October 17, 2016 at 8:54 am | Permalink

    JR. People can and do agree and disagree with your expressed opinions. Few however can find much fault with your clarity. You make listening and reading the opinions certainly of Remainer MPs a mental chore without possible and worthwhile reward.Torture.etc ed

  23. Edward
    Posted October 17, 2016 at 8:54 am | Permalink


    You say:

    “Under WTO we would have the nice problem of how to spend all the tariff revenues on their large imports into the UK. Spent intelligently this would remove adverse effects from tariffs on our exports.”

    I need to educate myself more on WTO rules, however would the UK be mandated to impose tariffs on imports into the UK? I thought that WTO signatories are only bound by upper tariffs. The imposition of tariffs on UK imports is of course at the cost of UK public.

    More generally however, assuming we relied purely on WTO rules there being no agreement with the EU, how do you envisage the regulatory regime for mutual goods recognition working?

    • Denis Cooper
      Posted October 17, 2016 at 10:38 am | Permalink

      At present we have the EU’s Common External Tariff but 75% of the duties collected on imports into the UK go to the EU. If we were applying our own tariff regime then 100% of the duties collected would go to the UK government. So consumers would have to pay for tariffs on imported goods, whatever they were, but taxpayers would no longer have to provide that chunk of the government’s revenue.

      • Edward
        Posted October 18, 2016 at 8:53 am | Permalink

        Thanks Denis

        Thanks for clarifying that most of duties collected go to the EU while we are in the EU. But once we have ‘taken back control’ and assuming we rely only on WTO terms are we still obliged to impose duties on UK citizens for imports? John R seems to imply that we have to by saying we would have a (nice) problem on how to spend all the duties collected.

  24. Peter VAN LEEUWEN
    Posted October 17, 2016 at 8:58 am | Permalink

    Reverting to WTO sounds simple. I just wonder how many home-grown defects may show up in the UK’s WTO future. Currently, without any free-trade deal with China and buried by the so-called restricting red-tape, Germany already exports 3.6 x as much to China than the UK manages, in spite its eagerness to trade with China. The UK’s large trade deficit also points to a lack of competitiveness. Recovering from these UK failings (not impossible!) may easily take a decade I would think.

    • Mark Watson
      Posted October 17, 2016 at 10:38 am | Permalink

      I think this just illustrates that the only country benefiting in any way from the EU and Eurozone membership is Germany,and it’s satellite, The Netherlands.
      For the UK,it’s delivered v little, apart from a large trade deficit and lack if competitiveness.

      • Peter VAN LEEUWEN
        Posted October 17, 2016 at 7:05 pm | Permalink

        @Mark Watson: Competitiveness doesn’t come from outside. WHen you lack it, it is home-grown.

    • Know-dice
      Posted October 17, 2016 at 10:45 am | Permalink

      Helped by a “falling Pound”…

    • Roger
      Posted October 17, 2016 at 12:13 pm | Permalink

      How can Germany have separate agreements with China which is surely against EU rules – oh, I forgot, Germany is the EU and can do what they want in trading outside the EU Zone even though rules preclude this… Wonder what France does? About time UK stopped the cricket mentality and grew a pair!

      • David Lister
        Posted October 17, 2016 at 6:00 pm | Permalink

        Please. Read the Europa treaty database. It is a myth that there is no trade agreement with the EU and China.

        There are 80+ bilateral agreements with the EU which describes how we trade. This is why it is baffling that Mr Redwood et-al never refer to them.

      • Peter VAN LEEUWEN
        Posted October 17, 2016 at 9:47 pm | Permalink

        @Roger: Germany has no separate agreements of course, it trades like any EU nation. I just pointed out the current UK lack of competitiveness. That won’t be solved by just having a future free trade agreement.

      • Bloke
        Posted October 18, 2016 at 1:54 am | Permalink

        What separate agreement exists? Germany trades with China, so does the UK.

        • David Lister
          Posted October 18, 2016 at 2:28 pm | Permalink

          @Bloke, (not sure if you are responding to me), but if so the agreements that I refer to are the trade agreements between the EU and China.

          It is under this framework that Germany, and the UK, can trade with China.

          It is the same framework that needs to be replicated when we leave the EU as the treaties will not carry over to the UK. This is because they are legal treaties between the EU and China, and can not be unilaterally carried over.

    • Narrow shoulders
      Posted October 17, 2016 at 12:33 pm | Permalink

      Short term pain for long term gain PvL

      ‘Twas ever thus

      • Peter VAN LEEUWEN
        Posted October 17, 2016 at 9:48 pm | Permalink

        @Narrow shoulders: Time will tell . . . .

    • Anonymous
      Posted October 17, 2016 at 12:47 pm | Permalink

      This is a problem.

      Hanging on to British ideas and getting hard on welfarism are sides to Brexit not considered.

    • Antisthenes
      Posted October 17, 2016 at 1:45 pm | Permalink

      The UK’s lack of competitiveness has always been a bone of contention. However the evidence in favour of it is mostly anecdotal. The UK being the 5th largest economy however would point to that not being strictly true. The balance of payment deficit that it is. There are other proofs productivity and labour costs among them. The truth of it is it is not known as there are too many contradictory indicators.

