EU Membership: Economic Benefits

Debate between Lord Lilley and Mark Pritchard

Wednesday 15th June 2016 Commons Chamber

[Mr Lilley]

My hon. Friend is absolutely right. Trade deals take place because they are in the mutual interests of both parties; they are not military conflicts. They take place between two parties, like trade itself.

A very plausible but incorrect argument is that trade agreements always take a long time. When the Secretary of State for Foreign Affairs was asked whether Ministers had done any study of trade agreements, he sidestepped the question. A freedom of information request has actually revealed that neither the Treasury nor the Government have done any study of the trade agreements about which they talk so knowledgeably. However, such studies have been done. I refer to the study by Professor Moser of the Centre of European Union Studies in Salzburg of every single trade agreement in the past 20 years. There are 88 of them. They took an average of 28 months, but the time for each varied greatly. The deals that took a long time were those that involved lots of countries, which certainly concurs with my experience. Of course, by definition any EU treaty involves 28 countries and takes a long time, because all 28 have vetoes. A lot of EU treaties are being held up now, but bilateral treaties take less than that average of 28 months. We should not start deluding people into thinking that it will take a long time to negotiate bilateral deals with countries that already have bilateral deals with Switzerland, for example.

The right hon. Member for Sheffield, Hallam asked rhetorically whether anyone was queueing up for trade deals with us. Well, look not for what they say but what they do. Switzerland has trade deals with countries whose total GDP is four times that of the countries with which the EU has trade deals. Chile has trade deals with countries whose collective GDP is even bigger. Switzerland has a trade deal with China. We are told that it is a bad deal for Switzerland, but clearly the Swiss did not think so. The Swiss published the details of the deal online; Members can look at it themselves. By the time the EU even gets around to negotiating a trade deal with China—which by the way will never succeed because the EU will always insist on human rights terms the Chinese will not accept—the Swiss will have zero tariffs on the vast majority of their exports to China.

[Mark Pritchard]

My right hon. Friend is a distinguished former Trade Secretary so knows what he is on about. We come from different sides of the debate on this issue, but does he—with all his experience and wisdom, and all his contacts both in the Commonwealth and the European Union—accept this point? Brexiteers invoke the Commonwealth leaders as wanting to do business with Britain whether we are in or out of Europe. Is it not the case that Commonwealth leaders want a trade deal with the whole of Europe, not just with the United Kingdom?

[Mr Lilley]

They probably want trade deals with whoever they can negotiate sensible ones with, if they are sensible. They will not say that it is either/or; they will want a trade deal with us, because we are the fifth biggest economy in the world, and they will probably also want a trade deal with the EU. They will find, however, that that deal takes a very long time because all 28 countries will have to agree to it first.

It is often suggested that the EU will get better deals because it is bigger. Actually, not only is it more complicated to do those deals with lots of countries, and so takes longer, but the result is worse and less comprehensive, because there are 28 times as many exceptions and exclusions. They are even less likely to be in the UK’s interests, as we can see from what has happened so far. A third of the trade deals that the EU has negotiated with other countries do not include services. As has been repeatedly stated, services are very important to this country, but they are less important to the rest of the EU, so it does not bother to include them in the deals. Switzerland also attaches great importance to exporting services, so more than 90% of its trade deals include them—as of course would ours if we were independent and making our own deals.