We have long talked about the negative impact that leaving the Single Market would have on North East business. We send around half of our exports to the EU, that’s £12 billion per year. Any reduction of the ability of North East manufacturers to export to the EU will have a serious impact on our economy. These manufacturers are places like Nissan in Sunderland, Hitachi in County Durham, and the chemicals and process industries on Teesside. They are huge employers in our region and must be listened to on the future of our economy.
This makes a recent statement by the chemical industry on their priorities for Brexit, timely and important. The Chemical Industries Association calls for the UK to “maintain tariff-free access to the Single Market, including EU trade deals” and to “avoid border controls” on products and people. In other words, they call for all the benefits of membership of the Single Market.
It is obvious that without being a member of the Single Market, we simply will not be able to enjoy the same benefits. The Conservatives’ reckless strategy is not only to take us out of the Single Market, but also to take us out of the Customs Union. As current EU members we are part of both of these trading arrangements. Giving up such arrangements makes no sense for the future of our manufacturing industry when these sectors will still be dependent on EU rules that apply to their supply chains. Likewise, having separate standards for the UK and the EU will not benefit exporters wishing to sell to the EU. For example if you make a washing machine that does not meet EU safety standards you cannot expect to sell it there or anywhere else adhering to EU standards. Leaving the Customs Union would probably mean tariffs and certainly mean border checks on our exports to, and imports from, the EU. Therefore, not at all the free trading, unencumbered economy promised by the lead Brexiteers.
But, the Brexiteers claim, we could make up for this with lots of new trade deals with other countries outside of the EU. Minister for International Trade Liam Fox has already been going across the globe trying to sell Britain to whoever he can, even resorting to saying Britain had “shared values” with the brutal regime in the Philippines. Following this logic, we will see a spray of trade deals that will more than make up for leaving the Single Market and the Customs Union in no time. Really? How plausible is this? CETA, the EU’s recently completed trade deal with Canada, took seven years to negotiate. TTIP, the EU’s potential trade deal with the US, looks dead in the water. How quickly can Fox reasonably expect to get a good amount of trade deals done? UK manufacturers cannot wait seven years. Especially when the EU already has trade agreements with 50 countries, as well as making good progress with others.
Even if they could, these trade deals would not be as good as Single Market access. Modern trade is both digital and solid, as well as involving services from skilled staff - meaning time, people and trade are inextricably linked. Having a free trade agreement with a country in a different time zone without any agreements in place regarding visas is of much less value.
So if these free trade deals will take a long time and won’t be as good as what we already have, why are we so keen on them?
North East manufacturing looks to be in for a tough time through the Brexit process no matter what. But endangering local jobs for little more than the vision of Britain heralded only by a right-wing fringe of the Tory Party, is clearly not the right course we should take to mitigate this damage.