EU Internal Policy

IAIN DUNCAN-SMITH: We’ll see off Brussels’ naked bid to force the UK into a divorce bill of up to £90billion

Over recent months, Brussels has decided to drag its feet on Brexit negotiations and refuse to discuss anything other than its own agenda.

That agenda is, of course, all about money – extracting as much as it can out of Britain.

All talk about ‘sufficient progress’ in talks is of course a crude smokescreen to disguise a naked attempt to force the UK into a divorce bill – as much as £90billion – with nothing in return. That is why the talks have stalled.

Brussels has decided to drag its feet on Brexit negotiations and refuse to discuss anything other than its own agenda. Pictured: EU chief Brexit negotiator Michel Barnier

Of course, in all negotiations there’s a moment similar to this when each side tries to figure out how far the other will go, or whether they will capitulate.

We’ve now reached that crossroads with Brexit.

So while Theresa May is right to point out that we must have a proper post-Brexit free trade deal with EU countries, she is also right that no deal is better than a bad deal.

Indeed, she has now put flesh on the bones of that statement by making all arrangements for us to depart from the EU on World Trade Organisation terms – which would mean having to pay tariffs on goods and services we export to the EU.

We are constantly told that such an arrangement would be cataclysmic, a cliff edge and a disaster.

Yet the truth is far from that. Yes, we want a free trade agreement – which would replicate most current trade arrangements – but not at any price.

The alternative isn’t nothing, it’s a set of arrangements which will not include a very specific trade deal between the UK and the EU. It would, however, allow for some flexibility on trade tariffs for a period while we continue talks, should we choose to do so. So in truth, it’s not a deal or no deal, it’s a free trade deal or a WTO deal.

Pascal Lamy, ex-director-general of the WTO, indicated a few months ago that it might be necessary for the UK to depart on WTO terms, with an EU/UK agreement for zero tariffs and access to services.

President of the European Council Donald Tusk, (R) and President of the European Commission Jean-Claude Juncker speak during a press conference

This was because a free trade agreement could take longer to complete and would be best done after the UK had left.

So, of course, Britain and the remaining 27 EU countries would make trade arrangements under WTO rules – allowing us to lower tariffs. This, in turn, would reduce prices of key commodities – particularly clothing and food – something that would benefit the poorest the most.

This could also mean that British exports would become much more competitive.

Meanwhile, the UK would strike bilateral deals with non-EU countries such as the US, Australia, Japan and India.

As we took our post-Brexit place as a full voting member of the WTO, we would have the same voting power as the EU and could encourage other countries towards further liberalisation of global trade.

The truth is that Britain is a major driver of trade liberalisation and at long last our individual voice would be heard again.

And the result would be to make goods cheaper for British households and to create an innovative, dynamic economy. To achieve this, Britain would need to have control of its borders, tariffs and regulatory system from the moment of Brexit.

If the UK continued in the European regulatory environment or customs union, then we would suffer because other countries would think we were not serious about free trade.

To achieve our aims, five things are vital.

First, the UK and EU must have identical regulatory systems from day one of Brexit. Second, our relationship must be based on WTO rules. Third, while we would accept the common external tariff on all imports from outside the EU, we would be free to lower tariffs when and where we choose.

Fourth, we should immediately lobby the WTO to liberalise financial and other services – something which has seen little progress for 20 years.

Fifth, Britain must take the lead in many other areas such as electronic commerce.

This should be our ambition, to lead in global organisations setting key standards.

President of the European Council Donald Tusk, (R) and President of the European Commission Jean-Claude Juncker speak during a press conference

This is why it is vital we now show how optimistic we are about the possibilities available to us. For its part, the EU must decide quickly which arrangement for Britain it wants.

Theresa May was right when she said the ball was in Brussels’s court. They certainly know it, too.

But perhaps most important, the EU leaders should stop worrying that Brexit will destabilise the EU – it won’t.

This is because Britain has always been a little exceptional; a very uncomfortable bedfellow in the EU.

As more and more powers have accrued to Brussels, the British government has become increasingly awkward.

So now that 17million have voted to Leave, instead of spouting nonsense about the UK being given no special post-Brexit deal, Brussels negotiators should see this as the beginning of a new and better arrangement.

Crucially, it offers them the chance to move the way they want, with deeper and deeper integration, without the carping from the UK, while keeping hold of a good friend and ally.

For Britain’s part, as an island trading nation, we will want to work closely with our allies and friends but remain free to choose a different course when our interests diverge.

That surely is the prize for both sides in these talks.

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