      What is true is that UK competitiveness is hampered from being a member of the EU. Brexit should address that and domestically at the same time we should finish what Margret Thatcher started and roll back what Labour have imposed since. We rightly have a reputation of being a nation of amateurs but foreigners coming to the UK to own and run businesses is eroding that culture and modern competitive ideas are catching on and being applied successfully. Even political thinking is catching up on the right at least. The left of course is going in quite the opposite retrograde direction but more and more are seeing how ludicrous that is.

    • Ian Wragg
      Posted October 17, 2016 at 2:40 pm | Permalink

      When the Euro collapses Peter we will see if Germany and indeed Holland remain competitive. Germany has benefitted from a weak Euro dragged down by the Southern states and having over a million non employable immigrants arriving annually the fabric may start to rip.

      • Andy
        Posted October 17, 2016 at 4:53 pm | Permalink

        The Euro has destroyed a third of the Greek Economy, thrown 25%+ of the adult population and 50% of youths on the scrap heap of unemployment with no prospect of a job. And all in the name of ‘European Unity’. Enough to make you sick.

      • Peter VAN LEEUWEN
        Posted October 17, 2016 at 9:50 pm | Permalink

        @Ian Wragg: “When” ??? Keep dreaming!

    • Lindsay McDougall
      Posted October 19, 2016 at 8:52 pm | Permalink

      For Peter van Leeuwen:

      Recovering from a ‘chronic’ trade deficit takes nothing more than a freely floating currency (that is the most important thing), an end to monetary incontinence and an end to fiscal incontinence. It is always Governments who want to interfere in markets who mess things up.

  25. agricola
    Posted October 17, 2016 at 9:08 am | Permalink

    I read this morning that the cabinet is considering continuing to pay billions into the EU to ensure access to the single market. If that is the deal then the conservative party have had my last vote. I cannot think of a greater betrayal of the referendum result. T. May should be reminded that Brexit means Brexit. Do you give any credence to this rumour, or is it just that, something put about by elements in the media who are less Brexit than the electorate.

    Reply I give it no credence. Why would the government offer a concession in public when they are not even yet negotiating?

    • Roy Grainger
      Posted October 17, 2016 at 4:59 pm | Permalink

      Of course they have to consider it. Consider and reject.

  26. Horatio
    Posted October 17, 2016 at 9:09 am | Permalink

    Hi John, is there a breakdown anywhere available of how if wto tarrifs were applied in both directions the costs would pan out? Obviously goods like new world wine , new Zealand lamb and Korean white goods would be cheaper due to a lack of external tarrifs but that is an unknown. As a leaver I read that due to the amount imported it is the eu27 who would suffer most under wto rules, this should be ‘a known’ Can you confirm this please?

    Reply Yes, we set out some of the main tariffs in the All Souls Seminar papers published by the CSJ/Legatum

    • David Lister
      Posted October 18, 2016 at 3:03 pm | Permalink

      Hi Horatio,

      New Zealand lamb has a tariff of 0% to the EU when in-quota. It won’t get any cheaper when we leave the EU.

      It would be a mistake to assume that the goods you list will be cheaper, if anything because of the weakening pound they will all become more expensive.

      Most countries already have trade arrangements with the EU. We will of course need to renegotiate these ourselves to ensure trade continues with 0% tariff.

  27. stred
    Posted October 17, 2016 at 9:10 am | Permalink

    There is a report in the Guardian today about comments from a Mr Ruperel, who advises the Brexit minister’s department, that British banks may move their assets abroad if not granted passports, but not to Frankfurt but New York or Singapore. As these are non-EU places, which are able to trade with the EU, presumably he thinks the EU is planning to stop London, but allow Singapore. Is this likely?

    Also, some pearls of wisdom from Mr 5%, Cleggy. He thinks British farmers will be terribly disadvantaged if the EU imposes 45 or 50% tariffs on their Somerset brie and cheddar and French brie and cheddar becomes very expensive. Is this a Libdum forecast?

    • zorro
      Posted October 17, 2016 at 10:14 am | Permalink

      Nonsense from Clegg as usual – assuming that the French farmers will engage in kamikaze economics!


    • Mark Watson
      Posted October 17, 2016 at 10:40 am | Permalink

      It’s ridiculous to think that New York or Singapore would pick up trade from London. What would be the point? Wrong timezone for starters. Scaremongering.

    • Andy
      Posted October 17, 2016 at 3:09 pm | Permalink

      Cleggy does talk a lot of twaddle. 45-50% tariffs will kill off French cheese sales in the UK. I see riots in Paris, just for a change. But if the Continental Europeans want to do this so be it. Just let them understand any tariff will be reciprocated.

      • Jerry
        Posted October 17, 2016 at 3:48 pm | Permalink

        @Andy et al; Utter arrogance, if not ignorance… You assume that the UK is the main market for French, German and other EU27 farmers and their Cheeses etc, I suspect it is not! But if the UK government wants to risk killing of the UK’s own agricultural export industry then WTO rules might well be a good place to start, remember that WTO rules will not just apply to exports to the EU27 but any RotW that the UK doesn’t have our own agreement with (and how many of those will the UK have come Brexit day after 44-46 years in the EEC/EU, not many, if any).

