UK Prime Minister Boris Johnson said the following in a speech today:
We have the opportunity, we have the newly recaptured powers, we know where we want to go, and that is out into the world.
And today in Geneva as our ambassador Julian Braithwaite moves seats in the WTO and takes back control of our tariff schedules, an event in itself that deserves itself to be immortalised in oil - this country is leaving its chrysalis.
We are re-emerging after decades of hibernation as a campaigner for global free trade.
And frankly it is not a moment too soon because the argument for this fundamental liberty is now not being made.
We in the global community are in danger of forgetting the key insight of those great Scottish thinkers, the invisible hand of Adam Smith, and of course David Ricardo’s more subtle but indispensable principle of comparative advantage, which teaches that if countries learn to specialise and exchange then overall wealth will increase and productivity will increase, leading Cobden to conclude that free trade is God’s diplomacy – the only certain way of uniting people in the bonds of peace since the more freely goods cross borders the less likely it is that troops will ever cross borders.
And since these notions were born here in this country, it has been free trade that has done more than any other single economic idea to raise billions out of poverty and incredibly fast.
In 1990 there were 37 percent of the world’s population in absolute poverty - that is now down to less than ten per cent.
And yet my friends, I am here to warn you today that this beneficial magic is fading.
Free trade is being choked and that is no fault of the people, that’s no fault of individual consumers, I am afraid it is the politicians who are failing to lead.
The mercantilists are everywhere, the protectionists are gaining ground.
From Brussels to China to Washington tariffs are being waved around like cudgels even in debates on foreign policy where frankly they have no place - and there is an ever growing proliferation of non-tariff barriers and the resulting tensions are letting the air out of the tyres of the world economy.
World trading volumes are lagging behind global growth.
Trade used to grow at roughly double global GDP – from 1987 to 2007.
Now it barely keeps pace and global growth is itself anaemic and the decline in global poverty is beginning to slow.
And in that context, we are starting to hear some bizarre autarkic rhetoric, when barriers are going up, and when there is a risk that new diseases such as coronavirus will trigger a panic and a desire for market segregation that go beyond what is medically rational to the point of doing real and unnecessary economic damage, then at that moment humanity needs some government somewhere that is willing at least to make the case powerfully for freedom of exchange, some country ready to take off its Clark Kent spectacles and leap into the phone booth and emerge with its cloak flowing as the supercharged champion, of the right of the populations of the earth to buy and sell freely among each other.
And here in Greenwich in the first week of February 2020, I can tell you in all humility that the UK is ready for that role.
We are ready for the great multi-dimensional game of chess in which we engage in more than one negotiation at once and we are limbering up to use nerves and muscles and instincts that this country has not had to use for half a century.
Secretary of State Liz Truss tells me she has the teams in place:
She has the lawyers, top dollar I’ve no doubt, the economists, trade policy experts and if we don’t have enough, or if they don’t perform, believe me we will hire some more.
We will reach out to the rest of the Commonwealth,which now has some of the fastest growing economies in the world.
It was fantastic at the recent Africa summit to see how many wanted to turn that great family of nations into a free trade zone, even if we have to begin with clumps and groups, and we will take these ideas forward at Kigali in June.
We will engage with Japan and the other Trans-Pacific agreement countries, with old friends and partners - Australia, New Zealand, Canada - on whom we deliberately turned our backs in the early 1970s.
We will get going with our friends in America and I share the optimism of Donald Trump and I say to all the naïve and juvenile anti-Americans in this country if there are any – there seem to be some - I say grow up – and get a grip.
The US already buys one fifth of everything we export.
And yes of course there are going to be difficulties:
Our shower trays seem to fall foul of US rules Liz, and if you want to sell insurance across America, Mr Ambassador, you still have to deal with 50 separate regulators, and it is high time I think we all agree that they cut their punitive tariffs on Scotch whisky.
And it goes without saying to all those conspiracy theorists who may still be in existence, all those believers in the Bermuda Triangle or who think that Elvis will be found on Mars, It goes without saying that of course the NHS is not on the table and no we will not accept any diminution in food hygiene or animal welfare standards.
But I must say to the America bashers in this country if there are any that in doing free trade deals we will be governed by science and not by mumbo-jumbo because the potential is enormous.
