Three years ago those who wanted to leave the EU never discussed what is now called a Hard Brexit. That is leaving the EU on World Trade Organisation rules. They discussed Norway. And Switzerland. And Iceland. But never not doing a deal. Owen Patterson, who was always been at the extreme end of the Leave spectrum, dismissed the idea of using WTO rules as absurd, and something no one would want. And yet, now it’s apparently what large parts of the country wish for. And they call it a Hard Brexit. And free trade Brexit. And they imply that means there are no rules. But there are. And they are deeply disadvantageous to the people of the UK.
Those rules, that are used by only a handful of small countries around the world, require that the UK set tariff rates. The government has already indicated its preferred rates, which are usually nothing. As a result the protection that UK steel, ceramics, tyres and glass currently enjoy against dumped Chinese products will disappear. And so will jobs, of course.
At the same time exporting will be harder. UK exporters will have to prove the origin of all the goods they sell every time they export. This is costly. And time-consuming. And not necessarily trusted. Buyers will go elsewhere.
And unless we have a border in Northern Ireland where this is checked the UK effectively exits from trade because it will be unable to meet WTO rules.
And buyers will also go elsewhere because EU countries will impose tariffs on imports from the UK to be consistent, and trade law and practice requires consistency, so they’ll have to. This is not about being penal. It will be about being fair, and that is required of them.
Exporting services will be much harder to. The single market provides rules to provide consistent quality in service supply, which is vital to the UK where service exports are significant. This is not true under WTO rules. This is going to hit the City and sectors like insurance very hard.
There are other changes. The WTO does not protect employee rights in the way the EU does. Nor does it protect the environment. Whilst WTO rules on state aid provide far less protection on issues like defending the NHS from competition and break up. EU rules to prevent tax abuse would go. As would cooperation on simply enforcing tax law, on which the EU has been a pioneer. And cooperation on crime goes too. Whilst government services would always have to go to the cheapest bidder. There could be no bias towards local suppliers. Or those who offer training, or who protect the environment. Let alone against those who abuse tax havens. Price will be all.
Hard Brexit is then not about giving up rules. It’s all about adopting different rules. Rules that cost jobs. And impose cost on business. And harm their cash flows, which could send many under. And which means we breach our legal obligations in Ireland, making new deals with anyone nigh on impossible. Whilst protecting UK public services from abuse will be exceptionally hard. And enforcing the law will be much more difficult. And this summary only scratches the surface of the issues. This is not project fear. It’s the reality of a ruinously harmful proposal that only the insane, the uninformed and the stupidly reckless would promote.
So here are then questions for Brexiteers, from wherever they come on the political spectrum:
1) How will you protect UK business from dumping?
2) What will you do for those who lose their jobs because the businesses that employ them are undermined by WTO rules?
3) What will you do on the Northern Ireland border?
4) How will you protect exporters who will have massive increases in their costs?
5) How will you support businesses that suffer cash flow harm from the delays WTO rules will impose?
6) What measures are you taking to ensure the NHS does not come to harm from WTO rules?
7) How will you ensure that the quality of government services is not undermined by WTO rules on government procurement that requires that cheapest products be used?
8) What steps will you take to protect the environment when WTO rules threaten it?
9) How will you stop the tax abuse that EU rules help beat and which WTO rules ignore?
10) How will you support businesses that face crises in the UK, as steel and parts of the railway industry have done, when WTO rules prevent that?