        • Edward2
          Posted October 18, 2016 at 5:58 pm | Permalink

          Wrong again Jerry
          Read the post below from David Lister.
          At least you are in good company with Nick Clegg

          • Jerry
            Posted October 19, 2016 at 6:48 am | Permalink

            @Edward2; Once again you have failed to actually read what I said. 🙁

            Also, as for Mr Lister and his comment regarding Clegg and Roquefort, you have failed to read his comment too, what do you not understand by “Other products may be different.”?! Whilst Nick Clegg might or might not have been misguided to make such a very narrow EU/WTO comparison his wider point is valid.

          • Edward2
            Posted October 19, 2016 at 8:26 am | Permalink

            The article by Clegg claimed tariffs of 40%
            This is wrong
            Averages on cheeses and wine would be around 10%
            More false project fear predictions

          • Jerry
            Posted October 20, 2016 at 6:55 am | Permalink

            @Edward2; I suggest that you read Mr Lister’s correction (below) … and then apologise to me, never mind Mr Clegg.

          • Edward2
            Posted October 20, 2016 at 11:38 am | Permalink

            If you look across the trade in cheeses and wine Clegg claimed tariffs averaged approx 50%

            That is wrong average tariffs are much less.
            Average tariffs are around 10%

          • Edward2
            Posted October 20, 2016 at 11:42 am | Permalink

            And Clegg assumes current trade agreements and their rates will be cancelled in favour of higher rates.
            Is it likely the French and British would negotiate a deal where both sides suffer?
            More Project Fear nonsense

          • Jerry
            Posted October 22, 2016 at 2:55 pm | Permalink

            @Edward2; What ever, the world thanks you for your opinion… I guess there are non so blind Brexiteers as those who choose not to see, after all David Lister (below) has even pointed you in the direction of the actual WTO Tariff figures.

      • David Lister
        Posted October 18, 2016 at 2:55 pm | Permalink

        Hi Andy,

        You can look up the import/export tariffs for any product on the European Commission website.

        I’ve just a quick look at Roquefort. The import/export tariff to Third Countries (ie. those operating under WTO with a Free Trade Agreement) is 70.40 EUR / 100 kg.

        I don’t know where Nick Clegg’s quote comes from, but at 70.4Eur/kg that would be equivalent to a 10% tariff. Other products may be different.

        This is an automatic and inevitable consequence of operating under WTO trade with a Free Trade Agreement.

        • David Lister
          Posted October 18, 2016 at 3:25 pm | Permalink

          I correct myself .. (I took a figure from a negotiated trade agreement)

          The tariffs are indeed higher under WTO and Most Favoured Nation, and more aligned with Nick Clegg’s estimate.

          The tariff schedule for Cheese can be found in Commission Regulation: (EC) No 2204/1999 [p81].

          The duty rate varies from E167 – E261/100kg which is equivalent to about £3.00/kg at the upper end.

          My favourite strong cheddar costs about £5/kg today, so in this particular case the tariff is a whopping 60%.

          It could be argued that this is even more pressure to make sure an FTA is achieved, but this will take time …. and these tariffs are what we will face under WTO agreements.

          What this points to is the importance of a soft-exit and/or interim agreements whilst a Free Trade Agreement is negotiated (which will take >> 2 years).

        • David Lister
          Posted October 19, 2016 at 5:41 pm | Permalink

          Dear John,

          I provided an update to this referring to Cheddar which you have not approved.

          For Cheddar the tariff is indeed in excess of 40%. Can you please include my correction?

  28. Shorttalk
    Posted October 17, 2016 at 9:23 am | Permalink

    Canada is having problems with its trade deal with the EU

    It is the kind of thing one might expect with every nation-state in the EU and in this case a region of a EU-nation state dropping a spanner in the works, objecting to this bit or other.
    Of course if one reads the nitty-gritty of the deals the EU has already made they have tumultuous on-going disputes procedures state-to-state of their implementation with violations and delays common. It is like a corner shop having a deal with a bakery only to have some deliveries not made, others doubled or tripled without any notification in amount or without external packaging or sending flour instead of the baked bread on a whim. Chaos. A trade agreement to disagree.
    Naturally enough if a nation-state has a dispute then they have to give it to the EU to sort out. On this note it can be added the CETA agreement negotiations ended in August 2014 yet two years later they are still in dispute and not just by a Belgian region. A country could go into a famine awaiting the deliberations of EU food deals.

    • David Lister
      Posted October 18, 2016 at 2:31 pm | Permalink

      This is exactly why it is near impossible for the UK to achieve an even more ambitious free trade deal in 2 years time, and why the fall-back of WTO has to be properly considered – and it hasn’t been yet.

  29. stred
    Posted October 17, 2016 at 9:27 am | Permalink

    Off topic but worth reading for Remainers who are Greens is the good news in the Guardian that in 10 years we will have to put electric car charging points in our house extensions and every where else. Petrol and diesel cars will be banned too.This is in order tomop up all the green electricity being produced by wind, solar and burning American trees, in order to then feed the excess back to the grid to keep our homes and factories going when the wind stops or at night and when cloudy, but presumably not our cars.

    They think it will be necessary to build more power station to cope with everyone driving around in Renault/Nissan Leafs and some maybe coal stations but fitted with SO2 scrubbers( not human) and perhaps there may be a few nuclear stations a few years later too, hopefully after closing most French and German ones.

    Yes.This is the brave new EU future which we will miss if we don’t take notice of Newmaniacs and reverse this referendum in which racist knuckle-dragging imberciles clearly did not understand the benefits of being ruled by Messrs Junker and Verhofstadt.

