What do free trade agreements add?

There are so many misconceptions in current debate about the nature and value of a Free Trade Agreement.

The first is, you do not need a Free Trade Agreement in order to trade with other countries. The UK in the EU has no free trade agreement with either the USA or China, the two largest economies in the world, yet we have a large trade with both of them.

The second is trading as we do under World Trade rules there is no WTO requirement to impose tariffs on imports.  We do so because the EU tells us to impose tariffs on food and cars, not because the WTO makes us. Once we leave we can decide whether to remove those tariffs or not. There is no requirement to impose tariffs on say drugs, and the UK government has made clear it would not do so.

The main reason we can have a successful trade with the USA and China and can have one with the EU after we leave is the existence of WTO rules. A country cannot impose higher tariffs against us than they impose on everyone else. Free Trade Agreements are allowed under WTO rules for countries wishing to go further than the relatively low advanced country tariffs reached under WTO rules so far. The facilitation of trade Agreement ensures smooth borders for the transit of goods between WTO members. All EU countries are members.

Free Trade Agreements can add a bit to trade by removing the remaining tariffs and a few other barriers that still exist under WTO rules. They are nice to have but not essential. It would not be worthwhile making big sacrifices to get one. They are gently mutually beneficial and for that reason countries do not pay to get them.

It is odd that Remain campaigners both claim a free trade agreement with the EU is essential to our continuing trade with them, but try to prevent any free trade agreement with the USA. It’s a typically contradictory position to adopt.

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105 Comments

  1. Pominoz
    Posted November 7, 2019 at 5:09 am | Permalink

    Sir John,

    “Free Trade Agreements …. are gently mutually beneficial and for that reason countries do not pay to get them.”

    Except that the EU are wanting a vast payment for one and Boris is agreeing to pay up front, without any guarantee the EU will agree one.

    • Shirley
      Posted November 7, 2019 at 7:35 am | Permalink

      How many countries will bother spending time agreeing a FTA with the UK when our supposed date of departure keeps getting changed with regularity and pushed further and further away, with no guarantee it will ever be allowed to happen?

    • Martin in Cardiff
      Posted November 7, 2019 at 7:46 am | Permalink

      The WTO is in a pretty shaky state I read, and the US is considering withdrawal.

      What then?

      • Denis Cooper
        Posted November 7, 2019 at 10:24 am | Permalink

        The WTO chief is not panicking, so why should you?

        https://uk.reuters.com/article/uk-usa-trade-wto/wto-chief-says-no-panic-over-trump-withdrawal-threat-idUKKCN1LG27O

        Believe it or not, countries traded with each other before the WTO came into being, and would continue to trade with each other even if it ceased to exist. And, believe it or not, the same is true about the EU.

      • libertarian
        Posted November 7, 2019 at 12:52 pm | Permalink

        Marty

        Well try applying some critical thinking. What do you think would happen with international trade if WTO didn’t exist? Go one try thinking for yourself for a change

        Work out just how you might buy your next iPhone or Samsung if there wasn’t a WTO

    • acorn
      Posted November 7, 2019 at 8:32 am | Permalink

      Paying for a FTA is illegal under WTO rules. The divorce payment has been deliberately kept separate within the WA. BTW, the UK is paying off some of the £39 bn every month it remains a member.

      • Hope
        Posted November 7, 2019 at 12:31 pm | Permalink

        No it is not. JR said th same here. Martin Howe QC and many others state it will be much higher. There is no fixed amount or fixed time limit. It will run much higher than this. Also EIB liabilities of 500 billion Euros and giving up cash assets of billions in the EIB. The figiure of £39 billion was dreampt of up by Hammond to appease people as many started to worry at £100 billion!

        You might recall Johnson said the EU should go whistle. It looks like he has come to heel. It is truly dreadful and no one should vote for it.

      • forthurst
        Posted November 7, 2019 at 2:21 pm | Permalink

        What’s Norway paying for?

    • Ian terry
      Posted November 7, 2019 at 8:43 am | Permalink

      Pominoz

      This phenomenon of giving away excesses of our money for no apparent reason seems to have gain even more supporters especially from within Westminster at an alarming rate with no logic applied to the whole process. It is rife across everything that politicians, parliament, civil and public services touch and it is getting worse because IMHO that the majority of people making these major decisions have no life or real business experience. It is very much now become the case of new and old bulls and the new generation speaking the words they think we want to hear.

      All the political parties have seriously got to reconsider their selection processes and as with the private sector fault or failure results in immediate dismissal.

      The state of our parliament over the last decade is testament to its not fit for the 21st century, and the expectations of the people. All real credibility has vanished.

    • Neil Warner
      Posted November 7, 2019 at 4:07 pm | Permalink

      We’re not paying £39 billion for a free trade agreement as the terms of that haven’t been decided yet. We are paying, apparently, to withdraw from the EU, paying for all we’ve committed to in previous EU budget decisions – that and the exorbitant gold plated pensions of previous British EU commissioners and flunkeys.

  2. Mr Literal
    Posted November 7, 2019 at 5:16 am | Permalink

    I’ve never met a free trade agreement. I’ve no idea what they add.

  3. Peter Wood
    Posted November 7, 2019 at 5:26 am | Permalink

    Good Morning,

    Sir John, you make this FTA point, and similar, in your blog and elsewhere on a number of occasions, BUT, there is very little, that I have seen or heard in a similar vein, from the Conservative Party, why is that? Supposedly Mr. Gove is heading a department that is preparing the country for WTO exit; surely we should be being bombarded with information as to what is needed and how well prepared we are….or not?

