Brexit Britain is finally breaking free from the EU’s declining status quo – Telegraph – 01.04.23
The Pacific pact is much more than a trade deal. It is the UK returning to its historical position as Europe’s most global nation. By Professor Robert Tombs Emeritus Professor of French History, University of Cambridge.
A favourite question that Remainers, with an air of triumph, ask people like me is: “What single practical benefit have we gained from Brexit?” Now that we are joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the world’s most dynamic economic grouping, the question is obsolete.
Brexit was never just about trade, but neither was it intended (to borrow another Remainer catchphrase) to make us poorer. The statistics speak for themselves. With British membership, the CPTPP may well now be bigger than the remaining EU, and it is certainly growing faster. So are our exports to it, which even before membership have reached £60 billion a year. And our imports will be cheaper.
But Remainers dislike the CPTPP as a barrier to reintegration into the EU, and so are either ignoring it (as the BBC did on Friday morning in its main news bulletin), searching for downsides, or merely dismissing it as economically negligible. But it is undeniably an opportunity of a kind the EU has long ceased to offer. And unlike the EU, the CPTPP has no ambition to statehood, legal sovereignty, or control of trade policy.
The EU is still a major partner – or rather, the six EU states with which we do significant trade are. After some post-Brexit disruption, levels of trade with them have largely recovered. Nevertheless, our exports to EU countries have been essentially stagnant for 20 years, and as a proportion of total exports have steadily dwindled.
The EU was never a good fit for our exporters, and financial and other services – our special strengths – derived little benefit. Consequently, we had a huge structural trade deficit. In contrast, we already have a trade surplus with the CPTPP.
Britain was not alone in finding the EU disappointing. Not only has southern Europe been blighted for decades, but by some estimates every country joining the EU (including Britain) has experienced a decline in economic growth after accession. Common sense and the broad national interest require us to shift the emphasis of our trade to more dynamic, more profitable, and less restrictive markets.
Those who predicted economic disaster from Brexit insisted that this was impossible. There was even an economic theory – the “gravity model” – used to suggest that we must cling to the EU. This is weak economics, and even worse history. Since the 18th century, Britain has been a pioneer global trader – the most outward-looking of European states. Even in the days of sail, our biggest single 19th-century export was cloth to India.
Victorian living standards were transformed by wheat from North America, beef from Argentina, lamb from New Zealand, butter from Australia. By joining the Common Market in 1973, we shifted away from global trade under the illusion that postwar Europe was permanently booming. Those wishing to push us back towards a Eurocentric trading system are harking back to the illusions of the 1950s.
The CPTPP is a recognition of a rapidly changing political as well as economic world. We are not the only European country to contemplate a “tilt” to the Asia-Pacific, as Asia resumes the position within the global economy that it occupied throughout most of human history. Both Germany and France have signalled the same shift. President Macron observed that “the 20th century was continental … the 21st will be oceanic. That is where the power and geopolitics of tomorrow are being played out.” He has theorised, but Britain has acted.
Our tilt is political and strategic as well as economic. The rise of China was something that the West thought that it could accommodate. But the Chinese regime has chosen an aggressive pursuit of world hegemony, bullying its neighbours, and bribing greedy governments and institutions. It has formed a bizarre alliance of despots with Russia and Iran, threatening the world order.
Britain, with global ties and global interests, cannot ignore this. The Aukus pact with Australia and the United States offers a way of deterring Chinese aggression by controlling its vital sea routes. Our new defence relationship with Japan recalls our first modern alliance, concluded in 1902 to resist Russia. The CPTPP offers an economic buttress against predatory states which parallels the developing security relationship.
Together, they offer the possibility of an alternative trade and security system based around economic and political freedoms. Promiscuous globalisation is finished. We need to form economic as well as security relationships with friendly states. If the world is again to be divided into blocs, we need our own.
At home, these developments give welcome signs that the Government – or some of its members – have a coherent vision, and can at last offer the country a positive post-Brexit narrative: yes, this is what Brexit is for – to permit us to respond to a changing world, rather than sticking to a declining status quo.
Though the idea of Aukus came from Australia, Britain seized it, and credit must go in large part to Ben Wallace and Boris Johnson. Most of the increase in our defence expenditure is going into the submarine programme. It is right not to be diverted by the war in Ukraine into prioritising our army, when we have the two most effective armies on the Continent – the Ukrainian and the Polish – between us and Russia. We need to support them with arms and intelligence, but our primary strategic aim must be to provide sea and air power both in Europe and the Pacific. Here we have begun, but need to do much more.
The CPTPP is the other side of the coin, and the persistence with which it had been pursued and now completed shows what can be done with ambitious and active political leadership. The start was made by Liam Fox, and the deal has been successfully delivered through the determination of Kemi Badenoch, whose stock will certainly rise further.
Are we now out of the Brexit wood? There is still reason to be watchful. The Government and its advisers seem to be pulling in different directions. There are Remainer influences who see alignment with the EU as inevitable. The Windsor Framework gives them ways to keep Britain in the legal grasp of Brussels. There are officials pressing for an EU defence network, though the ineffectiveness of the EU over Ukraine suggests that there is nothing much to attract us.
The Prime Minister seems to have acceded to Emmanuel Macron’s plan for a European Political Community – a French scheme for boosting their own influence that has been kicking around for decades. But Aukus and the CPTPP have set an entirely different trajectory, diverging in fundamental ways from the EU status quo.
So now come the tests. Is the Government going to pursue the downgrading of obsolete EU laws or not? Is it allowing gene editing which the EU bans? How much divergence from EU rules will the CPTPP require? And what happens when such divergence crashes into the Windsor Framework? Is Northern Ireland regarded as expendable? Or is it hoped that its people will vote to scrap the Northern Ireland Protocol?
Criticisms of the CPTPP from Remainers have already started, backed by the usual lobbies. We can expect objections to be raised again to food imports from Canada and Australasia, even though we cannot feed ourselves, we have serious food inflation, and Australian cattle are free-range feeding on grass (I’ve spent time on a Queensland cattle station). Yet the same lobbies see no problem with unlimited subsidised imports of factory-farmed produce from the EU, including “Irish” beef fattened in feeding lots.
Signing trade agreements is excellent, but they can only give opportunities that then have to be seized. We have to be more productive and competitive, and this needs serious “levelling up” through investment in infrastructure and in people through education and training. Yet we continue pouring resources into the insatiable maw of Labour’s white elephant, HS2.
We desperately need a credible energy policy. Is there another country anywhere that would hesitate to back its own manufacturer of modular nuclear reactors, as the Government has so far failed to back Rolls-Royce? The strategic and economic stakes are huge. If we continue to have Europe’s most expensive energy and trust madly optimistic forecasts from green energy campaigners, we can forget about global trade opportunities, however many deals we sign.
But let’s be optimistic. The country seemed rudderless and defeated. Now we have some reason to hope.
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