    • stred
      Posted October 17, 2016 at 9:42 am | Permalink

      Correction. New petrol engines, which produce more Co2 but less No2 will still be allowed and old car batteries will be used for power stations when electric car owners have spent several thousand pounds buying a new one.

      • stred
        Posted October 17, 2016 at 10:58 am | Permalink

        Heathrow supports the Guardian sustainable business pages. The CEO is planning to have cycle lanes from London centre and Slough in order to enable very fit people to take their cases and themselves there and offset the extra aircraft CO2 and NoX. They will also have more electric pods and a vole discouragement programme to discourage hawks from flying into engines. Together with a compulsory ban on normal cars and a woodchip power plant plus more solar panels. Heathrow will be green as a meadow.

        Why not just demolish the ghastly areas around Heathrow and turn it into a forest.The whinging inhabitants could be relocated into aircraft- free towns such as Northampton.

  30. Denis Cooper
    Posted October 17, 2016 at 9:44 am | Permalink

    Having read through the transcript of Thursday’s court proceedings it seems to me that the case is fundamentally flawed because it relies on the oft-repeated, and as yet unchallenged, premise that the rights presently enjoyed by Gina Miller and others as EU citizens have been granted to them by our Parliament through its Acts to approve the successive EU treaties.

    But there is a glaring inconsistency when her counsel points out that if we left the EU and she lost those EU rights then some of them could not be reinstated by Parliament as purely domestic rights. For example, our Parliament could not unilaterally legislate for her to have the right to live in Spain, that would be a matter for the Spanish authorities.

    Logically that might suggest that her rights as an EU citizen have not derived from our Parliament in the first place; if they had then there would be no obstacle to Parliament abolishing them and restoring them and abolishing them again and restoring them again as many times as it liked.

    As I have pointed out previously we are not in the EU by virtue of any Acts passed by Parliament, but by virtue of the instruments of ratification of the EU treaties that the government has deposited with the Italian government, and like the preceding steps of negotiation and signature of each of those treaties the final ratifications of them were done by the government under Royal Prerogative, that “wonderfully British constitutional nicety”. The role of Parliament has been no more than to adapt our domestic law to the requirements of the EU treaties as negotiated and signed by the government, so that the government could then ratify them, and so the real source of the EU rights presently enjoyed by Gina Miller is the government acting in agreement with the other EU member state governments.

  31. Colin Hart
    Posted October 17, 2016 at 9:49 am | Permalink

    Why worry? There are strong signs that the EU itself is in the process of disintegration. Schengen is fast becoming a distant dream rather than a reality. The Euro could well collapse – not just in terms of its value against other currencies – but as a currency itself. According to one its architects, Professor Otmar Issing ‘one day the house of cards will collapse’.

    Perhaps we don’t even need to invoke Article 50. Just wait a couple of years and there’ll either be no one to talk to or a dysfunctional, chaotic organisation so preoccupied with its own problems that it won’t even notice us slipping our moorings.

  32. Antisthenes
    Posted October 17, 2016 at 9:59 am | Permalink

    Free trade deals as you point out are more about protectionism than free trade. Free trade if truly free does not need a deal it just needs to be allowed to take place. It has to be policed and there have to be rules to ensure honesty and contract law is abided by. Those rules should not extend to who by and how goods and services are provided. That is adequately determined by competition which free trade should encourage.

    The EU single market does not live up to being a free trade area. Although it allows competition it only does so if it does not impinge on political and vested interest aspirations. EU rules and regulations limits choice and imposes restrictive practices by imposing draconian conditions and heavy costs that force those suppliers who can bear them to supply goods and services at higher prices than would otherwise be the case.

    The UK outside of the single market would be free of EU protectionist practices except for goods and services that the UK supplies to them and domestic ones(which most should be ditched along with the EU). However only to the standards that the EU set not to all the other burdensome rules and regulations. The UK will be free to trade and interact with the rest of the world free from EU interference. The UK will sink or swim based on it’s own abilities which it has in abundance. The chances are that it will do the latter. Remaining in the EU and/or the single market the former will be more likely as Brussels has proved that the policies and practices that it imposes leads to continual crises; economic, social and political. Not a free trade area that increases prosperity and security but one that does quite the opposite.

  33. alan jutson
    Posted October 17, 2016 at 10:19 am | Permalink

    I rather like your simple solutions John, although I have to say if we do impose tariffs, then surely its the taxpayer that will pay for them with higher prices.

    Although given the new tariffs will go direct to Government, the taxpayer should be taxed less overall surely to compensate.

    Aware that the EU (which includes the UK) imposes some tariffs now on non EU Country imported goods.
    Thus non EU Country imports should be cheaper when we leave the EU.

    What is the difference between EU tariffs now, and WTO tariffs, and how will that play out with the current range and volume of trade we do, has anyone done the calculation ?

