David Martin MEP

Labour Member of the European Parliament and one of the six MEPs representing Scotland in Brussels and Strasbourg

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Among the plethora of lies, distortions and falsehoods perpetuated by Brexiteers, is the notion that Britain, free from the shackles of the EU will be able to strike trade deals that will dramatically create new opportunities for British companies b opening up markets across the globe.

This scenario is based on a wilful misunderstanding of the opportunities the EU currently provides. First, we are of course leaving a single market of more than half a billion people. No matter what we replace it with, our companies will have diminished access to the EU single market with all the now well-documented consequences of jobs and investment. Less well documented is the fact that we are also leaving trade deals wit around 70 countries covering about 40 per cent of global trade and with the EU poised to ratify deals with Japan, Vietnam and Singapore that figure will rise to close to 50 per cent.

Nevertheless, the world, we are told, is fervently waiting for an unshackled UK in order to throw their markets open to us, and this will more than compensate for any losses and if some countries of the EU are unwilling to participate in this new nirvana then there is always WTO rules to fall back on.

There are a number of problems with this outlook. Trade deals take years, not months to negotiate. Britain will be in a weak negotiating position compared to the EU. Size in such negotiations does matter.

Offering access to a market of 500 million people strengthens you hand compared to offering access to a market of 66 million people.

Brexiteers also place too much hope on the WTO. It does not provide sufficient market access to services, which represents almost 80 per cent of the UK economy and it is also in deep crisis. This weekend 13 ‘like-minded’ trade ministers will meet in Canada to try to save toe organisation from collapse. President Trump has moved the USA beyond hostile rhetoric and blocked the appointments of new judges to the WTO appellate body, which is threatening to paralyse the organisation and prevent it from making decisions. The impasse of the appointment of the appellate body members threatens to bring the whole dispute settlement system to a halt.

The UK’s solution is ironically to ‘cut and paste’ EU trade deals until it can negotiate its own. But given that we cannot begin negotiations until April 2019 and at the moment the transition period is only until the end of 2021 we will not have time for comprehensive trade negotiations.

Negotiation speed will be crucial for us bet we should not forget quality. EU FTAs especially the most recent ones like those with Korea, Canada and Japan, are very ambitious in terms of scope. The first pillar of EU FTAs is about market access. It encompasses tariff liberalisation (Japan for instance, will fully liberalise 97 per cent of EU imports in tariff lines while the remaining ones will be partially liberalised), commitments in several services sectors such as financial and banking sector (very important for the UK), in public procurement and intellectual property rights such as patents and geographical indications.

The second pillar consists of common rules in different areas such as trade defence, competition and transparency. A fundamental component of this pillar is the chapter on sustainable development. It contains provisions on labour rights and environmental protection. FTAs are often deemed to have contributed to the negative effects of globalisation.

However, through FTAs we actually try to govern globalisation by establishing rules our partners have to comply with.

This is to avoid that trade is liberalised to the detriment of works and the environment. As a consequence, recent EU FTAs include commitments on ratification and implementation of ILO core conventions and multilateral environmental treaties such as the Paris Agreement on climate change. They also establish a monitoring mechanism of these provisions by civil society that is particularly useful especially in countries where civil society is less organised and vocal, e.g. Korea, Vietnam and Singapore.

Another fundamental feature of EU FTAs is the safeguard of EU standards. This means that only goods which satisfy EU high health and food safety standards are allowed into the EU market. Therefore not risk of cheap imports of chlorinated chicken or hormone treated beef. The same goes for our public services such as the NHS, which are exempted from services liberalisation

However, my concern is that given our pressing timeline, speed may prevail over quality. Under time pressure the UK might be forced to make further concessions not only on market access but also on worker rights, environmental protection and on our current health and safety standards. I believe there is a real risk of race to the bottom.

Furthermore, not even the smooth roll-over of EU FTAs during the transitional period can be taken for granted.

In fact, some of our trading partners such as Korea with which we signed an FTA in 2010, have already approached the UK asking for further concessions in the exchange of agreeing to the roll-over of the agreement. I believe that more countries will be knocking on our door once Brexit is officially notified to them.

To conclude, Brexiteers who had in mind a glorious future trade policy for Britain will have to face the hard reality. There are not prospects of quick and super advantageous trade deals with any country even less with major economies like the US or China unless we are prepared to sacrifice environmental standards, food safety and foreign contractors being able to bid for and provide NHS and other public services.

