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Sir Peter Marshall was Commonwealth Deputy Secretary-General 1983-88 and UK Permanent Representative to the UN in Geneva 1979-83.

The Prime Minister has revealed that Donald Trump advised her to sue the EU. He has a point.

Theresa May would be fully justified in suing on the grounds of de Gaulle’s sudden, unilateral veto in 1963 of our application to join the EEC,  and of the exorbitant price of accession demanded of us a decade later,  on which Margaret Thatcher subsequently secured a substantial rebate.

It is impossible to quantify the economic damage this scandalous treatment did us. But at the least we could sue for I(i) payment of the amount of the rebate for each year between our accession in 1973 and when it was granted; and (ii) 0.5 per cent of our annual GDP as a token of the likely loss of income suffered by our exclusion for each year of it. Compound interest on the sums involved would have to be added to compensate for the delay in payment.

Historians are likely to judge that the ultimate damage done was political. After saying “no” successively to the Coal and Steel Community, the European Defence Community and the EEC, we decided at last in 1961 to “throw in our lot with Europe”. We belatedly applied for EEC membership. Just when we thought we were coming up the straight, de Gaulle brutally torpedoed our bid. Any chance that we could join in the European project with “full-hearted consent” perished at that moment. Division and rancour have ensued instead.

Any objective survey of our relations with our European partners since 1945 cannot but conclude that our default position with regard
to any European elaborate integration construct is one of warm support from the outside, like a flying buttress, rather than that of a malcontent, and potential heretic, within. Our problem now is to get out of the EU in the teeth of the ridiculously inappropriate provisions of Article 50 of the Lisbon Treaty.

The President’s line is that if we do a deal with the EU on the present basis,  the Americans would in fact be dealing with the EU. This would probably kill the deal.   Presumably this analysis would apply to doing deals with other countries.   The Article XXIV GATT/WTO justification for the special treatment accorded to customs unions is the contribution they make, or can make, to the expansion of world trade.  That cannot be said of the EU approach. The EU is the cuckoo in the WTO nest.

Perhaps we have reached the ultimate absurdity:  it is the UK’s democratic decision to leave – repeat leave – the EU; it is in everybody’s – repeat everybody’s – interest that we do so with the minimum of friction; but the EU has so little flexibility or imagination that we can only do so by accepting some sort of client status, which is in nobody’s – repeat nobody’s – interest.

As always, there is a long history to the problem.  The Bretton Woods Conference of 1944,  when establishing the IMF and International Bank for Reconstruction and Development, recognised the need for a comparable
 and complementary institution for trade. The Americans,  together with the UK, took the lead in drafting a Charter for 
an ITO (the Havana Charter).  Congress would not wear it.  So it failed.

Establishing the GATT was a limited but very 
useful British-led salvage operation.  But by the 1970s the need for something like the ITO was clear to all concerned. 
 
The WTO has never had the clout nor the resources required for it to do its ever-expanding task.  It has had to play catch-up.
 
The time has come to rebuild the WTO nest. A start could be made at the meeting of the G20 in Argentina later in the year.

We must look at the issue from on top,  rather than from underneath.  We live and work not in a rules-based system, but in a values-based interdependent society, which, if it is to endure, requires responsibility and a sense of obligation from all its members.

50 comments for: Peter Marshall: The EU is the cuckoo in the WTO nest

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