The Blog

This Is the Trade Deal We Will Strike Post-Brexit

The Prime Minister has demanded the Leave side explain their plan for life outside the EU, hoping perhaps we will descend into civil war over multiple options. Well, forgive me if I have a go at an answer...

The Prime Minister has demanded the Leave side explain their plan for life outside the EU, hoping perhaps we will descend into civil war over multiple options. Well, forgive me if I have a go at an answer.

Next month I visit Ottawa with the European Parliament's International Trade committee to discuss the finalisation of the new EU-Canada free trade agreement, CETA (the Comprehensive Economic and Trade Agreement). It is currently subject to 'legal scrubbing' and translation. The European Parliament will vote on it in the Autumn - a straight accept or reject decision.

Canada will have access to the EU Single Market and 99% of non agricultural tariffs will be removed. But Canada will not pay any market access fee, no membership fees, not have to enact the legal 'acquis' of 700,000 pages, or sign up to freedom of movement of EU citizens. Canada will retain its impressive visa scheme, continue to seek the world for skilled people to ease its skills shortages, and continue to run Canada for the Canadian people.

This is the kind of deal that Britain needs to negotiate with the EU. It is what I call a 'WTOPlus' deal: meaning there is a basic guaranteed WTO 'Most Favoured Nation' (MFN) deal now, with a top up free trade agreement on top - that is the 'Plus'. CETA is the Plus on top of the existing EU-Canada WTO deal. Other models based around the EEA or Switzerland could be considered at that point, but that will all follow the Referendum and be subject to discussion.

A basic WTO deal would not see the UK 'isolated' as the pro-EU doommongers state - we would be in great company as this is precisely the relationship the EU has now with the U.S., Canada, Japan, India, China, Australia and New Zealand. They all want better WTOPlus deals of their own.

So if WTO is guaranteed but includes some tariffs in certain sectors, how do we get a better trade deal?

Enter Article 50 of the Lisbon Treaty/EU Constitution. This compels the EU in the form of the Commission to negotiate a 'withdrawal agreement' with a departing member - meaning a comprehensive trade and political agreement. Note that this is contained in a treaty now and does not have the legally questionable status of the current 'deal'. The EU 'shall' negotiate is a powerful legal imperative and is far more enforceable that the Treaty free deal.

It is difficult for the Government to argue WTOPlus is not possible when they are enthusiastically backing TTIP, CETA and other WTOPlus deals with the EU now under the 'Competitiveness' label of their own deal.

As for the process of withdrawal there will be no 'chaos' as has been claimed nor sudden exit. We will not Brexit on 24th June - all that would happen would be recovery from some serious hangovers. We will still be in the EU then and still participating and paying our dues. I will still be in a job.

Indeed, we would only leave the EU - by scrapping Ted Heath's European Communities Act 1972 - once a suitable trade deal is in place. I am told that we British MEPs will even be able to vote on this trade deal in the European Parliament before packing our bags.

Leaving should be according to an orderly process laid down by the Lisbon Treaty - which allows up to two years for negotiations, extendable if both parties agree.

But what if these trade negotiations fail? This is the fear that are EU friends and partners will be 'nasty to us' and seek to 'punish' us, so we must not slip our chains.

If they tried it would be illegal under international and EU law.

But if there was no meeting of minds - and say German car manufacturers and French wine producers were content to pay 8.5% tariffs on cars and 8.8% on wine, then we would simply go back to a basic guaranteed WTO trade deal according to the ultimate arbiter of the global rules-based system: the WTO itself. If the EU does not offer a WTO MFN deal to the UK, the UK can take the EU to the WTO court to enforce it. The EU is not above international law.

Regarding future contributions, it is simply not true we would have to pay for access to the EU Single Market. Norway does not pay either - it is misleading to claim it does. I have a clip in my website of the Norwegian Ambassador confirming that in the Parliament. Nor would the UK seek to charge for access to our significant market.

What Norway does is to make voluntary contributions (meaning it doesn't have to) to poorer EU nations through a special Norway Grants body independent of Brussels. It also pays fees for membership of EU programmes and agencies as the UK would: we would continue to be a part of the Horizon 2020 Research Programme and European Space Agency, for example, as other non-EU nations are.

The UK would still influence significant legislation, but in a different way. At regular intervals a EU-UK Joint Committee would meet, just as the EU-Swiss Joint Committee meets now to discuss matters related to trade, regulation and foreign affairs. Switzerland is the EU's fourth largest trading partner, Britain is the first.

In short, friendly trading and political relations would continue but with an independent UK and the EU enjoying a better and mutually advantageous new relationship. That is the significance of that funny thing called WTOPlus.