And of course that brings me to the other area where the potential is great we want a thriving trade and economic relationship with the EU, our historic friend, partners, neighbours and I shall table a parliamentary statement today spelling out our objectives.
And at the outset I wish to reassure our friends about one thing: to lay one myth to rest.
We will not engage in some cut-throat race to the bottom.
We are not leaving the EU to undermine European standards, we will not engage in any kind of dumping whether commercial, or social, or environmental, and don’t just listen to what I say or what we say, look at what we do.
And I say respectfully to our friends that in all those three crucial areas the anxiety should really be on our side of the Channel not yours.
Look at state aid:
France spends twice as much on state aid as the UK, and Germany three times as much, who is using subsidies to undercut? Not the UK.
In fact, the EU has enforced state aid rules against the UK only four times in the last 21 years, compared with 29 enforcement actions against France, 45 against Italy – and 67 against Germany.
The same applies even more emphatically to social policy – and here again I dispel the absurd caricature of Britain as a nation bent on the slash and burn of workers’ rights and environmental protection, as if we are saved from Dickensian squalor only by enlightened EU regulation, as if it was only thanks to Brussels that we are not preparing to send children back up chimneys.
In one field after another, Britain is far ahead.
The EU waited until last year before introducing two weeks of paid paternity leave; we in the UK guaranteed that right nearly two decades ago.
The EU gives employees the right to request flexible working only if they are parents or carers.
The UK provides that right to every employee with more than six months’ service – and they can make the request for any reason.
The EU provides a minimum of 14 weeks paid maternity leave;
Britain offers up to a year, with 39 weeks paid and an option to convert this to shared parental leave. How about that.
The UK has a higher minimum wage than all but three EU member states: in fact six EU countries have no minimum wage at all.
As for the environment, look at animal welfare.
It is not just that we want to go further than the EU in banning live shipment of animals: there are ways in which we already are further ahead.
The UK banned veal crates fully 16 years before the EU.
We are protecting elephants by introducing one of the strictest ivory bans in the world; and the EU, meanwhile, is still in the consultation stage.
And on the great environmental issue of our time, perhaps the greatest issue facing humanity, Britain was the first major economy in the world – let alone the EU – to place upon our own shoulders a legal obligation to be carbon neutral by 2050.
That will put huge strains on our system, it will require full effort and change but we know we can do it.
We have cut our carbon emissions by nearly twice the EU average since 1990, 42 percent and we have cut while the GDP has grown by about 70%; but here is the question: are we going to insist that the EU does everything that we do, as the price of free trade?
Are we? Of course not.
Our legislation to ban single-use plastics goes further and faster than anything proposed by the EU.
Does that mean we will refuse to accept a zero-tariff zero-quota deal with the EU unless the EU agrees to match us every step of the way?
Will we stop Italian cars or German wine from entering this country tariff free, or quota free, unless the EU matches our UK laws on plastic coffee stirrers or maternity leave or unless they match our laws in any other field of policy that might conceivably affect the production of an Alfa Romeo or a bottle of gewurtztraminer?
Will we accuse them of dumping?
Of course not.
Or wanting to dump?
Of course not.
So I hope our friends will understand that what is sauce for the goose is sauce for the gander.
There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules.
The UK will maintain the highest standards in these areas – better, in many respects, than those of the EU – without the compulsion of a treaty.
And it is vital to say this now clearly because we have so often been told that we must choose between full access to the EU market, along with accepting its rules and courts on the Norway model, or a free trade agreement, which opens up markets and avoids the full panoply of EU regulation, like the Canada deal.
Well folks I hope you’ve got the message by now.
We have made our choice: we want a comprehensive free trade agreement, similar to Canada’s.
But in the very unlikely event that we do not succeed, then our trade will have to be based on our existing Withdrawal Agreement with the EU.
The choice is emphatically not “deal or no-deal”.
We have a deal – we’ve done it and yes it did turn out as I prophesized to be oven ready.
The question is whether we agree a trading relationship with the EU comparable to Canada’s – or more like Australia’s.
And I have no doubt that in either case the UK will prosper.
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And I say to our European friends – many of whom I’m delighted to see in this room – we are here as ever, as we have been for decades, for centuries, to support and to help as we always have done for the last hundred years or more and the reason I stress this need for full legal autonomy, the reason we do not seek membership or part membership of the customs union or alignment of any kind, is at least partly that I want this country to be an independent actor and catalyst for free trade across the world.
