With Article 50 officially triggered on March 29, and a snap General Election called by the Prime Minister on April 18, is Theresa May making a mistake by putting all of her eggs firmly in the Brussels basket?
When I tune in every evening to watch the day’s latest news, I can’t help but feel frustrated with Theresa May placing such a huge emphasis on getting the best deal for Britain from our neighbouring EU countries. Despite the British people voting to take back control of our borders, our laws and our trade deals, the Prime Minister is still insistent on bargaining with Brussels, but at what cost? She believes that by calling an early general election, this will strengthen her stance when entering into EU negotiations. Of course I can’t blame her for calling a snap election, especially when the Conservatives are enjoying a 25 point lead over Labour according to a latest ComRes poll, making Theresa May the clear favourite to win and continue as Prime Minister. However, is she really right to prioritise a trade deal with a declining, bureaucratic EU over potential trade deals elsewhere? I think not.
It is no secret that the UK has a considerably high trade deficit with the EU; according to Full Fact, “the UK imported around £60 billion more goods and services from the rest of the EU than it exported there in the 12 months to September 2016”. Out of all 27 member states, Germany has the largest trade deficit with the UK, despite having the strongest economy in the whole of the EU. In 2015 alone, it sold approximately £25 billion more to the UK in goods and services than we sold to it. Considering the fact that Germany’s strong economy is heavily reliant on British trade, it would seem totally illogical for Germany to hinder such a trade deal from being signed once we have left the EU, particularly when no trade deal could jeopardise thousands of German jobs. With an election fast approaching in Germany as well, Angela Merkel will seek to ensure that German jobs are protected once they enter into negotiations with Britain. She knows that this can only be guaranteed so long as trade continues, even if it is with an independent Britain. Therefore, under the current circumstances, it is plausible to argue that they need us more than we need them.
However, the question that you are probably wondering whilst reading this, and the question I have been asking myself for some time, is if Theresa May decides to take a step back from her pursuit in getting the best deal from Germany and the rest of the EU, where else can she seek a potential trade deal? Under Article 50 legislation, the UK cannot formally enter into trade negotiations, or sign new trade deals with any nations outside of the EU. On the other hand, the legislation does not prevent the Prime Minister from holding informal talks with nation leaders outside of the EU. Therefore, should Theresa May decide to hold such talks, which I believe is in our national interest, where could she look towards? I have identified two potential options available to the Prime Minister.
Our friends in the Commonwealth would seem like an excellent destination to begin our nation’s search for new trade deals, not to mention the most logical. There are 52 member states, amounting to approximately 2.3 billion people who share our language, our values, and of course, our monarchy. One country in particular, India, has more recently entered the spotlight as a new Commonwealth report has come to light which claims that a post-Brexit trade deal with India would be worth an additional £2 billion per year to the UK economy.
The report, entitled ‘Brexit: Opportunities for India’ by author Rashmi Banga, states “this paper estimates that a free trade agreement (FTA) between India and the UK will increase India–UK trade by 26% per annum. The UK’s exports to India will increase by 33% p.a. while the UK’s imports from India will increase by 12% p.a.”. Despite the fact that India has been negotiating a broad-based trade and investment agreement with the EU since 2007, which is still inconclusive, the author concludes the report by stating “this proposed India–UK FTA may be easier to negotiate than the India-EU FTA, as some of the sticking points in an India-EU FTA may be easier to resolve”. Therefore, this report demonstrates that there are clear opportunities for Britain to engage with its Commonwealth partners and strengthen the economy, debunking the myths spelled by remain campaigners that the British economy would suffer as a result of Brexit.
Though the topic of trade was not on the agenda when the Prime Minister visited the recently inaugurated President on January 27 2017, President Trump did tell Theresa May in a White House press conference that he believes Brexit “will be a wonderful thing for your country”, and has previously expressed his interest in a potential new trade deal with a post-Brexit Britain prior to his election.
During the US presidential election, Mr Trump’s advisor Dan DiMicco stated that Britain will be offered a free trade deal before the rest of the EU if the Republicans win the US presidential election. In an interview, Mr DiMicco said that with the present Trans-Atlantic Trade and Investment Partnership proposals on hold, “Britain would be at the front of the queue for any future trade deal once the UK has left the EU”. The comments made in regards to a UK-US free trade deal were in stark contrast to those made by President Trump’s predecessor Barack Obama, who reiterated that Britain would go to the back of the queue for trade deals if we voted to leave the EU. The USA remains as Britain’s closest ally in the world, and Britain’s largest export partner. Now that the USA has elected a President who has demonstrated a clear interest in our country and has connections to Britain, perhaps the Prime Minister should take advantage of our special relationship as we head out of the EU and into the world. The USA imported $54.7 billion in goods from the UK in 2015 alone, and this figure could arguably increase once we have left EU trade barriers behind and are once again in control of our own trade deals.
We can say for certain that as a nation, we will face many new challenges to the way we trade once we have left the EU, but there is also clear optimism for the UK economy, a light at the end of the tunnel some might say, and that light comes in the form of a Commonwealth which is keen to do business with an independent Britain, and a USA led by a President who strongly admires Britain, and our decision to leave a declining EU. Like many others, I am uncertain about the direction our country will be heading in over the next few years. But what I do know is that I, along with 17.4 million people, voted on June 23 2016 for Britain to become a self-governing nation with a global outlook, free from the shackles of the EU. If Theresa May is elected to continue as Prime Minister on June 8 2017, the onus will be on her to deliver a Brexit which reflects this will.