    By way of confirmation of the lies being told us by our political leaders, perhaps you can confirm or otherwise the following taken from today’s Express:

    ‘Brussels effectively poured cold water on Mr Johnson’s assertion, and insisted that it never reopened the withdrawal agreement for him.
    A spokesperson for the European Commission raised eyebrows on Wednesday insisting that the EU had only clarified Theresa May’s Brexit deal, and had not in fact made any alterations.
    The claim is at odds with Downing Street’s: that the deal Mr Johnson hopes to get through Parliament is not the same as his predecessors.

    • Simeon
      Posted November 7, 2019 at 7:30 am | Permalink

      One reason the EU did not want the WA agreement opened was because it struck a balance between the individual interests of all 28 EU states. To change one part would upset the balance, thus necessitating other parts to be changed to try and restore the balance. As you can imagine, this would be complicated and entail further wrangling between EU states and therefore further opportunity for disagreement. The unity of the ’27’ was a very important principle for the EU.

      As I understand it, only the N. Ireland protocol was tweaked, and done so in an uncontroversial way that had no meaningful effect on any of the 27. It also didn’t alter the balance between the UK and the EU within the agreement. It’s almost as if there was just enough flexibility baked in to the WA from the outset to allow for this alteration further down the line…!

      The biggest changes are to the Political Declaration (which of course isn’t legally binding). Legal opinion differs as to what extent the disconnect that now exists between the WA and PD impacts trade negotiations. My understanding is that the possibility to eventually (after who knows how long; there is no limit on how many times the UK and EU might agree to prolong the transition period) achieve a clean break from the EU is there. I just doubt the enthusiasm to achieve this by the Tories, not withstanding the wishes of our kind host and a few others in the party.

      Anyway, I would suggest that neither the UK nor the EU are being entirely honest. Who would have believed it? 😉

      • Brexit now!
        Posted November 8, 2019 at 4:56 am | Permalink

        This is correct. So MPs who voted (three times) against Mrs May’s deal could have no coherent reason to vote in favour of Boris’s. Yet they all did! Brexit is not safe with the Conservatives, only Nigel can be trusted

    • Ian terry
      Posted November 7, 2019 at 8:16 am | Permalink

      Peter Wood

      Supposedly Mr. Gove is heading a department that is preparing the country for WTO exit;

      Therein lies your problem.

    • acorn
      Posted November 7, 2019 at 8:20 am | Permalink

      Peter, apparently 46 of the 585 pages of May’s WA have been “changed”.

    • BJC
      Posted November 7, 2019 at 8:29 am | Permalink

      It’s my understanding that the WA hasn’t changed and would be a legally binding EU treaty. Changing a few paragraphs in the political declaration is non-binding and irrelevant when measured against contents of the treaty. The ECJ would still be the final arbiter in any dispute and as the self-appointed guardians of the EU treaties, the existing treaties would provide them with the basis for their rulings, i.e. the newly rebranded May EU treaty ties us to the old EU treaties.

      • Chris
        Posted November 7, 2019 at 9:33 am | Permalink

        Rees-Mogg told John Baron in answer of question in H of C that the Boris deal was 95% May’s deal. From the horse’s mouth, so to speak.

        From a commenter on Conservative Woman website:

        Hansard-Business of the House 24th October 2019 volume 666
        Mr John Baron (Basildon and Billericay) Con.

        “Can the Leader of the House confirm that 95% of the Prime Ministers deal essentially remains unchanged from the deal that preceded it,and we had three and a half years to scrutinise that, so this should not take too long?.”

        Mr Rees Mogg
        “My Hon, Friend is correct, but the Prime Minister got rid of the undemocratic backstop, which made the deal acceptable.”.

    • Denis Cooper
      Posted November 7, 2019 at 11:07 am | Permalink

      I don’t know for sure, but there may confusion here between the body of the treaty, the Withdrawal Agreement, and the attached Irish protocol. If it was true that in the end there were no changes at all to either texts, what happened to the proposed changes made public on October 17th?

      https://ec.europa.eu/commission/sites/beta-political/files/revised_withdrawal_agreement_including_protocol_on_ireland_and_nothern_ireland.pdf

      “Subject: Revised texts agreed at negotiators’ level for:

      – The Protocol on Ireland/Northern Ireland included in the Withdrawal Agreement and the consequential technical adaptations to Article 184 “Negotiations on the future relationship” and Article 185 “Entry into force and
      application” of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (“Withdrawal Agreement”).

      These revised texts are:

      – Intended to replace the corresponding provisions included in the last version of the Withdrawal Agreement published in OJ C144 I of 25.4.2019;
      – Subject to legal revision.”

      Normally a protocol is considered to be a part of the overall treaty, as made explicit for the EU treaties in Article 51 TEU:

      “The Protocols and Annexes to the Treaties shall form an integral part thereof.”

      but perhaps the Commission spokesman was distinguishing between them.

    • forthurst
      Posted November 7, 2019 at 11:51 am | Permalink

      I have no idea what Boris Johnson wants or would aim for should he win a majority; however, the Brussels regime will be aiming for a free trade deal which would look to an observant Martian exactly like membership of the EU without MEPs and membership of the Council of Ministers.

    • Denis Cooper
      Posted November 7, 2019 at 12:54 pm | Permalink

      Further to my earlier comment, Shanker Singham has produced this reply to the article mentioned yesterday:

      https://brexitcentral.com/the-johnson-deal-is-not-perfect-but-we-cannot-afford-to-delay-the-brexit-process-any-further/

      “I read Ben Habib MEP’s article on BrexitCentral yesterday and thought it important to explain in a bit more detail why I think he is wrong – and why the Brexit Party is risking Brexit itself and doing so based on a false premise … ”

      Unfortunately while most of his riposte is fairly convincing there is a sting in the tail, and it is the same problem that turned the 10 DUP MPs against the deal and provided Oliver Letwin with his narrow margin for victory:

      http://johnredwoodsdiary.com/2019/11/04/speaker-election/#comment-1068659

      Here are the crucial sentences:

      “It was the case that the May backstop could last forever, and because that was written as a customs union for all of the UK, we could indeed have ended up trapped in it. The Northern Ireland protocol applies only to Northern Ireland, not Great Britain, and will be superseded by the provisions of the FTA. We will either have an FTA or we will not. If we do not, we will fall back on WTO rules and any mini-deals the EU is willing to do, as well as the NI protocol.”