  34. darren
    Posted October 17, 2016 at 10:59 am | Permalink

    if we end up with paying bilions into the eu,,it is a utter betrayal of the vote,we voted to LEAVE the eu,,not to negoiate our way back into it through the backdoor,,as theresa may has been sayin for the last few months,,is this her idea of brexit means brexit?,,as regards the single mkt,,there are endless statements from people such as osbourne,cameron,prit patel,and others stateing before the referendum that if we voted leave we leave the single mkt,which is the beating heart of the eu,,big business and corporations the originators of the project fear doctrine who lost the public vote to there ideas,,,now seem to have come out of the woodwork and have been given preferential access to the decision making on brexit…hammond blocking the ideas of amber rudd on immigration is another indicator of ulterior motives,,in the anti brexit camp too, this looks very bad for democracy and the people are starting to really realise it now,,sociial media is full of the outcry to what is going on in the last few weeks..and unless that vote is honoured if feel real big problems ahead

    • Anonymous
      Posted October 17, 2016 at 9:45 pm | Permalink

      The images in the Mail today (maybe selective) are not good government PR.

      As many of us predicted – the so called ‘children’ look to be strapping, stubbled blokes, quite a bit older than the under 10s we were told were in need of our help.

      It does not inspire confidence in Mrs May and accords with her record on migration.

  35. Iain Gill
    Posted October 17, 2016 at 11:03 am | Permalink

    I hope we don’t accept the demands from places like India to issue large numbers of work and other entry visas to their nationals in exchange for a trade deal. That’s their usual negotiating tactic demand lots of their workers can flood in on favourable terms (indeed taxed here less than British workers).

    • Excalibur
      Posted October 17, 2016 at 10:43 pm | Permalink

      I see Ian Gill’s contribution has been published on a theme broadly similar to my own. What was wrong with mine JR ?

    • Sam Stoner
      Posted October 18, 2016 at 5:08 am | Permalink

      Excellent point. We should only do a trade deal with countries that want nothing from us in return

  36. Denis Cooper
    Posted October 17, 2016 at 11:13 am | Permalink

    I agree with what you say, JR, it is seems that we are losing the propaganda war.

    If we do end up staying in the EEA then probably that will only be allowed by the EU and its member state governments on condition that we provide some kind of legal guarantee that we will not attempt to abuse the safeguard provisions in the EEA Agreement by unilaterally limiting immigration from the other EEA states, and that we fully accept the legally binding nature of the judgements of the EU’s court as shadowed by the EFTA court, and that we pay a substantial annual fee for the privilege of running a massive trade deficit with them.

    A few years of that unsatisfactory arrangement and rather than moving on from the EEA it’s just as likely that the pressure to rejoin the EU would start to build.

    An advocate of the EFTA/EEA arrangement writes today:

    “In my opinion, the process of leaving the EU should end there.”

    and that could turn out to be the case.

    The question is, which of the arguments for staying in the EEA would no longer apply with the same force five or ten years later? Probably some would drop away, but others would still be there to keep us in that “halfway house” indefinitely.

    • Denis Cooper
      Posted October 17, 2016 at 11:15 am | Permalink

      “… but it seems that we are losing the propaganda war.”

  37. graham1946
    Posted October 17, 2016 at 12:14 pm | Permalink

    The only argument I have with your piece is the last paragraph where you suggest politicians would spend any tariff money wisely. They don’t normally pass on any saving to the public, taxes just go up and up whoever is in power. We would probably get more lunacy like HS2 or Hinkley.

    Similarly, (assuming Mrs May doesn’t actually keep giving our money away to the EU, which is by no means certain as she hasn’t denied it or made it a red line) I have great doubts about the Brexit bus claim that it could go to the NHS. They keep closing beds and ruining morale and losing staff and we already have a ‘winter problem’ at the end of summer. Our local doctors have closed their lists and routine appointments are currently running between 4 and 6 weeks, with urgent ones about one week and recently our 2 general hospitals issued an appeal not to attend A&E and actually closed one for 2 days for lack of staff. They say they are getting 50 nurses from the Phillipines ‘soon’. What a way to run an NHS. We need this money urgently, yet they keep faffing around fiddling while Rome burns saying they might put in Article 50 notice in 5 months time (another 5 billion down the drain).

    I know they say they give more money each year, which they do, but it obviously does not keep up with the population or demand or with new treatments being found. The 8 billion promise is now out of date. Even that was only to plug the gap in its finances, not for anything new. We’ve probably got another million people in the country since that was worked out and is supposed to last until 2020, by which time another million will have come.

  38. Ian Wragg
    Posted October 17, 2016 at 1:34 pm | Permalink

    17 million voters want Brexit but it appears that a small cabal of Remainiacs want to sabotage it.
    Since when has Millipede and Clog together with Gideons mate Hammond held so much sway in UK politics.
    If May really is thinking of payment to stay in the single market then the Tory party had better start job hunting.
    We are getting very bored with the constant sniping of these idiots. I see Issing who was one of the architects of the Euro says that it’s doomed to fail.

    • Ed Mahony
      Posted October 18, 2016 at 12:04 am | Permalink

      Instead of all this talk, let’s just see how the markets / traders / investors react to Brexit when Article 50 is signed when things begin (only begin) to get serious. Whether the economy tumbles or goes into decline over many years (and whether Brexit is seen to destabilise the economy, peace and security of the EU overall (as well as destabilise the world economy). Or not. If Brexiteers are right, then they have nothing to worry about. But if they’re wrong, then the UK may have to return to the EU, except this time, having to join the EU.
      Again, it’s really out of our hands now what happens (initially it’s in the hands of Mrs May and her advisers, and then it’s in the hands of the markets / traders / investors – seeing how they react to Brexit (post Article 50 when the moment of truth kicks in and things begin to get serious).

