Labour MPs challenge Davis on “delusional” trade promise

Over 30 Labour MPs have written to David Davis today [Saturday], challenging him over his pledge last year that by this date the Government would be in the process of concluding negotiations on “a large round of global trade deals with all our most favoured trade partners.”

In July 2016, the Brexit Secretary said that these talks would begin on September 9th 2016, and that “I would expect that the negotiation phase of most of them to be concluded within between 12 and 24 months. So, within two years, before the negotiation with the EU is likely to be complete, and therefore before anything material has changed, we can negotiate a free trade area massively larger than the EU.”

In the letter – coordinated by Labour MP and leading supporter of Open Britain, Chuka Umunna – the 33 MPs challenge Davis to admit that this pledge was “misleading”, and was symptomatic of a Brexit strategy that has been “characterised by delusional wishful thinking.”

Both Davis and International Trade Secretary Liam Fox have admitted that, in reality, Britain will be unable to even start negotiating trade deals until we have left the EU, and that the Government will not be able to implement deals until a transitional period is complete. 

Several of the UK’s “most favoured trade partners” – including Australia, Japan and the United States – have been clear that they cannot negotiate on trade until Britain’s withdrawal from the EU, contrary to the Brexit Secretary’s comments. 

In the letter, the MPs say:

“The Government’s Brexit strategy has for months been characterised by delusional wishful thinking. But probably no pledge you have made is as downright absurd as the promise that Britain would be in the process of concluding trade deals with major economies over a year before we even leave the EU. 

“Your insistence that Britain must leave the Customs Union, and damage our trade with Europe in the process, in order to sign new trade deals with third countries is a dream, not a reality. 

“It is time that you made clear to Parliament and the public that the pledge you made last year was misleading; that it is not Government policy; and that Britain will not be able to implement any new free trade deals in the coming months, or until long after we have left the EU.”

Commenting, Chuka Umunna MP, leading supporter of Open Britain, said:

“We are being taken out of the Single Market and the Customs Union – putting huge parts of our economy at risk – on an illusion that we can quickly sign free trade deals. In reality, as even Ministers have now admitted, this isn’t going to happen. The claims and promises the likes of David Davis made to the British people are simply not deliverable.

“It is vital we stand up for social justice and the economic interests of working people. That means protecting jobs by permanently staying in the Single Market and the Customs Union, not putting them on the line for the sake of extreme Tory ideology.”

/ends 

Notes to editors:

Open Britain have produced a video highlighting David Davis’ broken promises on trade: https://www.youtube.com/watch?v=zGUghxKbdF8&feature=youtu.be

The full letter from the 33 MPs to David Davis is below: 

Dear Secretary of State,

In July last year, after the EU referendum, you wrote: “I would expect the new Prime Minister on September 9th to immediately trigger a large round of global trade deals with all our most favoured trade partners. I would expect that the negotiation phase of most of them to be concluded within between 12 and 24 months. So, within two years, before the negotiation with the EU is likely to be complete, and therefore before anything material has changed, we can negotiate a free trade area massively larger than the EU.”

Given your present position as Secretary of State for Exiting the European Union, such a bold claim requires close scrutiny. Today, it is exactly a year since the date at which you said these negotiations would begin. Given that you said these deals could be concluded “within 12-24 months”, people will rightly expect that at least some of these deals are today either complete, or are significantly along the way towards completion. So, it is fair to examine your pledge in the light of what has happened since. 

The reality is that negotiations on trade deals have not even begun, let alone been concluded. The office of the US Trade Representative has said that trade talks between the UK and US would have to be “consistent with the EU’s common commercial policy” – meaning the UK cannot negotiate bilateral trade deals until it has left the EU. When the Prime Minister visited Tokyo recently, she was told that a deal with Japan cannot be negotiated until the deal between Japan and the EU has been finalised. Australian Prime Minister Malcolm Turnbull has said a trade deal could be reached with Britain “once Brexit is achieved”, and again only after his country has negotiated a free trade agreement with the EU. There has been no sign whatsoever of progress towards deals with China, India or any of the other emerging markets you highlighted as priorities in your article.

Your Cabinet colleague, the Secretary of State for International Trade, admitted just this week that Britain is “simply unable” to negotiate free trade deals at the moment. Last month, you yourself said that Britain will not begin to “negotiate and sign” trade deals until we leave the EU, and that these deals will not be implemented until the transitional phase is complete – potentially years away.