      So is it not the case that a UK-EU FTA may have only a marginal economic impact but Boris Johnson has staked the integrity of the UK on getting one?

      What effect will that have on the strength of the UK’s negotiating position?

      Incidentally the letter to which I referred has been published in the Maidenhead Advertiser today, under the heading:

      “Boris Johnson forging risky Battle of Britain”

      An allusion to “The Narrow Margin” of that victory in 1940.

  4. Mark B
    Posted November 7, 2019 at 5:53 am | Permalink

    Good morning.

    Can we please make it clear to the likes of Lorne that tariffs are only paid by the consumer and not the seller. Only I hate for him and others to waste their money on ‘expensive advisors’ telling things that are wrong.

    http://johnredwoodsdiary.com/2019/11/06/its-the-economy/#comment-1069048

    It is odd that Remain campaigners both claim a free trade agreement with the EU is essential to our continuing trade with them, but try to prevent any free trade agreement with the USA.

    The reason I believe we are being told all this guff about the need for and FTA with the EU is to provide cover for their Association Agreement. You know, the one that countries that wish to become members of the EU sign.

    • Here and Now
      Posted November 7, 2019 at 7:13 am | Permalink

      Tariffs are paid by the seller. They go to the government that imposes the tariff. Please try to understand the basics.

      • Know-Dice
        Posted November 7, 2019 at 9:15 am | Permalink

        Interesting.

        I always thought tariffs (customs duties) are paid by the importer and ultimately the end customer.

        Worth noting that currently whilst in the EU 80% of tariffs collected on imports from outside the EU (CET) are paid to the EU. That’s around £4 Billion that could be spent in this country in future.

      • SecretPeople
        Posted November 7, 2019 at 9:20 am | Permalink

        and the costs passed on to the consumer.

      • Michael McGrath
        Posted November 7, 2019 at 9:58 am | Permalink

        HAN

        I pay the foreign seller for the goods

        I pay the transporting company and the Insurance company to get the goods to me

        I pay UK Customs duty, if applicable, on the sum of the above three costs

        That is the basics

      • graham1946
        Posted November 7, 2019 at 10:27 am | Permalink

        Absolutely wrong. Import something from outside the EU and see who gets the bill – it will be you if it is over £30 value. On our imports, our importers pay the duty to the government who then send 80 percent of it to Brussels. No-one ever mentions this when talk of our subs comes up, but it is around 3 billion a year, a further tax on us imposed by Brussels Any other arrangement would be between buyer and seller, but duties are paid by the importer in the importing country.

      • kzb
        Posted November 7, 2019 at 10:36 am | Permalink

        Are they? If I order something from China it is me that has to pay the customs duty here in the UK.
        However , taking a wider view, the UK producer can still sell into the EU, but to compete they have to lower the price to compensate for the import tariff. So in a way they do pay, but only indirectly. EU tariffs on some foods are quite high, I am not sure what they are for seafoods, but if it is say 15% then UK suppliers will have to reduce prices by 15% to compensate. This could make the business unviable.

        • miami.mode
          Posted November 8, 2019 at 12:05 am | Permalink

          kzb, not really splitting hairs (lol), but actual discount by the supplier need only be 13.043% to achieve the same original price. Still probably unviable, but…….

      • Dennis
        Posted November 7, 2019 at 12:50 pm | Permalink

        ‘Tariffs are paid by the seller.’ What?

      • Fedupsoutherner
        Posted November 7, 2019 at 4:15 pm | Permalink

        Here and now. It’s the buyer that pays the tariffs. Just Google it. It’s simple when you have a little practise.

  5. Helena
    Posted November 7, 2019 at 6:08 am | Permalink

    Could you kindly provide an example of a Remain campaigner claiming a free trade agreement with the EU is essential, while trying to prevent any free trade agreement with the USA. I know of none – all instead want both. Poor that you choose to misrepresent the views of your opponents

    • Richard1
      Posted November 7, 2019 at 7:07 am | Permalink

      What an odd post. The entire remain and continuity Remain campaigns have focused on the supposed disaster to the economy of leaving the EU and possibly having tariffs – the ‘cliff edge’ if you recall. Meanwhile the Labour Party appear seriously to base their election campaign on the ludicrous and mendacious assertion that Boris Johnson wants an FTA with the USA in order to be able to ‘sell’ the NHS. It is beyond absurd and will be seen as such by the voters.

    • Stred
      Posted November 7, 2019 at 8:13 am | Permalink

      Once we leave…..we can set those tariffs.
      That would be after we have finalised the trade deal with the EU after M. Barnier has taken his trois annees n’est ce pas?

      Reply The government says it will leave on 31 December 2020

      • Shirley
        Posted November 7, 2019 at 8:58 am | Permalink

        Reply to reply: Why should we believe the government? They have hardly been honest with us so far. Once the votes are in, it will be the same old claptrap and deceit.

      • Stred
        Posted November 7, 2019 at 10:28 am | Permalink

        If the government is going to leave on 31.12.20, it will need to leave on WTO if Barnier is still playing games. The manifesto must make this clear or many will vote BP. We still pay the agreed ransom with no deal and the ECJ will adjudicate. The political bias of the judges is made clear in the recent DT article and the one today on Conservative Woman.

