Deal or a WTO no deal?
While the CBI is not known as a friend of the Trade Unions, they do share some common analysis and concerns about leaving the European Union. This week, the head of the CBI Carolyn Fairbairn, led the British employers call for the UK to stay inside the EU single market and customs union until a final deal between Britain and the bloc was “in force”. . She stated that Brexit “uncertainty” was starting to damage the UK economy, as new data showed a 9 per cent drop in the number of jobs created by inward investment in Britain during 2016-17. Further, she said a number of companies were changing plans and slowing investment because of the prospect of “serious disruption” if the UK crashed out of the EU without an exit deal.
This chimes with some of the concerns voiced by Francis O’Grady, the TUC general secretary, who said: “Theresa May failed to win a mandate at the ballot box for her no-deal Brexit. Instead, we need a Brexit deal that puts jobs and rights at work first.” And we should not take her words for it that a new deal with the UK will be easy. History shows that any long term trade deal may take years to negotiate and British negotiators need to be realistic.
In 2013 EU governments instructed the European Commission to start negotiations with Japan. On 6 July 2017 the European Union and Japan reached an agreement in principle on the main elements of the EU-Japan Economic Partnership Agreement. The EU and Canada launched CETA negotiations in May 2009 and agreed on the content and its general strategy in June 2009. It was passed in the spring of 2017. On 14 June 2013, Member States gave the European Commission the green light to start trade and investment talks with the United States. Those trade talks which produced TTIP are still unfinished. It is also important to remember, each deal made between the E.U and an international partner, will have an impact on the trade deal the UK can make with that country. So as the UK government tries to establish agreements with Japan, Canada, the United States and so on, they are done in light of the deal with with the European Union. For example, Nick Gibbs writes; “If the UK fails to secure tariff-free access to the EU and has to pay a similar 10 percent charge to export, then Japanese automakers might find it cheaper to export some models from Japan to the EU rather than continue to supply Europe from their current stronghold of the UK. Nissan, Toyota and Honda all have significant production operations in the UK”.
Another source to trade, India, is also on both the E.U. and UK horizons. Talks on a freetrade deal between the EU and India got under way a decade ago but hit the buffers after six years, amid disagreements over agriculture, generic drugs and the movement of workers. Now, they are on the top of Merkel’s agenda. “It’s important for us to proceed with the German-Indian — or rather, the EU-Indian — free trade agreement,” Merkel, who didn’t seem too bothered by her slip of the tongue, told a crowd of CEOs and government officials gathered in a hotel in central Berlin in May. Some analysts believe Brexit may make it easier for the EU to do such a deal as it will no longer have to take account of British concerns, such as those about granting visas to Indian workers and India’s tariffs on Scotch whisky.
No deal, would be worst deal we could negotiate. It will almost definitely result in an extension of austerity, beyond that already predicted. It is likely to mean the loss of jobs and terms and conditions of workers in UK, so we can compete with emerging economies. It is likely to mean the introduction on lower taxes on businesses and middle to high income earners. ERIS will be monitoring the trade negotiations and exploring the options presented to Parliament with speakers from European and British Trade Unions over the coming 18 months, by which time the current government have assured us, they will have a deal.