Why Boris Johnson’s EU deal would actually mean a hard Brexit

The prime minister’s would-be agreement with Brussels will add significant bureaucratic burdens on business, leading to less trade and fewer jobs, Sean O'Grady writes

Boris Johnson is seeking a free trade agreement with the EU (Reuters)

A standard Eurosceptic claim (truthful or not) is that when the UK joined the then European Economic Community in 1973, the British people thought they were joining a free trade area – an economic zone mostly devoid of political and supranational ambitions. The corollary, so it is claimed, is that Boris Johnson is now putting things right by initiating a new – genuine - free trade agreement with the EU.

Whatever the history, this was and is a misreading and misinterpretation of what a free trade area actually is. A free trade agreement is a hard Brexit, which will add significant bureaucratic burdens on business, and inevitably lead to lower competitiveness, less trade, fewer jobs and less investment. It is incompatible with the kind of modern cross-border “just in time” manufacturing techniques that are now essential to competitiveness.

Whatever benefits the freedom to strike trade deals with, say, the US, India and China may one day yield, the short-term cost of loss of market share for UK goods in the EU will be severe. It could conceivably dominate the car industry, aerospace, much of agriculture, pharmaceuticals and the food and drink industry.

In this context a free trade agreement expressly does not mean that the UK retains all of the free frictionless access it currently enjoys. As of now, a lorry loaded with goods made in Yorkshire can travel unimpeded as easily to Burgundy or Bratislava as to Birmingham, and without so much as an email being sent by anyone anywhere about the journey or the manifest. By the same token, any Yorkshire architect could go and design buildings in any part of the EU, and vice versa. No one could stop them.

Under the Johnson Brexit deal, under a free trade agreement, all that goes (after a transition period). The only guaranteed outcome is that the goods made in Yorkshire would be free of any tariffs (import taxes) or quotas on their importation to any of the EU’s 27 remaining member states. That’s it. Some goods now flowing freely would be prohibited if they failed to meet EU type approval, or failed “rules of origin” tests (eg if they were, in reality, say 90 per cent American or Chinese in value) or otherwise were discriminated against by the EU (assuming it is lawful under global trade rules).

The British architect, meanwhile, would have to obtain an additional professional qualification in, say, Ireland to practise across the EU. He or she might lose the right to residence and healthcare in an EU state, or to live in one country and work in another. There would be delays at borders, more red tape, more costs and more incentive for businesses to operate inside the EU and outside the UK rather than attempt the hazardous business of trying to cross so many barriers for their goods and services the pan-European staff who help to make them.

So that is why, in reality, the cuddly-sounding free trade deal would make life far harder for British businesses and workers, and is not at all the equivalent of free access to European markets, as was promised by at least some of the proponents of Leave during the 2016 referendum campaign, and since. It would not be as tough as trading on World Trade Organisation (WTO) terms, as some no-dealers argue for; but in all other respects the UK would be deprived of instant frictionless access to the largest single market for goods and services on the planet, one approximately 10 times larger than the UK. It may or may not be worth it to “take back control” over sovereignty – money, borders, immigration and courts – but that is the essence of the choice.