The EU Pushes On Its Free Trade Agenda, But What Will It Mean For Brexit?

18 July 2017

The European Union’s biggest free trade deal yet is to be concluded in the coming months, as negotiations with Japan - the EU’s sixth biggest trading partner - reach agreement in principle. It will remove barriers faced by European firms when exporting to Japan and make it easier for them to compete. This is hugely significant as duties paid by EU companies sum up to €1 billion annually. And it solidifies the EU’s position on the global stage, filling in some of the void left by Donald Trump’s decision to abandon the Trans-Pacific Partnership (TPP) earlier this year.

This is the kind of deal the Tory government has said it will seek to negotiate on its own once we leave the EU. But we should take into account that these deals don’t get finalised overnight. Looking at the EU and Canada deal, it was agreed in principle on that trade deal in October 2013, but the final text was signed three years later.

So what does this mean for a United Kingdom set to leave the EU in less than two years? With Theresa May vowing to leave the Customs Union too, British exporters will most probably not see any of the benefit from decreased tariffs. Worse still, goods produced in the UK could be at a disadvantage on the EU market compared to goods produced in Japan, should we fail to get a good Brexit deal with the EU.

Last week, the German industry warned Britain not to rely on its help in securing a good Brexit deal by being allowed substantial access to the EU’s markets. Protecting the Single Market for the other 27 member states will be a priority for the European Union and rightly so. The desire to remain part of it, at least to some extent, must come from us.

Along with fellow Labour politicians, I signed a letter calling for the UK to remain in the Single Market even after it leaves the EU, because I strongly believe working people across Britain will be worse off. At a regional level, the impact of us leaving the Single Market and of this deal being agreed will be significant.

Through the EU-Japan trade deal, the Japanese will pay zero duties on cars after a transitional period of seven years, but the UK would pay the WTO duty of 10% which means Japanese car companies will see no incentive to continue investing in Britain. Home to the Sunderland Nissan plant, the North East relies on car manufacturing. Nissan themselves reported that leaving the European Union without a trade deal could cost the Sunderland operation half a billion pounds every year and put its future in doubt.

The North East simply cannot afford to lose the car manufacturing giant, who currently exports 70% of the cars it produces to the European market. Not to mention the thousands of jobs it created in Sunderland alone since it opened in 1986.

Don’t get me wrong - there are aspects of the EU-Japan trade deal that I do not agree with. We were promised greater transparency, yet negotiations have been conducted in ‘radio silence’ when what we need is transparent and progressive trade in order to combat public disillusion with politics.

Without such transparency throughout the negotiations, it’s also hard to say at this stage whether the EU-Japan deal would actually be beneficial. We will have to analyse the final deal carefully before we can decide how we will vote on it. Recent EU trade deals, such as the one with Canada, as shown how the European Commission’s agenda could pose a threat to basic democratic principles and be of little help to workers and the environment.

Britain will have a say on this, but it may be the very last time we can influence an EU trade deal. Whether we retain any powers in this respect after 2019 is entirely up to the Brexit deal and the choices made by the government.

Originally posted on HuffPost blogs: http://www.huffingtonpost.co.uk/jude-kirtondarling/free-trade-brexit_b_17509286.html.

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