  39. Denis Cooper
    Posted October 17, 2016 at 2:05 pm | Permalink

    Here’s another success for the propaganda campaign to keep us in the EU:

    “A new poll, commissioned by the Open Britain campaign, shows that nearly three-quarters of the public thinks the government should seek parliamentary approval for their Brexit plans before Article 50 is triggered and the negotiations start.”

    Note that, “before Article 50 is triggered”.

    In fact the question asked in the poll was not quite that, it was this:

    “should the Government set out what it is aiming to achieve in negotiations with the EU ahead of the start of formal negotiations so that they can get Parliament and the public’s approval for their plan?”

    Note that, “ahead of the start of formal negotiations”; if I had been asked that particular question then I might well have answered “yes”, because it is not the same as “before Article 50 is triggered”, which I would like to see happen as soon as possible and without parliamentarians like those quoted – Miliband, Clegg, Herbert – being able to stop it as they hope to do.

    If Cast-iron Cameron had kept his promise and served the Article 50 notice immediately after the vote to leave the EU it would still have been some time before “the start of formal negotiations”, simply because neither side had expected the result and so neither had made any preparations for negotiations; and that would still be the case if Article 50 was triggered today, neither side is ready.

    • ChrisS
      Posted October 17, 2016 at 5:18 pm | Permalink

      Absolutely right, Denis.

      It would have been far better to have triggered Article 50 immediately. After all, that is what Cameron said he would do during the campaign.

    • Mark Watson
      Posted October 17, 2016 at 6:31 pm | Permalink

      Denis,a. proper YOUGOV poll conducted in 13/14 th October shows that 54% think the PM alone should trigger article 50 while 30% think parliament should decide.

      • Denis Cooper
        Posted October 18, 2016 at 6:54 am | Permalink


  40. David Edwards
    Posted October 17, 2016 at 3:03 pm | Permalink

    One aspect of trade tariffs that is rarely discussed is the effect on consumers, on individual or company purchasers of products or services. Discussion almost always seems to concentrate on the effect on providers of products or services. From my limited understanding, import tariffs help certain selected industries, but at the expense of consumers. If for example, outside of the EU, we placed an import tax on cars then it may initially benefit domestic automobile producers, but the cost of cars for consumers would increase because imported cars would cost more to purchase and reduced competition would over time not encourage efficiency by domestic producers.

    From a consumer benefit perspective it may be the case that zero import tariffs should be put in place regardless of whether or not import taxes are imposed on us by other countries or regions. This would, on the face of it, be the right of centre approach. I would be sceptical in any case that collection of import tariffs for spending by our government would either balance out the losses incurred by consumers, even if spending were to be targeted effectively, or that collection of these taxes would not just be absorbed into the common pool for spending more generally.

  41. Anonymous
    Posted October 17, 2016 at 4:29 pm | Permalink

    Off topic: The 300 ‘child’ Calais migrant photos look utterly dreadful. Many of them are blokes of shaving age, some could be 25 – not the 7-year-old mites were were told needed our help.

    This is not going to look well on Mrs May.

    It is yet another abuse of the public good will.

  42. Patrick Hurd
    Posted October 17, 2016 at 5:03 pm | Permalink

    The one flaw I see in this simplistic binary decision, as correct and logical as it sounds, is the proliferation of entrenched Governmental consultants (Lawyers and so called subject matter experts) waiting in the wings seeking to make substantial revenues advising the Government on how best to break away from the EU!

    It will be in their interests to persuade the Government officials (not the brightest on the block when it comes to subject matter expertise) to believe this is a very complex legal area that requires significant knowledge and understanding to fulfill the best outcome. No doubt this will take several years of negotiation on £1000 per hour.

    Remainadopes however will be jumping on this particular silver-lining bandwagon no doubt!

  43. Bert Young
    Posted October 17, 2016 at 5:10 pm | Permalink

    Get the message of today’s blog to Hammond . If the reports have any grain of truth in them , he and the Treasury are making a tricky situation far worse . The markets need stimulus and opportunity prior to Brexit and the Chancellor can play a positive role in the build up . A firm and controlling hand needs to get the entire Cabinet pulling as one ; at the moment I don’t think this is happening . Hammond must toe the line .

  44. Gwammar bombs
    Posted October 17, 2016 at 6:19 pm | Permalink

    In Mosul, although no civilian casualties have been announced after using “huge bombs” according to Sky News, it has been noted the Jihadists use civilians as “human shields”. well, that will explain any civilian casualties apart from “we are only human” and “we make mistakes” says former Vice Chief of Staff General John Kearne. It seems “up to one million people will flee from the Iraqi city.” Such cleverclogs bombs”. It is a good bet to assume those aspirational bombs would make it to grammar school if only they could truly think.

  45. James Munroe
    Posted October 17, 2016 at 6:42 pm | Permalink

    Nick Clegg was always dubbed ‘Cameron-Lite’.

    Now Mr Clegg wants ‘EU-Lite’.

    He must be obsessed with Lite versions of everything.

    But the UK voted for the ‘full strength Brexit’…so just get on with it, Mrs May!