      • Posted November 7, 2019 at 10:35 am | Permalink

        Your reply, Sir John, sadly rings hollow.
        The government said it would leave on a couple of previous occasions. It may not stick to this date (if it’s given the opportunity of setting it), as it didn’t stick to the others – due to ”extenuating circumstances”, perhaps? Just like before?

      • Hope
        Posted November 7, 2019 at 12:35 pm | Permalink

        JR, specious answer. How many times has the Tory govt given dates to leave and failed/lied? Johnson’s servitude plan by his own previous remarks is not leaving.

      • Dennis
        Posted November 7, 2019 at 12:53 pm | Permalink

        ‘Reply The government says it will leave on 31 December 2020’

        What odds are the bookies giving on this?

      • ian wragg
        Posted November 7, 2019 at 1:33 pm | Permalink

        It said March 19, October 19 and jan20 and now end of 2020. Why should we believe that unless we have signed uo to all in the WA and PD which is essentially remaining in the EU.
        Fool us once……,,,,,,,,

    • formula57
      Posted November 7, 2019 at 8:26 am | Permalink

      @ Helena – What about the whole Labour Party (minus dissidents)? I cannot name all c. 200,000 but give you J. Corbin for one with whom to start.

  6. Garland
    Posted November 7, 2019 at 6:10 am | Permalink

    Ho hum, another day, another posting proving that John Redwood does not understand what non tariff barriers are

    • Anonymous
      Posted November 7, 2019 at 7:22 am | Permalink

      Posted within 2 minutes of Helena.

    • Martin in Cardiff
      Posted November 7, 2019 at 8:00 am | Permalink

      Yes.

      Also, the argument that the European Union is “cumbersome” because twenty-eight countries have a veto in certain areas is laughable when you consider this:

      The WTO is run on the basis of “consensus”, meaning that every one of its a hundred and sixty-four members has an effective veto, and it is almost impossible to get agreement on any change to the rules.

      That is one reason why Trump has threatened to pull out.

      • Mitchel
        Posted November 7, 2019 at 11:35 am | Permalink

        Given that Mr Trump has vetoed suggested appointments to the WTO judges panel,the arbitration process is,as one commentator put it,”slipping into a coma”.

      • libertarian
        Posted November 7, 2019 at 12:48 pm | Permalink

        Martin

        Thanks for demonstrating that you dont have a clue

        Google Tomatoes and Italians/Australia trade agreement for a laugh at how almost impossible EU trade deals are . The average EU trade deal takes between 10 and 12 years the average trade deal between non EU countries takes on average 14 MONTHS

      • Edward2
        Posted November 7, 2019 at 1:01 pm | Permalink

        Meanwhile international trade just carries on.
        Billions of people and businesses deciding to buy goods from each other from all over the world.
        The internet is a big driver of this growth.
        It confuses socialists who need to try to control thing but it is an impossible task for them in the modern international trading world.

  7. BW
    Posted November 7, 2019 at 6:11 am | Permalink

    The thought process is correct but with the Boris WA we will spend most of our time fighting and probably losing in the ECJ. We should never allow the ECJ supremacy.

    • Brexit now!
      Posted November 8, 2019 at 4:59 am | Permalink

      I fully agree. Boris’sdeal gives an explicit role to the ECJ. A foreign court will have control over this country. That in itself is enough to mean it HAS to be rejected

  8. Shirley
    Posted November 7, 2019 at 6:12 am | Permalink

    What’s the point of even thinking about FTA’s of our own? The new EU Treaty (if accepted) will hamper our ability for years to come, and possibly forever!
    Only a clean (WTO) Brexit will allow us complete freedom to strike our own trade deals, and that will never happen while LibLabCon dominate the political scene.

    • Pollen Counter
      Posted November 7, 2019 at 7:16 am | Permalink

      NO! We must trade on WTO terms only. No trade deals! Trade deals hamper our freedom to set our own course. NO trade deals! You are sadly not a true Leaver, Shirley

      • Pominoz
        Posted November 7, 2019 at 9:43 am | Permalink

        PC,

        I do not see how you read Shirley as not a true leaver. You seem to be shouting exactly the same message.

  9. Ian Wragg
    Posted November 7, 2019 at 6:16 am | Permalink

    With the EU it would be anything but a free trade agreement. We will have to surrender control of our fish.
    Follow EU social, environmental, taxation and other policies.
    The WA is NOT leaving. It’s Vassal status.

    • Dame Rita Webb QC
      Posted November 7, 2019 at 6:36 am | Permalink

      Perhaps JR might like to do a piece on the radical new path to be taken by Boris. Along with the WA and the rest of their domestic agenda, it appears the Conservatives have ran out of ideas and are simply in engaged with Labour as to who can make the bigger BS promises of more nurses and coppers.

    • Alan Jutson
      Posted November 7, 2019 at 7:13 am | Permalink

      Ian

      Agreed that is why when people eventually wake up and find out what the W/A really is, Boris will end up short of a majority, because the Brexit Party will gain many votes in areas contested by the Conservatives, which will split the leave vote, which is why he needs to talk to Farage urgently

      Boris may not like it, but that is the way it needs to be if we want a leaver majority.

    • GilesB
      Posted November 7, 2019 at 7:37 am | Permalink

      Indeed. Trade agreements should be about trade not social, environmental, taxation and other dimensions.

      The EU sneaks in all these other dimensions with the excuse of ‘level playing fields’. This is a nonsense. Different countries have different geography, climate, demographics and values. Making everywhere the same is neither possible nor desirable. Diversity is good and needs to be maintained not eliminated. If everywhere were to be the same, then there would be no benefits from trade!

      The EU just wants to control everything, everywhere.

      If we want to have treaties on environmental protection, let’s have them. If we want treaties on social protection, let’s have them. But don’t pretend that they should be/ need to be tied to trade.

