Brexit: Economic Forecasts

Baroness Kramer Excerpts

Wednesday 24th October 2018 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I am tempted to comment on our shocking growth numbers at 1.2% compared with those of the US and the EU, which are close to 6%. The noble Lord is relying on future free trade agreements. I am shocked to learn how low the utilisation of free trade agreements is. The requirements to qualify for zero tariffs under any existing free trade agreement are so heavy in documentation on rules of origin, certification, dealing with royalties and valuation that the overwhelming majority of companies choose to pay the tariff rather than opt for the zero. In some free trade agreements only 10% of qualified transactions opt for the zero tariff because of the costs; at best it is only 60%. Does that not damn the future trading relationships that he describes?

[Lord Bates]

I point out to the noble Baroness that some of the markets in which we are trading most successfully and where growth is increasing are ones that we do not have a formal free trade agreement with and where we operate on WTO terms. But that is not the objective we are setting for the future; we want a good trade agreement with our friends in the European Union and good free trade agreements that we will be able to negotiate with other countries around the world.