  46. David Lister
    Posted October 17, 2016 at 6:54 pm | Permalink

    Dear John,

    Can I please ask you to comment on the Europa Treaty Database. Some people have commented on Australia as being an example of proof that trade under WTO is possible. However I have just checked and there are 83 EU-Australia Treaties covering a wide variety of international aggreements to facilitate trade and cooperation. These date right back to 1945 with the Constitution of the Food and Agriculture Organisation of the United Nations (FAO).

    In comparison there are 4 EU treaties that appear in the Treaty database that cover the UK which include provisions to avoid double taxation, relations between Norway&Iceland, and non-nuclear proliferation.

    The point is for the UK to leave the EU Single Market it would need to create treaties that Australia, China, the US, and all other major trading blocs have with the EU.

    It is simply incorrect to assume that trade is conducted soley under WTO rules which is a myth that continues as a theme in your blog. The 83 treaties are proof of this if needed.

    There are many problems on WTO only trade which have not been addressed: Product conformance, BPI’s, veterinary inspection of animals, mutual recognition agreements … etc. All these need bilateral trading arrangements and are not covered by WTO. As it stands today, if we left the EU our manufactured products, food, and livestock could not legally be imported into the EU which is why the WTO fall back is not an option.

    Not only would the UK be unable to trade with the EU, it would also be unable to use the existing treaties to continue to conduct trade with, for example, Australia.

    • Denis Cooper
      Posted October 18, 2016 at 7:56 am | Permalink

      Unless there were objections the existing treaties would continue for the UK as if it were still in the EU. It only needs an exchange of diplomatic letters. When Croatia joined the EU, did that instantly invalidate all of the treaties to which the EU and its existing member states were parties? Did Australia say “We made this agreement with the EU and 27 member states not including Croatia, but now Croatia has joined the EU so that agreement is invalidated and we will have to renegotiate a new agreement completely from scratch, in the meantime all trade must cease”? No, Australia had more sense that to say that. It could have raised an objection if there was a really significant change in circumstances, it could have said all trade must cease, or it could have said that it was prepared to carry on a before for the present but would really like to see this problem ironed out in due course. Incidentally, you may not know that at present Croatia is only in the EEA through the provisional application of its treaty to participate, which has not yet been ratified by all parties and so technically has not come into legal force. Is anybody bothered by that? No, they are not.

      • David Lister
        Posted October 20, 2016 at 1:12 pm | Permalink


        Thank you for your response and you make a fair point.

        But what if Australia have conceded on their EU trade agreement (e.g. Nickel) in order to get access to a European product (e.g. French perfume). As the UK can’t offer French perfume would Australia not want to renegotiate its trade deal with the UK to get the best terms for its exporters?

        My other point is that the Treaty database points to a large number of treaties that Third Countries have made with the EU. Which of these would the UK have to make with the EU in order to maintain trade. If we fail to reach agreement in 2 years where does that leave the UK relative to other third countries that already have these treaties?

        Source for French trade:

  47. John O'Leary
    Posted October 17, 2016 at 7:07 pm | Permalink

    We can only negotiate free trade deals with the USA, China, Brazil, India, Canada, New Zealand, Singapore, Australia and the others if we leave the EU and its internal market.

    That is patently untrue as the non-EU members of the Single Market (EEA) are free to strike free trade deals with whomever they wish. I think you are deliberatly or otherwise onfusing the EU’s customs Union with the Single Market.

    Why do you want the UK to risk trashing its economy by an overnight Brexit? Once out of political union and the rest of the EU federal nonsense we can, on completion of Articele 50 negotiations, take our time to negotiate something better.

    • Sari
      Posted October 19, 2016 at 7:21 pm | Permalink

      Mr redwood goes quiet …

  48. Margaret
    Posted October 17, 2016 at 8:18 pm | Permalink

    Others do not get the bit between their teeth as you do John. You are consistent, focused and to the point , if sometimes the point is told in a somewhat reverse manner. That is you and not the Conservative party. Who else could produce a blog day in day out without a day off( and sometimes even more than one in a day.) This persistence should pay off as those who like bad omens for future happiness throw their various spanners into the system. of course dramatic argument keeps the news teams going. I personally cannot stand the drama. We are not losing any propaganda war , we are being blocked by, I suspect ,protectionists.

  49. Rosy Lee
    Posted October 17, 2016 at 9:27 pm | Permalink

    Off Topic:

    Oddly in the EU, with Bulgaria being a major producer historically of roses, many dried rose petals used for a variety of purposes originate from Pakistan. At this moment Pakistan is in not in the EU nor has associate membership and is not even in the Eurovision Song Contest which, seems vital for EU candidate membership.

    There is a vital necessity for roses right now and it is to be hoped Bulgaria has some late flowering varieties. They are needed for Mosul in Iraq. Obviously the one million refugees who are predicted to flee Kurd liberation are running away from the celebration because they are ashamed at not having so much as daisy chain to throw at them.

    In this connection when the allies liberated France and Holland in World War Two there was Pathe News showing streets upon streets of cheering crowds all throwing roses in buckets full on our glorious army and the US army. It is a wonder where they got the roses in such bulk and out of season too. But war brings innovation and adaptation and is a measure of the human spirit to do the seemingly impossible when push comes to shove.

  50. rk
    Posted October 18, 2016 at 5:40 am | Permalink

    Are you sure going to existing WTO rules is as simple as that?