      The need for standards is a totally different issue. And best addressed through consumer protection needed anyway for in-country manufacturing.

    • Martin in Cardiff
      Posted November 7, 2019 at 7:41 am | Permalink

      “Our” fish.

      Who are you? Neptune?

      Hilarious.

      • zorro
        Posted November 7, 2019 at 9:07 am | Permalink

        Our fishing grounds, does that make it easier for you to grasp the concept?

        zorro

      • JohnK
        Posted November 7, 2019 at 11:57 am | Permalink

        Martin:

        I take it that the concepts of national waters and exclusive economic zones are alien to you?

        Do us all a favour and try not to parade your ignorance.

    • Andy
      Posted November 7, 2019 at 7:53 am | Permalink

      Free Trade Agreements require give and take. You find something you want from the other side, and they tell you what they want in return. You do not just get something in return for nothing.

      Our fishermen want tariff and barrier free access to the EU market. Which is absolutely something the EU will offer. Providing you give something in return. They want access to UK waters. Deal or no deal?

      Remember if you pick no deal you are putting some British fishermen out of business. So tell us what you’ll do.

      • Fred H
        Posted November 7, 2019 at 8:56 am | Permalink

        Andy — we still have fishermen? Is that anglers of rivers and lakes, or deep sea trawlermen trying to catch almost extinct cod as a result of EU over-fishing?

      • Fedupsoutherner
        Posted November 7, 2019 at 12:16 pm | Permalink

        Oh, Andy’s awake! What about the hundreds of fishermen jobs already gone? Wait for Andy’s mum to tell us that fishermen just sold their boats to make a profit when really what happened was that the agreement over how much they could fish meant they couldn’t make a living.

      • Edward2
        Posted November 7, 2019 at 1:06 pm | Permalink

        You talk in absolutes.
        Negotiations end with deals that suit both sides.
        If we have tariffs added by the EU then we may then add tariffs on those same items.
        Have you ever done any negotiations Andy?

      • ian wragg
        Posted November 7, 2019 at 1:35 pm | Permalink

        but the EU is all take and encouraged by our spineless government.

      • Andy
        Posted November 7, 2019 at 4:11 pm | Permalink

        See. I asked you all a simple question. You want tariff and barrier free access to EU markets for fish products. I asked what you are giving up in return. Because this is how a trade negotiation works.

        And none of you can answer. Brexiters face some very uncomfortable choices ahead. You are going to have to prioritise some industries over others. You are going to have to consign some to the dustbin entirely. You have not yet figured this out. It will be funny when you do.

        • Edward2
          Posted November 7, 2019 at 10:42 pm | Permalink

          You aren’t interested in any answers.
          Your mind is made up.

    • Mitchel
      Posted November 7, 2019 at 11:29 am | Permalink

      I’ve just noticed the Russians have finally got around to replacing their Ambassador in London-the previous incumbent left a few months ago to take up the prestigious role as Head of the Moscow Academy of Diplomacy-presumably they were assessing the likelihood of us actually leaving the EU or not and who the next PM might be to see what experience and skillset would be required.Judging by the credentials of the new appointee,Andrei Kelin,with his EU experience,they’ve determined that we are not leaving in any meaningful sense.

  10. agricola
    Posted November 7, 2019 at 7:07 am | Permalink

    WA2 is undoubtedly a slight of hand confidence trick that we are led to believe we need it in order to leave the EU. Signing it would put us in the position of having to sacrifice aspects of our sovereinty in order to achieve an FTA with the EU. Additionally we would be paying the contrived £39 billion for nothing. Farage is quite right to take up the position he has. The only thing WA2 achieves is to alter but not improve the way the Irish border is handled.

    In this diary submission you have effectively said that all the political fuss over WTO rules and FTAs are just a storm in a teacup. No doubt because you have switched into election mode you are not prepared to condemn WA2 as you have WA1 in the recent past. This allows WA2 to be sold to the electorate as the solution when in reaaity it is snake oil. It merely projects us into further years of protracted wrangle where many aspects of our sovereinty are up for grabs, like fishing and financial services for example. Ultimately it makes voting Conservative very difficult.

    Reply I set out my views on the WA in the Commons debate and on this site

  11. Posted November 7, 2019 at 7:20 am | Permalink

    It is not about tariffs.
    The JIT trade depends on sealed containers being shipped, unopened from sender to recipient.
    Before and after opening, they need inspection by approved inspectors. The big question is this: who approves them? The EU or the UK? (If you answer the Uk, then remember the EU does not accept that.)
    Also trade depends on registration and trust. This means licensing for all travel. So who grants those licences? The EU or the UK? (If you answer the Uk, then remember the EU does not accept that.)
    We live in a world where my next door neighbour’s Volvo has brakes made in Korea. Interrupt that and world trade comes to an end. This is that serious.

  12. Kenneth
    Posted November 7, 2019 at 7:28 am | Permalink

    I do not like “trade agreements” between nations. I much prefer trading between people and companies.

    International agreements and treaties are necessary but many of them can impose rules that we cannot easily change through our domestic political process.

    I think the best free trade agreement would be a single sentence where we agree that governments allow traders to get on with their business unhindered by tariffs and excessive regulation.

    May be utopian, but that should be our goal.

  13. Martin in Cardiff
    Posted November 7, 2019 at 7:39 am | Permalink

    Yes, there are misunderstandings, and they are mainly propagated and perpetuated by those hostile to the European Union.

    The main problem with trade arrangements is not tariffs. It is REGULATION.

    That was the brilliance of the Single Market – common rules and standards for all commodities and services.

    To replicate that on a piece-by-piece basis with, say, the US is an enormous task, and it is why FTAs are always far more limited in their scope. They often don’t include services at all, for instance, but even then take years for the limited, defined range that they do cover.

