Ahead of the proposed start of trade talks with the EU in December, the UK needs to adopt the right approach now if it is to remain an attractive trading partner after Brexit, according to a new report from the Legatum Institute’s Special Trade Commission.
The report, entitled The Brexit Inflection Point: The Pathway to Prosperity, argues that the window of opportunity is closing for Britain to establish itself as a truly independent trading nation after March 2019.
The report describes the opportunity on offer: for the UK to achieve the flexibility to trade with nations all over the world, whilst demonstrating international leadership on reforming global trade. It also describes what is at stake: that failure to secure the right terms in the interim will leave the UK without the leverage needed to strike the right trade deals, placing it in a permanent rule-taking position, only halfway out of the EU.
To make a reality of ‘Global Britain’ and the prosperity it promises, the UK Government must:
- Be in a position to deliver an independent trade policy as soon as possible.
- Achieve a Free Trade Agreement (FTA) with the EU that eliminates tariffs on goods and agriculture, with deeper liberalisation in services and a new customs chapter.
- Agree interim measures in an implementation period based on WTO-compatible zero tariffs, a new customs arrangement, and regulatory recognition, whilst avoiding being locked in to EU regulatory arrangements such as the EEA agreement or EFTA.
- Move to substantive negotiations with the EU as soon as possible to capitalise on the leverage it enjoys before March 2019.
- Take a leadership role within the WTO, explaining why the UK and WTO members now share a trade liberalising agenda.
- Enhance UK regulatory bodies to enable Mutual Recognition Agreements (MRA) with the EU and others, as well as regulatory recognition.
- Prioritise US-UK and potential accession to platform agreements like the Trans-Pacific Partnership, if available.
- Instruct UK customs agencies to liaise with EU counterparts to enhance domestic business awareness and accelerate contingency planning.
Commenting on the findings of the report, the Legatum Institute’s Shanker Singham said:
“Trade is a crucial pathway for moving countries from poverty to prosperity. In leaving the European Union, the UK can create an independent trade policy which can unleash the innovative capacity of its economy, and provide global leadership on free trade: but only if the government makes the right decisions in this brief window of opportunity.
“The right decisions now will allow the UK to embrace the world as an independently trading sovereign state; the wrong decisions will render the UK a rule-taker, bypassed in trade negotiations. For the sake of future prosperity, it’s crucial the Government acts now to secure full independence and a strong negotiating position.”
Read the paper here.