Theresa May reminds voters this morning that the Brexit negotiation begins only eleven days after polling day. It may end without an agreement. If so, Britain will “go on to WTO”, as the usual phrase has it. Given last June’s high turnout; the referendum’s impact on British politics; our impending departure from the EU in less than two years; the impact of Brexit on this election and its implications for us all, it is surprising that there has been so little probing in detail of what “going on to WTO” would mean.
Today, ConservativeHome takes a break from focusing almost exclusively on the election, and opens a week-long series on what “going on to WTO” might be like. Lee Rotherham argues on this site today that the language of “crashing out of the EU”, used so often by Brexit’s opponents, is misleading – that WTO, or Most-Favoured Nation Status (MFN), as it can more accurately be called, is less like falling off a cliff than a walk to a beach. He concludes that WTO could actually be preferable to a fully-fledged free trade agreement, writing that “civil servants must now be steered away from is the obsession of dashing towards an FTA at at any price, without ever actually costing the default alternative”.
Tomorrow, Christopher Howarth will cover what WTO might mean for finance and data. On Wednesday, William Norton will examine its implications for agriculture. On Thursday, Lee will return to the site, covering tariffs and rules of origin. And on Friday, Mark Wallace will look at quotas and trade deals. There is a mass of other subjects to be covered, and we will return to some of them in due course, but it seemed best to us to start by trying to tackle some of the main issues that WTO would raise for the economy and prosperity.
One point is clear at the start. The Prime Minister says that no deal is better than a bad deal, a form of words now written into the Conservative manifesto. This is a statement of the obvious. But, as Lee suggests this morning, the choice will almost certainly not be so clear. It could well be that the negotiation eventually concludes not with a big fully-fledged trade deal, complete with no tariffs for the goods of either party, but with a WTO settlement based on a mass of smaller “deals”: in other words, arrangements to provide legal stability and a smooth flow of goods between Britain and the EU27 – based, in turn, on those that are already in place now, some of which are bilteral, others of which are backed up by international standards and norms.
This site supports that fully-fledged trade deal, for reasons that we have set out previously. But, as we put it, “the absence of tariffs comes last, not first. They are the end-point of a successful negotiation, not its starting-point. They are the icing on the cake. A smooth flow of goods; legal certainty, continuity, stability – this, as ever, will be what most voters and businesses are looking for. These are far from being incompatible with WTO. We hope you enjoy the series.