    • Denis Cooper
      Posted November 7, 2019 at 4:18 pm | Permalink

      That “brilliance” of the EU Single Market comes at a hefty price.

      https://www.eesc.europa.eu/resources/docs/costregulation_2009_bis-2009-00286-01.pdf

      “In 2004, Peter Mandelson, then European Trade Commissioner, estimated that EU directives and regulations cost 4% of EU GDP per annum.”

      “The Mandelson estimate may be compared with another Commission estimate which put just the administrative burden of both EU and member state regulation combined at about 3.7% of GDP for the EU as a whole. Administrative burdens are only a part of the total cost of regulations to business which is much greater. To reconcile the two figures, we need to gross the administrative burdens up to the total cost and add EU member state regulation. Doing that with reasonable estimates puts the Mandelson figure adjusted for EU and national regulation at 6.7% … the EU administrative burdens estimate adjusted to include substantive compliance costs of regulation at 12.3% of EU GDP … “

  14. Sharon Jagger
    Posted November 7, 2019 at 7:45 am | Permalink

    Old habits, die hard.

    The successive governments have been lying and concealing the truth about this “club” and our membership of it, and it’s true goal – since the 1970’s. The government – for some strange reason – want us signed up to the EU. I don’t believe anything has changed. At least there’s no evidence to the contrary!

    Boris’ current route will not get us free, for many years – if ever!

    • Shirley
      Posted November 7, 2019 at 9:02 am | Permalink

      Agreed. It just kicks the can down the road in the hope that business and people will be so fed up of the uncertainty that they just roll over and accept whatever the EU (and our politicians) demands.

  15. Andy
    Posted November 7, 2019 at 8:00 am | Permalink

    I don’t know any Remainer opposed to an FTA with the US. Providing, of course, that the terms are agreeable. I doubt most Britons would accept our country being flooded with American Frankenstein foods – and, aside from Farage’s clan, few want the NHS sold off to the highest bidder.

    We don’t have to have an FTA with the EU either. But not having one will make us poorer and it will massively increase bureaucracy for anyone buying from or selling to the EU. Both of these things go against the promises made by Vote Leave in 2016. Also you’d struggle with the monumental backlash when you try to explain away your baffling decision to pointlessly put up prices.

  16. George Brooks
    Posted November 7, 2019 at 8:04 am | Permalink

    We have endless ‘Project Fear’ claims that Leaving the EU will cause but I have yet to see or hear one good reason for Remaining.

    If BJ does not drop his so called ‘wonder deal’ by November 14th he will drop the Conservative party into the deep and nasty for a very long time to come and parliament will be in an even bigger mess than it was before the election.

    No 10 is worried about Corbyn but let’s worry about the future of our country

    • Fred H
      Posted November 7, 2019 at 8:53 am | Permalink

      well said.

      • Chris
        Posted November 7, 2019 at 2:00 pm | Permalink

        Agreed, FH.

  17. formula57
    Posted November 7, 2019 at 8:23 am | Permalink

    And let us not lose sight of how free trade agreements can be costly to both parties by diverting trade away from the lowest cost sources, as shown by the US – Australia agreement.

  18. Mike Wilson
    Posted November 7, 2019 at 8:57 am | Permalink

    And, as always, the presumed and automatic assumption that global trade is a wonderful thing. As global trade has grown I would say this country has gone down the pan. We have outsourced manufacturing to other countries. We used to have job security and decent pensions. Now we have zero hours contracts and a generation faced with absurdly high house prices and virtually pointless workplace pensions. When trade is global we are forced to compete for jobs with people who earn very low wages compared with the wages needed to live in this country. Whose bright idea was that???? Politicians!

    I’d vote for anyone who said they wanted this country to be self sufficient in food and energy production and as self sufficient as possible in manufactured goods.

    • Fred H
      Posted November 7, 2019 at 4:20 pm | Permalink

      Mike – -precisely…..pull up the drawbridge!

  19. Kenneth Morton
    Posted November 7, 2019 at 9:33 am | Permalink

    While the EU and Remainers in the United Kingdom remain obsessed with their own arrangements, events elsewhere are moving forward rapidly.

    The ASEAN nations have been meeting in Thailand and are working on a Free Trade Agreement that will cover nations producing over one third of the world’s economic activity. This is comparable to the situation in Europe one hundred and fifty years ago.

    In 1869 it would have been madness for Mr Gladstone to ignore European trade to concentrate instead on the economies of the newly emerged Japan, the Dutch East Indies and Siam! But what goes around…..

    The United Kingdom can thrive outside the EU and the sooner this happens thebetter

  20. A.Sedgwick
    Posted November 7, 2019 at 9:41 am | Permalink

    BJ could pull off a small majority purely because Corbyn & Co. could not be much more of a threat. He needs to get real and reach an agreement with NF, who is no fool and knows how appalling the Marxist/anarchist momentum is.

    We do not need another treaty with the EU; Rome, Maastricht, Nice, Lisbon were enough.

    Why do we have to sign a treaty?

    A meaningless, revised political declaration should be the aim. Signing another treaty is almost as bad as Corbyn. Too many of us dumb, ordinary people, know this and the CP will not win a serious majority unless BJ and NF agree.

    • Posted November 7, 2019 at 10:18 pm | Permalink

      I believe you’re right, Mr/Ms Sedgwick. There is the predictable MSM hysteria concentrating on the Tories and Labour, who are vying with one another to promise us the earth and all the gold we can eat, whilst ignoring the BP elephant in the room. Their policy seems to be to disregard it and let the press do its work of bamboozling people into voting for one or the other. The establishment is worried about this new kid on the block.
      Tories and Labour seem to be afraid of the Brexit Party taking a large slice of what they believe is theirs by right. If Mr BJ refuses to contemplate any recognition of the Brexit Party’s popularity, then it makes it seem as if he doesn’t really want Brexit, unless it’s a very watered down version, that ties us to his (and he certainly does seem comfortable with it) EU in perpetuity.

