The Guardian view on Brexit and trade: the WTO is not a safety net | Editorial

Tory hardliners’ faith in the World Trade Organization as a viable alternative to EU membership is reckless fantasy

One of the most thoroughly debunked claims made about Brexit during the referendum campaign was that it would be easy. Leave campaigners said the terms of Britain’s future trade with the European Union and the rest of the world would quickly be settled. In July 2016, David Davis forecast that, within two years, the UK would have negotiated a new free trade zone “massively larger than the EU.” Mr Davis resigned as Brexit secretary without seeing that vision enacted.

In July 2017, Liam Fox, the international trade secretary, said that a post-Brexit deal with the EU “should be one of the easiest in human history.” Yet there is zero prospect of such a deal being complete by March next year, when membership of the single market – a trade partnership of unique depth and, very substantially, of British design – expires. Earlier this month, Mr Fox put the chances of the UK failing to strike any kind of deal in advance of that deadline at 60-40. Jeremy Hunt, the foreign secretary, said yesterday that such an outcome would be cause for generations of regret (… for the EU, he clarified under duress).

Yet many Eurosceptic Tory MPs embrace failure of the article 50 process with equanimity or even enthusiasm. They still believe in the essential simplicity of the task. They blame ostensible difficulty on sabotage by unrepentant remainers and on the EU itself.

Next month, hardliners of the European Research Group, chaired by Jacob Rees-Mogg, are due to publish a Brexit plan to rival the “Chequers” blueprint that the prime minister is trying to sell to her party and EU capitals (without great success). One difference between the two camps is that the ERG ascribes no great value to membership of the single market. Another is that it sees no need to honour commitments already made regarding an invisible Irish border. Dispensing with the burden of those obligations allows Brexiters to propose trade arrangements like those between the EU and Canada, or no trade agreement at all.

“No deal” is made to sound palatable by reference to the World Trade Organization. Brexiters speak of “WTO rules” is if they were a simple, universally respected legal safety net that obviates the need for the kind of political entanglement inherent in working through EU institutions. They make it sound like a way to have pristine sovereignty in a globalised economy, quickly, easily and without compromise. Pure fiction. If that were the case, why would nations negotiate free-trade agreements on top of their WTO commitments? Why did Canada want such a deal with the EU? Why do such negotiations take years? Why is no other developed country content trading on WTO rules alone?

The movement of goods, services and people between 21st-century economies is a ferociously complex matter. It is not just a matter of tariffs on widgets coming over the border. The UK has dozens of agreements with non-European countries by virtue of its EU membership. Those cannot be simply copied and pasted into new bilateral treaties with the WTO as the referee, not least because every trading partner and the EU itself first want to know what Britain’s terms of trade will be with the single market.

And while the WTO has arbitration mechanisms, they are slow. Enforcement is weak. The US is a WTO member, but no one imagines that this impedes Donald Trump’s capricious use of sanctions, disturbing global trade and, in the case of the doubling of tariffs on Turkish steel and aluminium, exacerbating a currency crisis in that country.

There are two stubborn truths that hard Brexiters refuse to recognise. First, global trade deals are inseparable from the wider context of international strategic alliances. Second, EU membership amplifies British power in that respect because it combines the increased economic heft of the single market with top-level political collaboration among democratic governments. It is notionally possible to abandon those arrangements and replace them with something yet to be invented. But it is neither wise nor easy. Conservative MPs spreading fantasies about the WTO, whether from ignorance or reckless cynicism, do not make it easier.



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