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25 August 2017

‘Free trade creates jobs’ should now be the Brexiteers’ mantra

by Guy Corbet

Originally published by Brexit Central.

It is said that history is written by the winners. For the past year, the Leavers who masterminded the “take back control” referendum victory have been writing their history. But if they are not careful, it could soon be re-written by others with an entirely different narrative.

So it is time to move on from last year’s victory and to present the arguments for Brexit that will continue to resonate now. That means being more expansive, even more positive and looking at the big picture, not as insular Europeans, but as fully engaged, global citizens. The arguments should be about the positive, life-enhancing, community-improving, culturally-enriching, wealth-generating, job-creating benefits Brexit should deliver.

Very simply, the narrative to build around should go to the heart of why a clean Brexit is a good idea: “free trade creates wealth and jobs”. That should be the starting and the end point for every argument. With “free trade creates jobs” as the focus, the Leave arguments will be on solid ground, and show many continuity Remain arguments to be weak.

Twenty years ago, 60% of the UK’s trade was within the EU. Now it’s below 45% and sinking. The UK’s future is global. The quicker we can take the existing brakes off trade with the rest of the world the quicker we will all be better off.

Of course, the question of avoiding an uncertain future remains. That future does not need to be, and should not be, calamitous. There is no good reason why making the most of new trading opportunities should be at the expense of existing ones. Free trade is not a zero-sum game. Not for the UK or the EU. Both can win.

As the central organising thought around which all of Brexit is developed, “free trade creates jobs” will also provide a framework to analyse and assess every element of the negotiations with the EU27.

Any individual measure can be looked at in terms of its contribution to one of a number of different outcomes:

  1. A good deal: in which we retain much of our trading rights with our European partners, and are free to explore new deals with the rest of the world, and to build a prosperous future. This is not the “having cake and eating it” option, but rather the best of both worlds: best for the UK and best for the EU. Once again, both can win.
  2. A bad deal: perhaps some sort of quasi-EU access, and no scope to improve our trading arrangements elsewhere, combined with high entry fees and no say over what happens.
  3. No deal (with no cliff): moving to the same stable WTO trading arrangements that already govern more than half our trade with the rest of the world, and in which we could continue to trade with Europe in an open and constructive manner. Of course, the UK’s positive balance of trade with the EU27 would mean no deal would cost them more than the UK.
  4. A punishment deal: in which, for instance, the EU tries to demand an exit fee many times greater than could possibly be justified.

The difficulty for the EU in imposing a punishment to deter others is twofold: the penalties to offset the UK benefits from global free trade would have to be extraordinary. Even so, it is hard to imagine how severe they would need to be for the lost youth of Italy, Spain or Greece to think the EU experiment is a good idea.

Focusing on how free trade can create wealth and jobs for both the UK and the EU may help stop the negotiations dwelling on mutual harm, as they sometimes seem to be at present.

Instead of trying to enumerate an unjustifiable punishment, the EU could focus on how to create healthy competition. The UK will be competing with the EU27, as it is now, and of course each of them will continue to try and attract business that is currently in the UK, as they do quite rightly now.

That is only natural. Even so, while it is what competition is about, it is hard to understand why so many Brits want to help the EU27 with that as part of the negotiation.

As an organising thought, “free trade creates jobs” provides clarity about which arguments to develop, and which to let pass.

It opens the field to serious discussion about the benefits of market economies, such as how global agricultural free trade could bring down UK food bills by 20%. This is not insignificant in a country which is rightly shamed by the growth of food banks.

More than that, not only would UK households benefit from lower food bills, but every home would enjoy a corresponding increase in disposable income. That income could be spent on other things, creating new profits elsewhere. It would mean more efficient use of resources, better investment and a stronger economy.

There are very good reasons why the rest of the world invests in the UK. They may be our legal, regulatory, investment, skills or political environment, all of which will be boosted by a Brexit which promotes free trade and creates jobs.

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