It sounds odd to say that, but for those Brexiteers who are hoping for a simple free trade agreement with the EU (as opposed to continued membership of the Single Market) should be worried by the collapse of TTIP (the Transatlantic Trade and Investment Partnership).
Sigmar Gabriel, Germany’s Vice Chancellor, reported that disagreements between the EU and the US spiralled out of control. The latter appears to have ‘de facto’ killed off any prospect to create TTIP, the largest bilateral free trade agreement ever.
European officials argued that this deal would have boosted European GDP by 0.5%.
It comes as little surprise that it has collapsed. The agreement was filled with many significant problems. One of the central components of TTIP was to implement an Investor-State Dispute Settlements (ISDS), which would have enabled large companies to sue democratically elected governments. The deal also allowed putting our own NHS at risk of privatisation from foreign companies. It is a relief to many of us that this badly organised trade deal has ended.
Regardless of the details though, the most worrying aspect of these talks failing is that it shows how completely inadequate the EU is at drawing up trade agreements in the first place. The super-bloc has still failed to draw up deals with some of the world’s largest economies. They still have no trading arrangements with Brazil, India and now, the USA. This is an embarrassing feat for this organisation considering Obama claimed in the run-up to the EU Referendum this year that he is only interested in dealing with massive blocs.
Amidst all the infighting at the Brexit department over Fox’s and Davis’ plans, it is still unclear what the term ‘Brexit’ will soon mean to British people when May triggers Article 50. This is why she has called for a Cabinet meeting on Wednesday at Chequers to discuss the Government’s plans for leaving the EU.
It has been widely reported that Hammond wants Britain to retain membership of the Single Market whilst controlling the free movement of workers. Fox and Davis, however, would prefer it if Britain quit the Single Market altogether and had a deal with the EU similar to the Swiss-plus deal the City of London is proposing. A lot of Leavers, myself included, would be delighted if the Government can draw up a deal similar to the latter, but the collapse of TTIP should not provide hardcore Leave supporters with much hope.
Some would argue that the EU is in such a vulnerable position that they will agree to a Swiss-plus style arrangement. This is based on the premise that they have a £61 billion trade deficit with us. Other arguments in favour of this deal include the anxiety German manufacturers have in losing access to British markets.
But given how inadequate the failed project is at drawing up trade deals, Euroscpetics should worry that two years may not be enough to draw up a successful bilateral agreement. One can only hope, for now, that they beg Britain for a Swiss-plus trade agreement provided how vulnerable they are due to their dependence upon British markets. Britain does hold all the cards and we should play them wisely if we are to end membership of both the Single Market and the EU.
So yes, Brexiteers should rejoice that TTIP collapsed. It was a vile trade deal that left some of our most prized institutions vulnerable to privatisation and helped contribute towards a Leave victory. But equally, we should be worried, too. It shows how hopeless the European project is at drawing up trade agreements with the rest of the world. This could dash all hopes of a simple bilateral trade deal between Britain and the EU within a two year period.