    I’ve read that the current arrangements with WTO are somehow entangled in our membership of the EU? And that they might have to be renegotiated and agreed by all WTO member countries?

    Do you agree with the Economist that countries like India, USA, Australia will want to see what the final trading relationship with the EU is before they sign free trade agreements with the UK?

    • Denis Cooper
      Posted October 18, 2016 at 7:59 am | Permalink

      Or agree to continue any existing deals with the EU.

  51. Wireworm
    Posted October 18, 2016 at 6:54 am | Permalink

    We can negotiate till we’re blue in the face, but there will inevitably be at least one EU member disposed to drag it out until the two-year deadline, in the belief that this will frustrate agreement. So we are really talking about what happens at that point. Extension of the deadline wouldn’t seem desirable because of the uncertainty it would create. Therefore we are looking at WTO terms for goods: let’s just bite that bullet. Services are a different matter, but the importance of the City to the EU for clearing etc should be enough to secure passporting.

  52. Ronald Olden
    Posted October 18, 2016 at 10:53 am | Permalink

    This Article shows how unfit Remainiacs like Nick Clegg are to be commenting or advising us on anything.

    His ‘statement ‘
    ‘under WTO rules these tariffs would also have to be applied to all imports into the UK until a trade deal with the EU was struck

    is (untrue? ed)
    WTO tariffs are the MAXIMUM that can be imposed by law. There no obligation on any country to impose them at all. Why would would we in the UK want impose any tariffs on ‘Chocolate’, ‘Cheese’, Wine’, ‘Beef’, etc etc after we’ve left? In any case we already Tax. ‘Wine’, and ‘Chocolate’ through ‘Excise Duty’, and ‘VAT’ respectively and we tax some ‘Cheese’ and ‘Beef’ products depending on whether they fall into the VAT Net.

    The Government of which Clegg was member put up the VAT Rate from 17.5% to 20% and introduced the ‘Pasty Tax’ which increased the price of both my ‘Corned Beef’ and ‘Cheese and Onion Pasties’ which I buy from my Co-op Hot Cabinet. If Clegg and the Lib Dems had their way there’d already be a Sugar Tax on chocolate and confectionery. That might be a good idea but it’s nothing to do with being in or out of the EU.

    The entire history of the EU is that it forces us to tax things we don’t want to tax. An example is women’s sanitary products, and Non EU imported food. It’s the EU, not the UK which imposes these tariffs on non EU imported food. When we’ve left we can abolish these Tariffs altogether. So there’ll be no rise in the price of food imported from the EU and prices from the rest of the World will fall. The current rise in imported food prices is owing to the fall in the value of the £. It’s nothing to do with WTO Rules. And as Tesco has shown Unilever, it’s not going to be as easy as these food manufacturers think.

    Clegg then goes on to complain that all this will make it difficult for ‘us’ to ‘export chocolate’. Leaving aside my having been unaware that Clegg owns a chocolate factory, (we Free Traders don’t think in terms of ‘Us’ and ‘Them’, he would if he didn’t know that the fall in the value of £ since June 23rd is making it far easier for manufacturers in the UK to export their chocolate and make a big profit on it. But even if they exported not a single bar, that would have no impact whatsoever on the price of chocolate products in the UK.

    Why would there be ‘customs checks’ on imported food, (or anything else? The only customs checks on food we have at the moment are there because the EU Single Market and protectionist food price regime requires them. Without the EU Tariff Regime they could go as well.

    If the EU wants to impose customs checks on UK Exports that’s up to it. But why would they?Clegg’s suggestion that they might do so to make sure that cars manufactured by German (for example) Companies in the UK complied with every EU Regulation is nonsensical. The EU Regulations already exist and they are not checking them now? In fact of we had been checking them coming in we might have known earlier that German Car manufacturers were lying about their emissions figures.

    This scare story about cars was put about during the EU Referendum Campaign and we made our decision. In fact the locations of the highest concentrations of these Car Factories (Sunderland) was the first to deliver it’s landslide Vote Leave and the locations of ‘our’ chocolate factories (the West Midlands and York) voted in amongst the highest numbers to ‘Leave’. UK farmers on the other hand werenet keen on leaving at all. That’s because they fear lower food prices, not higher ones.

    The Remainiacs are desperate, and they are compulsive liars.

    • David Lister
      Posted October 20, 2016 at 1:21 pm | Permalink

      Hi Ronald,

      I think Nick Clegg is referring to what would happen if we were operating under WTO rules only and there was no trade agreement with the EU. In this case, the EU would have to enforce the tariffs on the UK that are aligned with Most Favoured Nation (MFN) and it would be unable to change those tariffs without it having implications on other third countries to which it trades. The only way round this would be to have a negotiated trade agreement.

      The tariffs are complex, and defined for each and every item. I made a stab at checking the tariff for Cheddar Cheese, and it looks like it could be up to 60%. This was taken from the source below, please feel free to correct me if you think my interpretation is incorrect (I also posted above).

      Source: Commission Regulation: (EC) No 2204/1999 [p81].

  53. Martin
    Posted October 18, 2016 at 5:05 pm | Permalink

    What credibility to do anything quickly has a country that has such cumbersome red tape that it cannot build a couple of miles of runway?

    Even if Mrs May finally says yes – and parliament has a vote – every council has the right to waste council tax payers’ money on court cases and endless appeals for years.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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