  21. Denis Cooper
    Posted November 7, 2019 at 10:03 am | Permalink

    Do I really need to say much more than I have already said, repeatedly?

    http://johnredwoodsdiary.com/2019/11/01/foreign-leaders-and-elections/#comment-1067936

    “Well, I’m sorry that people are still obsessing about special trade deals, whether that is the present special Single Market trade deal that we have with the other EU countries or putative new special trade deals we could have with other countries around the world such as the US, none of which special trade deals have or would have anything like the economic impact that is regularly implied … ”

    http://johnredwoodsdiary.com/2019/09/04/how-do-you-want-the-government-to-proceed/#comment-1051405

    “Perhaps one day the Tory party will wake up and recognise that even if free trade was a significant engine of prosperity and progress in the past we seem to have now reached a point of diminishing returns, and stop grossly overstating the importance of special trade deals to our economy – whether that be the EU Single Market arrangement or some new trade deal with the USA.”

  22. Gareth Warren
    Posted November 7, 2019 at 10:06 am | Permalink

    In all the brexit excitement the value of a FTA has been inflated.

    Here our “FTA” with the EU that we pay £20 billion for has as its central purpose to divert trade to europe. The tariffs it requires on trade with the rest of the world along with losing control of resources such as fishing make it a hinderance.

    Here I see as FTA more as a expression of friendship, which is why our membership of the EU preventing us from feer trade with countries such as USA, Canada, Australia, New Zealand, and South Africa, countries that fought alongside us, is such a ambomination.

  23. Chris
    Posted November 7, 2019 at 10:10 am | Permalink

    Slightly O/T but key to Brexit actually being effected: poll results on need for pact.
    Conclusion by Prof Goodwin:

    “We have an elite-mass disconnect here. Most Conservative and Brexit Party voters want what senior Conservatives don’t want”.

    https://twitter.com/GoodwinMJ/status/1191828990836781057
    Matthew Goodwin

    “Would you support or oppose the Conservatives making a pact with the #Brexit Party so they do not stand against each other?”

    CONSERVATIVES
    Support 70%
    Oppose 8%

    BREXIT PARTY
    Support 81%
    Oppose 6%

    LEAVERS
    Support 55%
    Oppose 16%

    YouGov Nov 1
    Dont knows excluded.
    #ge2019

    1:25 PM – 5 Nov 2019

  24. glen cullen
    Posted November 7, 2019 at 10:13 am | Permalink

    Sir John

    100% agree with your assessment

    And to be honest its pretty simple to follow and understand

    Can’t understand why the media and some politicians are confused on this subject

    And why the government aren’t pushing for an immediate FTA, lets face it we’ve been in transition now for 3.5yrs….its time to move on

  25. John O'Leary
    Posted November 7, 2019 at 10:37 am | Permalink

    There is a difference between ‘free trade’ and ‘frictionless trade’. It is the latter, due to product inspections, especially for food, plants, auto, aerospace and electronics that will seriously hamper trade with the EU. It would have been so much cleaner and straightforward to have opted for Efta/EEA which is far better than Johnson’s WA. No CAP, CFP, ECJ, EAW.. in fact all the stuff we wanted out of and far more control over freedom of movement than we have now.

  26. miami.mode
    Posted November 7, 2019 at 11:36 am | Permalink

    …….Once we leave we can decide whether to remove those tariffs or not………

    You don’t seriously believe that to get some sort of trade agreement with the EU will not entail us acceding to all their requirements which will undoubtedly include access to our fishing grounds, restrictions on our financial sector, and many other onerous conditions which are intended to inhibit our ability to compete with the EU.

    They have shown their hands on too many occasions in both words and deeds to believe otherwise.

    Reply Why would we agree to such a bad deal?

    • The Prangwizard
      Posted November 7, 2019 at 2:52 pm | Permalink

      Reply to reply:

      May and Johnson along with many others in government have agreed to disastrous terms imposed by the EU so why do you persist in your naivity?

    • miami.mode
      Posted November 7, 2019 at 3:01 pm | Permalink

      Reply to reply I agree that we shouldn’t, but on the basis of the last parliament too many of your fellow MPs would not vote for a No (Trade) Deal. Hopefully the current election will solve it.

    • Shirley
      Posted November 7, 2019 at 4:06 pm | Permalink

      Reply to reply … because the government and Parliament won’t accept ‘no deal’ and a bad one-sided deal is all we will ever get from the EU?

  27. Denis Cooper
    Posted November 7, 2019 at 11:38 am | Permalink

    JR, I think that after your “there is no WTO requirement to impose tariffs on imports” it could be usefully added that there is also no WTO requirement to inspect imported goods, whether that is to be accomplished by intercepting them at the border or by tracing them to depots or wholesalers or end customers after they have entered the country.

    This was made clear by a WTO official speaking in Dublin a year ago:

    https://www.irishtimes.com/news/ireland/irish-news/wto-says-its-rules-would-not-force-eu-or-uk-to-erect-hard-irish-border-1.3710136

    “WTO says its rules would not force EU or UK to erect hard Irish border”

    “Expert says it is up to London and Brussels to protect their own markets in no deal Brexit scenario”

    “There is nothing in WTO rules that forces anyone to put up border posts,” said WTO spokesman Keith Rockwell on a visit to Dublin last week.”

  28. Gravyman
    Posted November 7, 2019 at 12:12 pm | Permalink

    We didn’t need a FTA when we had the Empire we just traded as we wished- we had a super Merchant Navy then running like a massive conveyor system to the four corners of the earth but all is changed now- and at this time we have morphed a FTA with the EU as an equal partner which suits most sensible and business people in today’s modern world but not liked by English Nationalism that is still hankering back to the old days- to a life long since gone- sad really.

