1 February 2024

Seize the benefits of Brexit, or the Blob will drag us back into the bloc

by Daniel Hannan

Originally published by Daily Telegraph.

Do you remember the Great Tomato Shortage of 2023? For a few weeks in February and March, some supermarket shelves were bereft of those gleaming, crimson, umami-flavoured globes. A combination of high energy prices and cold weather had caused a dearth across Europe.

The middle classes are not lightly denied their bruschetta, and the usual halfwits were quick to blame Brexit, ignoring the fact that there were as many empty shelves across the Channel. The Guardian positively fizzed with fury. I wonder whether poor Dominic Raab would have had to resign had he instead been accused of hurling tangerines or turnips into his bin. Discarding tomatoes, in early 2023, was akin to burning £50 notes in front of homeless people.

Oddly, though, no one pointed out that we were continuing to restrict the importation of tomatoes from non-EU states. I’d like to dwell for a moment on this policy, since it perfectly illustrates not just our failure to take advantage of Brexit, but what is beginning to look very much like a determined effort by the Blob to keep us tied to EU standards in anticipation of a Starmer government.

We import 80 per cent of our tomatoes, and our chief supplier is Morocco. Because Morocco is outside the EU, its exports are subject to tariffs and quotas. This is, on the face of it, utterly bizarre. Britain’s tomato season runs roughly from June to September, Morocco’s from October to April. Even the dimmest protectionists must struggle to explain whom they think they are protecting.

We have these idiotic tariffs because we inherited them from the EU, which maintains import quotas to protect growers in Spain. Incredibly, fully four years after Brexit came into effect, we still have not amended our schedules.

When pressed, our negotiators mutter something about tariffs being too valuable a card to throw away except as part of a final and comprehensive trade deal. But this is to misunderstand how they work. Tariffs are a tax, not on foreign exporters, but on ourselves. Exacerbating our cost of living crisis is an odd way to negotiate.

In any case, where are these final and comprehensive trade deals? We eventually got our agreements with Australia and New Zealand, both of whom wanted to go further. We joined the Pacific pact, the CPTPP. We might conclude our talks with India before the election. These deals are not nothing. But what about the rest of the world?

On Thursday, we walked away from our talks with Canada over Justin Trudeau’s refusal to open his cheese market. Canada is notorious for propping up its dairy sector, much of which is in Quebec. But it left me wondering why we had so little to show four years – eight if you count from the referendum – after which we were free to start scoping deals. Are we simply seeing the paralysis that characterises most of our departments? Or is something else going on? Are our officials deliberately holding the door ajar for Starmer to take us back into the EU’s trading bloc?

Hilary Benn and Sadiq Khan have called in terms for membership of the customs union. Although David Lammy and Keir Starmer talk more vaguely about a “closer relationship”, it is increasingly clear that they also have the customs union in mind.

The customs union always harmed Britain more than any other EU state, because we were the only member whose trade was mainly with the rest of the world. To stay outside the single market but rejoin the customs union would be like throwing away the burger and eating the napkin. But Starmer’s motive is political rather than economic. He wants to appeal to disgruntled Remainers without reopening the issue of membership, so he has to sign up to something.

His problem is that, the more trade deals Britain has sealed, the harder it will be to go back in. The EU could fold our agreements with Australia and New Zealand into a new one of its own – it would regard that as a price well worth paying to recover control of Britain’s trade policy. The CPTPP is trickier, but feasible. India would be tougher. Is this why our officials are dragging their feet?

Morocco is a case in point. That dynamic kingdom has been hammering at our door since Brexit, nonplussed by our reluctance to deviate from the EU. Sneering Remainers dismiss Morocco, as they dismiss all non-EU countries. They should have accompanied me last week as I toured that country’s industrial sites open-mouthed.

The new port outside Tangier is the largest, not only in Africa, but in the Mediterranean. A massive car industry has grown up around it, supplying Europe as dependably as Mexico supplies North America. Over the past 20 years, an aeronautics hub has developed in Casablanca. The main cities are connected by high-speed trains that put our railways to shame. Few places are better situated for wind and solar power and their green hydrogen by-product.

Morocco made a strategic decision to diversify beyond the Francophone world, and turned to Britain as its oldest friend (our alliance goes back to Elizabeth I, which is why Shakespeare’s Prince of Morocco is so sympathetically drawn). English is now mandatory in school, and there is talk of applying to join the Commonwealth. Our response? To sit behind our EU tariff wall and mumble that these things take time.

The Institute for Free Trade, of which I am president, has come up with a series of ideas that would liberalise our trade. Not just scrapping tariffs but creating a digital corridor between Tangier and our ports to reduce paperwork, facilitating investment into the special zones that Morocco is happy to offer exclusively to Britain, and ensuring that our trade policy fully recognises what we de facto accept (to the fury of Corbynistas), namely Moroccan sovereignty over the Western Sahara.

Morocco is an unusually vivid illustration of the wider problem: our torpor. Brexit was a generational opportunity to become more competitive – to scrap expensive regulations and reorient our commerce towards faster-growing parts of the world. But we have been hesitant, often downright cowardly, baulking at negative headlines.

One reason our talks with Canada broke down is that we insist on sticking to the EU’s rules on food standards (what trade negotiators call SPS – sanitary and phytosanitary measures). We and the EU are both breaking World Trade Organisation rules, which stipulate that SPS measures must be scientifically justified. The EU regularly uses SPS as a form of economic protectionism – beef being a prime example. The whole world, not just Canada, resents it.

Why, having left, do we retain rules that keep out beef from our traditional suppliers – Canada, Australia, Argentina, Uruguay – and reserve our market for French and Irish exporters? Again, it is hard to avoid the suspicion that this is really about easing our transition back into the customs union, accompanied by a commitment to adopt future EU rules, the so-called “dynamic alignment” that has been the European Commission’s key objective throughout.

In his last major speech as prime minister, Boris Johnson asked in bewilderment why we still had tariffs on bananas and olive oil (as with last year’s tomatoes, we are about to see a spike in olive oil prices even as we impose quotas on non-EU imports). Only so much of the blame can be laid at the door of our officials.

Had they truly wanted to, ministers could have been more radical, beginning trade talks with friendly countries by offering complete mutual recognition except where there were overwhelming reasons not to. But they were cowed by scare stories about chlorinated chicken, and the moment passed.

We could, in theory, still liberalise, not least by accepting global practice on SPS. But it seems likely that, yet again, the opportunity will slip, and that nothing will prevent our re-entry into the EU’s protectionist trade bloc. The waters will close above our heads and, trade-wise, it will be as if Brexit had never happened.