As printed in The Scotsman, 25 October 2018

Hard facts among the lies and distortions on UK’s trading future

Among the plethora of lies, distortions and falsehoods perpetuated by Brexiteers, is the notion that Britain, free from the shackles of the EU will be able to strike trade deals...

The updated EU-Mexico trade agreement, reached over the weekend, will result in zero duties on nearly all goods, including agricultural items - yet another reason the UK must remain in the customs union if it leaves the EU, states Scottish Labour MEP David Martin.

Under the agreement, Mexico will remove its high tariffs on many key EU food products such as pasta, chocolate, cheese, apples, pork and poultry, leading to an increase in EU exports of those products; meanwhile a UK parliamentary committee this week warned that without access to European markets, British exports of processed foods such as chocolate, cheese, beef and pork will suffer, while consumers will face higher prices and less choice on supermarket shelves.

The EU-Mexico trade agreement follows the finalising last week of free trade agreements with Japan and Singapore, and illustrates that while UK ministers just talk trade, the EU continues to sign new trade partnerships that will benefit EU consumers and businesses, highlighting once more how vital it is to remain in the customs union.

The agreement also contains binding commitments to protect workers' rights, and protect environmental and climate standards, and is also the first EU trade agreement to tackle corruption, including measures to fight bribery and money laundering.

David Martin MEP, Member of the European Parliament international trade committee, said:

“Tory ministers made big claims at last week’s Commonwealth Summit that they would make progress on new trade deals, on which they’ve once again failed to deliver, while the EU just gets on with it, adding Mexico to Japan and Singapore in the past few days alone.

“And while a Tory minister faces investigation for breaching money-laundering rules, the Mexico deal will be the first EU trade agreement to include measures to prevent and combat corruption, including making bribery a criminal offence for government officials, strengthening internal controls, external auditing and financial reporting, and tackling money laundering.

“Analysts predict Mexico’s economy will be the world´s seventh-largest by 2050, and offers many opportunities for British businesses. It is essential the UK does not leave the customs union and put up trade barriers with the EU and by extension Mexico and every other country the EU has a deal with.”

 

Notes:

1. Factsheet on EU-Mexico trade agreement: http://europa.eu/rapid/press-release_MEMO-18-1447_en.htm

2. Business, energy and industrial strategy committee report on the impact of Brexit on the processed food and drink sector: https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/381/381.pdf

3. Parliament watchdog opens investigation into health secretary’s admission he breached money laundering rules: https://www.theguardian.com/politics/2018/apr/18/jeremy-hunt-investigated-breach-money-laundering-rules-luxury-flats

4. BCC report on Mexico: http://exportbritain.org.uk/market-snapshots/mexico.html

David Martin MEP cites new EU-Mexico trade agreement yet another reason why UK must stay in customs union

The updated EU-Mexico trade agreement, reached over the weekend, will result in zero duties on nearly all goods, including agricultural items - yet another reason the UK must remain in...

As UK ministers continue to struggle to procure post-Brexit trade deals - most notably this week at the Commonwealth Summit - the European Union today formally approved free trade agreements (FTAs) with Japan and Singapore, highlighting once again the benefits of remaining in the EU customs union.

Scottish MEP David Martin, a member of the European Parliament’s international trade committee and rapporteur for the Singapore deal, said:

“While the UK government struggles to get anywhere with its post-Brexit trade planning, the EU continues to make progress on its trade deals. These new free trade agreements with Japan and Singapore will bring great benefits to the EU, and will pave the way for further trade deals with the countries of south-east Asia.

“The European Parliament has been at the forefront of advancing these deals, and we now urge the Council and national governments to conclude their procedures in enough time as to allow us to swiftly ratify the agreements and bring them into force.”

David Martin MEP added:

“For all the rhetoric of Tory ministers at the Commonwealth Summit this week, it is the EU that is actually going ahead and making free trade deals with Commonwealth countries, with the prospect of more to come - just this week Jacinda Ardern held talks with President Macron and Chancellor Merkel about advancing the deal with Australia and New Zealand.

“Liam Fox and David Davis keep claiming they will be able to wrap up trade deals quickly and easily, yet they lack both the EU’s capacity and clout to do so, and if the government persists with its policy of leaving the customs union, British exporters, importers, workers and the whole economy will suffer.”

David Martin MEP: As UK struggles to procure post-Brexit trade deals, EU finalises Japan and Singapore FTAs

As UK ministers continue to struggle to procure post-Brexit trade deals - most notably this week at the Commonwealth Summit - the European Union today formally approved free trade agreements...


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