    And neither is the US the answer to our prayers- like in everything else they will prove to be a great disappointment- I say with or without Trump

  29. Dennis
    Posted November 7, 2019 at 1:01 pm | Permalink

    There are many good questions, some quite fundamental, from posters in all of JR’s pieces which should be answered to enlighten many of us but JR never does so. Why? It would appear that he doesn’t know the answers which is disturbing.

    If they are unknowable then we are certainly living in the dark.

    Reply The answers to most of them are in the articles I have published.

    • Dennis
      Posted November 7, 2019 at 11:50 pm | Permalink

      Reply to the reply – ‘Reply The answers to most of them are in the articles I have published.’

      That reply is pointless if you don’t give links to your past relevant pertinent articles. Do you think you never have new readers? And many questions need only a yes or no which you don’t give.

      Reply If new readers are interested the past articles are easily accessed and the search facility will take you straight to the relevant one

  30. glen cullen
    Posted November 7, 2019 at 1:24 pm | Permalink

    I’ve just realised that we can’t do any ‘free-trades’ until after the WAB implementation period is completed and the government are saying that will be 31st Dec 2020

    However just reading article 132 that this implementation period maybe extended by a further 2 years (house of commons library dated 22nd Oct)

    There’s one lesson from history that we haven’t learnt from…and that is this government will use every EU extension available

    So its 3 years until we can do FTAs

    Reply The government has promised an end in December 2020. Nothing to stop negotiations of draft agreements in the run up to end 2020 as I understand it

  31. Graham Wheatley
    Posted November 7, 2019 at 1:38 pm | Permalink

    It’s another feint to prop-up the remoaners’ plan to subvert the referendum result, overturn Brexit and revoke our declaration of Article-50.

    Project-Fear v.7.11.19.

  32. Fred H
    Posted November 7, 2019 at 2:59 pm | Permalink

    Boris’ WA.
    Text understood to be written by Martin Howe QC, edited for brevity.
    At present, the ECJ is a multinational court in which we jointly participate. After we exit the EU, it will become an entirely foreign court. It will be an organ of
    the opposite treaty party with whom we may be in dispute, owing no
    loyalty at all to the UK. It is virtually unheard of in international
    relations for any sovereign independent state to submit the
    interpretation of its treaty obligations to the courts of the opposite
    treaty party, allowing them to be effectively re-written for the
    benefit of that party. A clause (Art.174) means that the nominally independent arbitration panel set up to decide disputes would have to refer any issues of EU law for decision by the ECJ, and moreover would be bound by the result. Where the dispute concerns such
    issues, this would reduce the arbitrators to being a post box to send
    the dispute on to the ECJ and a rubber stamp to formalise the ECJ’s
    reasons. The ECJ would be the effective decision maker.

    Secondly, the WA would still contain the so-called transition period.
    It is understood (although this is not reflected in the legal text)
    that Boris Johnson’s government would not agree to extend this period
    beyond December 2020. During this period, the UK would be subject to
    all EU laws, both those that exist now and those that are brought in
    during that period, but would no longer have a vote or veto.
    This situation is highly dangerous for some industries in particular:
    financial services, who may be subjected to rule changes designed to
    force business such as Euro derivatives clearing from the City into
    Continental centres, and our fishing industry who will be vulnerable
    to further severe damage during the period before they can escape from
    the Common Fisheries Policy.
    The third big problem in the WA which has not been addressed is that
    it imposes financial obligations on the UK which go well beyond the
    UK’s obligations under international law. The amount of this
    gratuitous over-payment is generally referred to as “£39bn”. In fact,
    the obligation is not defined in the WA as an amount of money, but as
    a series of vague forms of words which are open to interpretation. The UK’s financial obligations are unilaterally decided upon by the ECJ instead of by a neutral arbitration mechanism. I predict that the eventual liabilities will end up a lot bigger than
    £39bn.
    But these are not the most important points. Once a Bill is placed before
    Parliament, the government will have no control over what amendments
    are tabled and which will be passed by the last-ditch anti-Brexit
    majority in both Houses. Amendments could be made – for example either
    for a second referendum, or requiring the government to go back and
    negotiate changes to the deal – which might turn a just-tolerable deal
    into a disastrous one.

    • Lifelogic
      Posted November 7, 2019 at 10:12 pm | Permalink

      Indeed.

  33. Posted November 7, 2019 at 4:11 pm | Permalink

    I come back to this site again and again because it seems to me to be chiefly about consequences….something politicians (and the electorate) rarely think about.
    For three years I have been trying to get through to those with zero commercial credentials the facts about EU trade deficits, and why WTO is not a commercial Court busy overseeing every deal. But if you’re a Space Cadet, you are hard-wired with a force field to repel every factual analysis.
    Last February, you wrote a terrific post about the elephant traps in the WA May deal. A few have gone in WA2, but nowhere near enough. The EIB sign-off in particular could easily (I’m being serious) land us with £1 trillion of liabilities, ad has no end to it.
    Quite incredible: it is the consequence to dwarf all other consequences.
    https://hat4uk.wordpress.com/2019/11/07/sam-now-watson-runs-from-gunfire-as-push-for-tactical-voting-gets-under-way/

  34. Lindsay McDougall
    Posted November 7, 2019 at 8:25 pm | Permalink

    So let me clarify the imposition of tariffs under WTO rules from different countries. Would we be allowed to admit imports from the Republic of Ireland tariff free while imposing tariffs on imports from other EU Member States? I assert the answer should be ‘yes’ because the EU is not a country but I would like to know what you think.

    Reply. No. You have to levy the same tariff on all WTO members unless covered by an FTA

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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