Brian Monteith: Free trade is breaking down barriers

Two men dressed as customs officers take part in a protest outside Stormont against Brexit. Picture: Charles McQuillan/Getty Images

During the initial meetings the UK team indulged the EU’s self-serving demand that the costs of the divorce settlement be discussed first. Now, having properly responded by  asking for the EU supplicants to provide the legal basis for any payments beyond Brexit – and then having identified what future costs for joint projects the UK might accept as being in our national interest – the numbers have already dropped from talk of £100 billion to £36bn, and may well come down further, so long as any transition period is kept short.

This week the real crux of the  matter – the trade negotiation and how it will work on a practical as well as an economic basis – finally starts. Davis’s team has been busy publishing position papers and stating its case for a mutually beneficial EU-UK trade deal that would be a win-win for both parties – but this process is as much about politics as it is about economic prosperity and there is a prevailing view in Brussels that the EU should set an example of the UK so that no other countries abandon their political project. This position is not endorsed by most of the member countries who, seeing the UK as a lucrative market, want their important trade with the UK to continue seamlessly without any hiccups.

Most prominent among the position papers is is one that argues why there should not be a hard border between the EU and the UK at the only point where the two jurisdictions meet on land – the 310 miles between the Republic of Ireland and Northern Ireland. The outcome of this will be of particular interest to Scottish nationalists who will hope that a physical border is avoided, for it would be a further blow to the already desperately poor economic case for Scottish independence.

For all the huffing and puffing by the Irish taoiseach, Leo Varadkar, it is beginning to dawn on all parties that it is not especially a British problem, it is entirely Ireland’s problem, for if a hard border materialises it will be because the EU has insisted upon it. The UK does not need a hard border – why should it?

In the event of no trade deal being secured, the UK would simply revert to World Trade Organisation rules and its exports to Ireland would most probably remain tariff-free. It would be the EU that would need the border so it could impose its tariffs, irrespective of what Ireland wants. As both Ireland and the UK are already outside the EU’s Schengen Agreement and there is a common travel agreement between the two countries dating back to 1925, there would be no need to have passport controls.

What the debate surrounding Ireland and its border with the UK points to is how it is the EU that is protectionist and insular – erecting damaging barriers to trade that hurt the world’s poorest and protect large corporations – while it is the UK that is open-hearted and  wishing to maximise commerce with everybody.

The power that trade offers to raise prosperity and break down old authoritarian or totalitarian orders is a prize worth attaining. That is why trade sanctions are  usually counter-productive and should preferably only be used in the particular (some advanced  technology) and not the general.

Key in any Brexit must be the speed at which the UK can adopt existing EU free trade agreements through a grandfathering process and consecutively introduce its own larger deals with other nations where the EU has failed to strike tariff- or regulation-busting agreements.

For every pound we export to the EU in goods and services, we export two to the rest of the world and that growing gap will accelerate as the emerging markets wish to do more business with us. More than 40 nations are now queuing up for a deal with the UK, not least some of the largest economies such as the US, China and India – but also Saudi Arabia and the five other nations of the Gulf Co-operation Council.

International Trade Secretary Liam Fox has correctly identified the strategic importance of a GCC free trade agreement and has targeted 31 big-ticket exporting opportunities spanning hydrocarbons, defence, infrastructure, science and the creative industries. Only the US, Germany and Switzerland are larger export markets for Britain than the £30bn worth of goods and services the UK exports to the GCC nations every year.

The EU is a cumbersome leviathan, requiring the consent of all 27 member states (and sometimes devolved parliaments too, such as Wallonia), whereas the UK can be nimble by deciding free trade deals for itself. It means we can become more adaptable, more dynamic and more competitive, creating more wealth for more people at home and abroad. A quick signing of an FTA with the GCC – something the EU has failed to achieve despite 20 years of negotiations – would demonstrate the seriousness of the UK’s global trade ambitions.

A good starting point to reboot trade discussions with the GCC will be at the end of the year when the UK is set to host the GCC leaders in London. It is the first time that such a meeting will be hosted outside the Gulf states and is a clear statement of their desire to trade with Britain outside of the EU. Given the instability of the Middle East, trade there can often be viewed as controversial but we should not lose sight of the bigger picture and the power for good that trade can do.

Britain must not miss this opportunity and should extend the warmest of welcomes. The consequences of not fulfilling our potential in the Gulf would be damaging to the entire process of our EU departure and demonstrating to the world our intention to become the greatest free trading nation on Earth.

For Britain to succeed where the EU has failed will require a determined commitment to building diplomatic and business relations, and not losing sight of the end goal by avoiding hard borders. What others do will become their problem.

•Brian Monteith is a director of  Global Britain