I was there when they negotiated the Uruguay round.
I saw it completed in Geneva when they gavelled it out -
And it was one of those events that people hardly reported, but it was a fantastically important event in the life of the world.
And it was a critical moment in my view that helped to lead to almost two decades of global growth and confidence.
And then in 2008 we saw the abject failure of the Doha round and though there were many culprits there can be no doubt that both the EU and the US bear a heavy share of the blame for their refusal to compromise on farm subsidies.
And of course while we were in, the voice of the UK was of course muffled.
And as we come out.
I don’t wish to exaggerate our influence or our potential influence, but then nor would I minimise the eagerness of our friends around the world to hear once again our independent voice again in free trade negotiations and our objective is to get things started again not just because it is right for the world, but because of course it is right for Britain because this people’s government believes that the whole country will benefit.
Because it will help our national programme to unite and level up and bring together our whole United Kingdom.
And by expanding our trading relationships to improve the productivity of the entire nation by expanding infrastructure, education and technology you know that our programme is to bring this country together, combine that with greater free trade.
And of course I hope you will see us exporting more fantastic ships built on the Clyde, more wonderful bone china pottery from Northern Ireland, beef from Wales.
The opportunities as I say are extraordinary.
It is an incredible fact that we still sell not one hamburger’s worth of beef to the US, not one kebab’s worth of lamb, and as I speak the people of the US are still surviving without an ounce of Scottish haggis which they continue to ban Mr Ambassador.
In fact I don’t know how they manage Burns Night.
I am glad to say that the Chinese last year signed the first agreement to take British beef after a 20-year ban, but still no lamb, not a joint, not a chop, not a deep frozen moussaka, even though we have the best lamb in the world.
And don’t tell me the issue is distance from China.
Let me ask you a question, see if you’ve been paying attention to this speech the New Zealanders sell huge and growing quantities of lamb to China, as indeed they do to America.
Let me ask you which is closer to Beijing?
Wales or New Zealand? Does anybody know?
Wales of course is the correct answer.
There is no reason why we cannot do much, much better and I am deeply proud of this – I don’t want to do down this country’s global exporting spirit.
We do extraordinary things as I never tire of telling you.
Tea to China, cake to France, TV aerials to South Korea and so on.
Boomerangs to Australia - Nigel Farage to America. Then he came back of course.
But this is the moment for us to think of our past and go up a gear again, to recapture the spirit of those seafaring ancestors immortalised above us whose exploits brought not just riches but something even more important than that – and that was a global perspective.
That is our ambition.
There lies the port, the vessel puffs her sail…the wind sits in the mast.
We are embarked now on a great voyage, a project that no one thought in the international community that this country would have the guts to undertake, but if we are brave and if we truly commit to the logic of our mission - open, outward-looking - generous, welcoming, engaged with the world championing global free trade now when global free trade needs a global champion,
I believe we can make a huge success of this venture, for Britain, for our European friends, and for the world.
I enjoyed a lot of this speech, especially the warnings about protectionism and the part on regulatory issues. On the latter, I would be surprised if the UK used its power over domestic regulation to deregulate much, if at all. There will be some divergence, but it will probably be minimal and shouldn't lead to competitiveness concerns. In my view, any "level playing field" provisions in the UK/EU trade agreement can therefore be hortatory and not too demanding.
But I'm shocked by the notion that economic integration under the eventual UK/EU trade relationship will be at CETA-levels or even less. Perhaps it's just political posturing to say that the UK would accept this, in the hopes of gaining leverage in the regulatory issue negotiations. But if we end up with the limited liberalization that CETA gives, the trade negotiation will have been a huge failure. If the UK and EU were starting from scratch, CETA-level ambition would be fine. But starting from where they are, this is a huge step backwards. Clearly we will be going backwards to some extent, but we don't have to go back that far. Instead of setting defeat as the goal, I suggest the UK and the EU proceed with more ambition on the trade in goods issues. This is how I would approach it:
-- agree at the outset that trade will be duty- and quota-free.
-- try to work out some reasonable rules of origin.
-- develop some "level playing field"/TBT/SPS/mutual recognition/other regulatory rules that make both sides happy, and tie those to removing at least some trade remedy measures (anti-dumping in particular).
