I quite often listen to James O’Brien on LBC. He can be quite entertaining in spite of his reflex leftism. This morning I heard O’Brien roasting some bloke on Brexit and talking about the EU having 50 free trade agreements (FTAs). He compared it unfavourably with the UK which starts off with none. He quoted Full Fact approvingly (as I would typically).
He did rather immolate the chap he was talking to and made no attempt to be even handed. On close inspection the EU’s list of FTAs doesn’t stand up to scrutiny and I think Full Fact could have done a better job of dissecting the EU’s record on FTAs. First off only 34 of the FTAs are in force. For instance, the long delayed Canadian deal has to wait until March this year for provisional application. Trading books give us a heads up on strategize trading.
Looking down the list four FTAs are with bits of the UK – Isle of Man, Guernsey, Jersey and the Sovereign bases on Cyprus. I think we can replicate those!
Nine of the EU’s FTAs are with bits of EFTA and funny old bits of the EU itself which are all in the customs union: Andorra, Faroe Islands, Iceland, Liechtenstein, Monaco, Norway, San Marino and Switzerland and the EU’s own Overseas Countries and Territories.
Six FTAs are with relatively tiny Balkan states (Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia).
Only seven of the EU’s currently in force FTAs are with large (top 50 by GDP according IMF 2016 data) non-EU/EFTA countries. They are South Korea (11th), Mexico (15th), Turkey (18th), Egypt (33rd), Israel (35th), South Africa (41st) and Chile (45th). Indeed if you add in the five other top 50 non-EU/EFTA countries in various stages of ratification (Canada (10th), Nigeria (26th), Singapore (40th), Colombia (42nd) and Vietnam (48th)) you get 12 countries with a combined GDP of 9% of global GDP.
It is instructive to see where the EU have no trade deals. The list is long:
USA (1st and 25% of global GDP)
China (2nd and 15% of global GDP)
Japan (3rd and 6% of global GDP)
India (7th and 3% of global GDP)
Brazil (9th and 2% of global GDP).
Indeed the EU has no FTA with, and no immediate prospect of achieving one with, some 20 of the 50 largest countries by GDP, which represent 38% of global GDP.
The UK only has to do deals with the EU (23% of global GDP) and the USA (25% of global GDP) to tie up half of the world’s trade. Doing a deal with the EU should be straightforward as we accept the EU’s acquis and there seems to be political support for a deal from the USA.
It is worth considering that free trade with the USA has been a core economic interest for the UK for the length of its 44 year membership of the EC/EU. The fact that there has been no deal demonstrates how lowly British strategic interests are in the priorities of the EU. Consider too that one of the vaunted “Four Freedoms”, a free market in services, another core, strategic economic interest of the UK has not been completed either after 44 years.
There is a n upsurge in people going out to train to trade on foreign exchange, it would seem that we are better off out and those bigging up the EU’s record in pushing forward free trade are ignoring how thin the EU’s record is.