The UK Treasury’s Trade and Investment department have unveiled an ambitious task to secure a trade deal by the end of the year. These trade and investment officials are behind an ambitious plan to achieve this. They are also proposing that by 2020 all the UK’s products and services have been sold on all of the EU’s markets. This ambitious plan must now meet the scepticism of the wider public.
The government’s plan involves a new trade agreement, with every country, as soon as possible, creating a new internal market. The key elements are the protection of the intellectual property of the manufacturers and importers and the right to regulate border posts.
One problem is that the EU will not be at the same stage of development, which means the agreement will be seen as a start, not a finish. For instance, the EU has not established itself as a country at the “level of development” of the UK.
Many campaigners think that the UK must start from scratch, this might not be so difficult when one considers that the EU has all the best aspects of the US or the Asian economies, such as intellectual property protection and new markets, and a reliable economy with low unemployment. Other differences are that UK manufactures are very expensive to manufacture compared to the Asian or the US, and the quality of the products is often less.
It’s for these reasons that many think that the UK should apply for a similar deal with the USA. Even if this happens, the UK could end up still in the slow lane. Much in the same way as when the UK joined the European Economic Community, although the partners have more experience, the UK is not “leading the pack” as such.
The British think that the two countries are unlikely to achieve an EU-UK treaty, which will make it necessary for the UK to “go global” if the Euro-Union ends. Such an outcome could hamper the UK’s industrial development and lead to restrictions on foreign investment.
A separate trade deal with the EU will be not as complex as the one currently with the US. It will also need to deal with customs, regulations and taxes, although the UK is a big, trading nation, therefore any compromise must take into account the actual trade that the UK trades with the EU.
This means that the UK is likely to have to have some laws changed to reflect the US, for example. One example is the requirement that the UK must accept EU legislation relating to many areas, including environmental regulations, taxation, alcohol advertising, and testing procedures. It is difficult to determine the exact number of changes that the EU may require, but it may be a lot.
When the UK was a member of the European Economic Community, it had many advantages for its citizens. The UK had some of the lowest taxes in the world, but these were lowered slightly to avoid the prospect of the tax power being transferred to a third party country.
This problem now has to be addressed in the new UK-EU trade and investment agreement. It will be possible to state that the US will no longer have to have its own VAT, trade tariffs and customs regulations.
If the United Kingdom is to have any chance of reaching a deal, there will have to be a major transformation of the domestic political scene. The leaders will have to be given the opportunity to make their case for free trade.