Jacob Rees-Mogg and his gang want to hoodwink voters with talk of 'clean Brexit' and then push us off the edge of the cliff. This is why we should not fall for it

If we crash out of the EU without a divorce deal, there won’t be a smooth transition to trading on WTO terms. There won’t be any transition at all

Hugo Dixon
Saturday 18 August 2018 10:23
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Can Brexit be reversed?

Hardline Brexiteers are rattled. They know their plan to crash out of the European Union without a deal is unpopular. Voters don’t like the prospect that the M20 could be turned in a lorry park, aeroplanes could be grounded and we might need to stockpile food and drugs in case supplies run out.

That’s why Jacob Rees-Mogg and his gang are trying to rebrand a no-deal Brexit as a “clean Brexit”. They hope to hoodwink voters and thereby persuade them to charge over the abyss.

Rees-Mogg’s European Research Group now reportedly plans to publish its manifesto in advance of the Tory Party conference. Although we don’t know the details, two strikingly similar columns by fellow hardliners Iain Duncan Smith and Peter Lilley, both former Conservative cabinet ministers, give a clear idea of what the arch-Brexiteers are thinking.

The basic idea is to offer the EU a free trade deal similar to the one it has with Canada. If the other countries refuse, we would then trade with the EU on World Trade Organisation (WTO) terms. This was also the line taken by Boris Johnson’s former economics adviser Gerard Lyons in his book, Clean Brexit, published last year.

There are multiple flaws with this argument. The WTO does little to promote trade in services, which make up 80 per cent of our economy, or to remove “non-tariff” barriers, regulations which gum up trade. Meanwhile, Donald Trump, the arch-Brexiteers’ hero, is flexing his muscles by imposing tariffs and becoming increasingly isolationist. In the nightmarish world of might is right, the EU’s clout gives us much more protection than a weak WTO.

It gets worse. If we crash out of the EU without a divorce deal, there won’t be a smooth transition to trading on WTO terms. There won’t be any transition at all. There will just be chaos. The EU is only prepared to give us a 21 month transition (which is far too short anyway) as part of a withdrawal agreement. Two other elements of that deal are that we will pay the EU £39bn, and keep the Irish border open.

If we walk away without paying our bills, as the hardliners suggest, the other countries will be furious. They will pursue us through the courts. There will then be no goodwill to sort out a host of common problems, which extend far beyond trade. It will, for example, be harder to work together to fight cross-border terrorism, tackle infectious diseases and stand up to Vladimir Putin.

The hardliners scream “project fear” – that Brexit does not mean the doomsday scenario I have outlined. They have two main arguments to support this. One is that the other countries will have an incentive to cooperate. While that’s true, tempers on both sides will be flaring. What’s more, the EU believes correctly that we need it more than it needs us – and, as a result, our bravado will probably crack sooner.

Their second argument is that we can avoid chaos at the ports by keeping our borders open and daring the EU to close its own. This is fanciful. The EU’s own laws won’t let it waive through products from what would then be a “third” country. It wouldn’t have any incentive to change those laws either – as sub-standard products such as chlorinated chicken from America or dumped steel from China could then find their way into its market via the UK.

Even if the EU wanted an open border, it wouldn’t be allowed to have one under WTO rules, unless it threw its borders open to the whole world. WTO rules mean we couldn’t avoid border controls just for the EU. And if we decided to flout these rules, we would have no way to check anything coming into the UK. So much for taking back control of our borders.

What’s more, it is not just our trade with the EU that would be stymied. We benefit from trade deals with nearly 70 other countries – including Japan and Canada – by virtue of being an EU member. If we crash out without a withdrawal agreement, all those pacts will come to a sudden stop.

Brexiteers talk airily about cutting new deals around the world. This is nonsense. It’s not just that we will have lost deals with nearly 70 countries and won’t have the EU’s clout as we try to negotiate new ones. It’s also that if we quit the EU without paying our dues, fat chance that other countries will trust us to keep our word when we try to entice them into new trading arrangements.

Brexiteers are putting lipstick on a pig by calling a no-deal Brexit a “clean Brexit”. Voters must not fall for it.

Hugo Dixon is chair of InFacts and a founding member of the People’s Vote campaign

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