|
A fundamental issue at the heart of the Brexit
trade talks has been the comparison of merits of
trade as an EU member and those under WTO
rules.
In this report, Michael Burrage and Phil Radford
compare UK trade as conducted within these two
trade relationships, in both goods and services,
over the two decades from 1999 to 2018. They
argue, it is emphatically trade with the WTO14
that has created jobs in the UK over these two
decades, not trade with the EU.
They find that trading under WTO rules has been
“a far better option” – our EU relationship was
“an expensive failure”.
By comparing UK trade with the 14 other EU
members in 1999 in relation to that of the UK’s
14 major export markets under WTO rules – a trade
of an approximately similar value – the
researchers find:
- “UK goods exports to the UK’s top 14 WTO
trade partners have grown more than six times
faster than exports to UK’s original 14 EU
partners from 1999.”
- “Hence trade with WTO partners has created
more new jobs in the UK over these two
decades."
- “The striking contrast in export
performance under these two trade relationships
suggests that the advantages of frictionless
trade with the EU and/or the disadvantages of
distant partners incurring tariffs and
non-tariff barriers, have been greatly
exaggerated in UK debate.”
- “Services exports to 14 other EU members
have grown much faster than goods exports, but
at almost exactly the same rate as those to 14
WTO partners over these two decades. This
similarity throws doubt on the benefits of
membership of the Single Market in services,
and even on its existence.”
- “There is no evidence that the 70 trade
agreements in goods negotiated by the EU have
been of any benefit to UK goods exporters over
the past two decades. UK goods exports to the
88 countries and jurisdictions covered by them
have grown at a slightly lower rate than
exports to 117 countries with which the UK
trades under WTO rules.”
- “There is therefore no evidence to show
that the supposed negotiating ‘clout’ of the EU
has ever been used to the benefit of UK goods
or services exports over these decades, though
individual agreements may of course have
deviated from the norm.”
- “Trade under WTO14 terms earned a surplus
of £552.7 billion, while trading with the EU14
was a double failure of near-stagnant growth
and a deficit of £463.3 billion.”
On individual EU agreements, aggregate trade
data shows the real growth rate of UK goods
exports to the 88 countries and jurisdictions
covered by 70 such agreements was slightly below
the real growth of exports to the remaining 117
countries of the world with which the UK trades
under WTO rules.
Further data for 2010-2018 shows services imports
to the EU from the United States and numerous
other countries trading with the EU under WTO
rules have grown faster than those of the UK,
throwing doubt on the idea that UK services
exports have benefited from EU
membership.
Michael Burrage and Phil Radford conclude
that:
“…UK’s future trade policy should on no account
be based on negotiating an agreement with the EU
that tries to maintain a relationship resembling
membership by a commitment to maintain a level
playing field or some other means. Such an
agreement would only make further decades of sub-
and near-zero growth of UK goods exports to
fellow EU members more likely, and the
accumulation of another trillion-pound deficit.”
This report suggests that future UK trade policy
should be built on the proven success of trade
under WTO rules, and wherever possible
negotiating well-targeted agreements to improve
trade with existing WTO partners.
|
