After many years of negotiation, the EU announced this week that it has finalised a trade deal with Japan, the world’s third largest economy.
The deal will remove ‘almost entirely’ any tariffs on trade between that country and the EU bloc.
Unsurprisingly, supporters of remaining in the EU have been gleefully pointing out that such a deal proves that the UK needs to stay in to gain advantages that we will lose upon Brexit.
But let’s look at just what the deal means.
Whilst gaining tariff free access to the Single Market, Japan will retain full border control, make no payments to the EU, will not be subject to rulings from the ECJ or Directives from The Commission and will be able to make its own trade deals in the future. Isn’t this what the EU have been saying is impossible in the ongoing Brexit ‘negotiations’ due to the ‘integrity’ of the Single Market?
If they can give such a deal to Japan, why not to the UK – a country with whom they have far larger trade at the present time? Indeed, Article 8 of The Lisbon Treaty states –
The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness, founded on the values of the Union and characterised by close and peaceful relations based on cooperation.
This deal suggests that Brussels is ignoring its own Articles for political reasons – if they give us the same deal as they have just given Japan then it may encourage other members, many who have grievances with the EU such as Italy, Hungary and Poland, to follow our lead and resign from the organisation.
The more cynical amongst us may conclude that the only reason that the EU have given such a great deal to Japan is as a way of encouraging companies such as Nissan and Toyota an incentive to relocate to the continent post Brexit – no doubt with financial incentives to do so, just as they did when moving the Peugeot plant from Ryton, Coventry, to Slovakia a few years ago.
But do the Remainers have a point about the UK being unable to get a similar deal for itself with Japan? Actually, no.
The Japanese government have already stated that they would look to give a similar deal to the UK if we exit the EU on WTO terms, what is being called a ‘no deal Brexit’. Speaking to BBC Radio 4 back in July , Ambassador Koji Tsuruoka praised the British for being a driving force in the EU negotiations and stated that a bilateral trade deal would be ‘fairly easy’, especially as we already do considerable trade outside the bloc.
Contrast that with the length of time it takes the EU to do deals – usually very many years as the vastly differing needs and priorities of the 28 member states have to be taken in to consideration and thrashed out, leaving many FTA’s unable to be completed.
If you look at the Free Trade Agreements the EU actually has, the only major players involved are South Korea, Canada and Japan with the three largest exporters to the EU (USA, China and Russia) still trading on WTO rules. Indeed, states such as Chile and Singapore have trade deals accounting for a far larger share of world GDP than the EU and both are much smaller economies than the UK, importing way less from Europe than we do to boot.
What this trade deal actually proves is that the EU is not the honest broker they claim in the ongoing UK negotiations – if they were, they would offer us the same deal they have just given Japan and we could have an agreement in days.
We will be much better off doing our own bilateral deals post Brexit as an outward looking, globally trading and independent nation once more, deals that reflect the strengths of our own economy and skill set.
It won’t just be Japan that will enthusiastically engage with us once again when we are freed from the shackles of the EU.
This piece has been syndicated with UKFM News and The Red Pill Factory