In reality, it is going to take years for Britain to even start seriously negotiating trade agreements, let alone implementing them. And the potential rewards have been massively overstated. The Prime Minister knows this. She said last year, “we export more to Ireland than we do to China, almost twice as much to Belgium as we do to India, and nearly three times as much to Sweden as we do to Brazil. It is not realistic to think we could just replace European trade with these new markets.” She was right. Leaving the Single Market and the Customs Union in an attempt to increase trade is deeply misguided, given that nearly two thirds of UK exports go to either the EU or the 53 countries the EU has an agreement with. Analysis from the National Institute for Economic and Social Research Analysis suggests the estimated increases in trade from free trade agreements with Australia, Brazil, Canada, China, India, Indonesia, New Zealand and the US would be less than 5%. By contrast, leaving the Single Market will be associated with a long-term reduction in total UK trade of at least 22%. 

The Government’s Brexit strategy has for months been characterised by delusional wishful thinking. But probably no pledge you have made is as downright absurd as the promise that Britain would be in the process of concluding trade deals with major economies over a year before we even leave the EU. Your insistence that Britain must leave the Customs Union, and damage our trade with Europe in the process, in order to sign new trade deals with third countries is a dream, not a reality. It is time that you made clear to Parliament and the public that the pledge you made last year was misleading; that it is not Government policy; and that Britain will not be able to implement any new free trade deals in the coming months, or until long after we have left the EU.

Yours sincerely,

Chuka Umunna; Heidi Alexander; Rushanara Ali; Luciana Berger; Ben Bradshaw; Chris Bryant; Ruth Cadbury; Ann Coffey; Neil Coyle; Mary Creagh; Stella Creasy; Stephen Doughty; Maria Eagle; Mike Gapes; Kate Green; Helen Hayes; Darren Jones; Liz Kendall; Stephen Kinnock; Peter Kyle; Chris Leslie; Pat McFadden; Alison McGovern; Catherine McKinnell; Madeleine Moon; Ian Murray; Angela Smith; Gavin Shuker; Tulip Siddiq; Wes Streeting; Stephen Timms; Paul Williams; Phil Wilson. 

David Davis’ quote from his Conservative Home article is here: https://www.conservativehome.com/platform/2016/07/david-davis-trade-deals-tax-cuts-and-taking-time-before-triggering-article-50-a-brexit-economic-strategy-for-britain.html

The comments of the office of the US Trade Representative are here: http://www.politico.eu/article/us-uk-to-start-talks-on-post-brexit-trade-deal-report/

The joint declaration by Theresa May and the Japanese Prime Minister is reported here:https://www.theguardian.com/politics/2017/aug/31/theresa-may-secures-japanese-pledge-on-post-brexit-trade-deal

The comments on a future trade deal by Australia’s Prime Minister, Malcolm Turnbull, are here:

https://www.theguardian.com/politics/2017/jul/10/australia-ready-to-do-post-brexit-trade-deal-but-eu-comes-first  

Liam Fox’s quote about Britain being unable to sign trade deals is here: http://www.politico.eu/article/brexit-trade-negotiations-liam-fox-britain-does-not-have-capacity-to-strike-deals-now/

David Davis said that Britain will only be able to “negotiate and sign” trade deals after we leave the EU:http://www.independent.co.uk/news/uk/politics/david-davis-brexit-trade-deals-leave-eu-customs-union-european-union-brussels-uk-government-a7893756.html

Theresa May’s speech during the EU referendum campaign is here:https://www.conservativehome.com/parliament/2016/04/theresa-mays-speech-on-brexit-full-text.html

Two thirds of British trade is with the EU and the countries with which the EU has a free trade agreement:http://openeurope.org.uk/today/blog/trade-set-to-be-key-battleground-in-eu-referendum/

The NIESR research is here: https://www.niesr.ac.uk/blog/will-new-trade-deals-soften-blow-hard-brexit

Open Democracy’s original story on the funding of the ERG: 

https://www.opendemocracy.net/uk/brexitinc/james-cusick-adam-ramsay-crina-boros/revealed-tory-mps-using-taxpayers-cash-to-fund-sec