The EconomistFebruary 10th 2018 Britain 532 tection for the NHS, for instance, would al-
lay concerns.
But there will be otherflashpoints. A
row last summer over the prospect of im-
porting chicken doused in chlorine from
America was an aperitif. After 45 years
without an independent British trade poli-
cy, political price discovery must be done.
British farmers have not had to flex their
political muscles domestically for decades,
instead relying on their more militant con-
tinental peers. But that may change if
groups like the National Farmers’ Union
feel that farmers’ interests are being sacri-
ficed in favour of industries thatare more
valuable to the exchequer, such as bank-
ing. When it comes to trade, the govern-
ment is yet to understand fully what voters
and businesswill bear. It mustlook be-
yond its internal fight. 7B
REXITEERS dream of freedom from the
European Union’s shackles, imagining
plucky British negotiators forging new
trade deals with America, China and India.
Reality dictates a different set of priorities.
Britain already has around 40 free-trade
agreements through its membership of the
EU. None will survive Brexit automatically.
Deal preservation lacks the glamour of
deal creation, but it isa more urgent task.
Together, these dealscover countries
that receive around 16% of Britain’s exports
and send 6% of its imports. The British gov-
ernment wants to keep all of them, and in-
sists that doing so is no more than a techni-
cal exercise. But rolling over deals that
together took more than 75 years to negoti-
ate will not be easy. As the clock ticks, the
government may be forced to prioritise.
Size matters, and after the EU, Britain’s
top five export partners with which it has
trade deals are Switzerland, Japan, Cana-
da, Singapore and South Korea (see chart).
Agreements with economic tiddlers like
Algeria, Georgia or Tunisia might be of po-
litical importance, but their lapsing would
only squeeze a few British exporters.
Large trade flows could be the result of a
deep, trade-boosting deal. Alternatively,
they could arise from a shallow deal with a
big country that would trade a lot with Brit-
ain even without it. Michael Gasiorek and
Peter Holmes of the UKTrade Policy Obser-
vatory at Sussex University have calculat-
ed that only four of Norway’s top 100
goods imported from Britain would face ta-
riffs in the absence of a deal, compared
with 67 of Turkey’s. On that crude measure,
the latter would seem more important.
However, researchers have constructed
a broader measure of depth, as part of the
Design of Trade Agreements project at-
tached to the World Trade Institute, based
in Bern. They tot up a maximum of seven
key features of a trade deal, including
whether it contains tariffcuts; services lib-
eralisation; investment rules; recognitionof standards; liberalisation of public pro-
curement; rules on competition; and intel-
lectual-property rights. Based on that met-
ric, deeper deals with Canada, South Korea
and Vietnam would be worse to lose than
shallower ones such as that with Turkey,
whose deal with the EUexcludes services.
If British businesses are not exactly
banging down the door to preserve these
deals, says Allie Renison of the Institute of
Directors, a business lobby group, it is
partly because they think that the British
government should prioritise its deal with
the EU. Some sectors are concerned about
particular deals beyond that. Carmakers,
for example, rely on sending car parts to
and from Turkeyunder the customsunion,and saw their exports to South Korea more
than triple in value in the five years after
the deal was applied in 2011. Chemicals ex-
porters, which account for a little under
10% of exports to the EU’s partners, are
keen to keep Britain’s arrangements with
Switzerland and South Korea.
No process will be as straightforward as
simply replacing references to the EUwith
ones to Britain. The arrangements Britain
wants to translate refer to European law
and European content requirements. Ne-
gotiating partners will justifiably grumble
if they find themselves having to adhere to
two sets of standards, or if their car parts
get hit with new tariffs because finished
cars no longer contain enough content
from the deal’sco-signatories.
Britain’s trade negotiators may choose
to prioritise deals that are easier to agree.
All will be difficult without knowing what
Britain’s final relationship with the EUwill
be. Depending on what that is, the trickiest
set to inherit may be the ones with the EU’s
closest trading partners, like Switzerland
and Norway. Their arrangements are “liv-
ing deals”, which secure access to many ar-
eas of the EU’s market by sticking tightly to
its rules. Keeping close trade ties with them
will mean sticking close to the EUtoo.
For now, the British government seems
confident that it will not have to choose.
On January 24th GregHands, the interna-
tional-trade minister, reassured the trade
select committee that of the 70 nations
with which the government had held dis-
cussions, none had any interest in erecting
new trade barriers. But between now and
March 2019, plenty could go wrong. 7Brexit and the EU’s trade dealsSorting the wheat from the chaff
Of Britain’s 40-odd trade agreements through the EU, which should the Brexiteers
prioritise?0.10.51.02.0Sources:
Design of Trade
Agreements
Database; ONS*How many of the
following are covered:
tariff cuts; services;
investment; public
procurement; standards;
competition; intellectual
property rights. Excludes
† ”living trade deals”
Not yet fully implemented“Living trade deals” Deepest deals that
include ongoing changes to align with EU rules
Exports
from
Britain
£bn, 2016It’s a deal
Britain, goods and services exports under current EU free-trade
agreements (excluding Economic Partnership Agreements)Americas
Africa & Middle East AsiaEuropeAlbaniaAlgeriaAndorraBosniaCanada†
8.3Chile
ColombiaCosta RicaEgypt
1.9El SalvadorFaroe Is.GeorgiaGuatemalaHondurasEEAEU-Central AmericaEU-Andean
CommunityIsrael
2.1
Japan†
Jordan 12.5LebanonLiech-
tensteinIcelandMacedoniaMexico
1.9
MoldovaMontenegroMoroccoNicaraguaNorway
5.7PanamaPeru Ecuador San MarinoSerbiaSingapore
7.2South
Korea
6.1Switzerland
21.0TunisiaTurkey
5.7UkraineUnited
States
99.6
No trade
deal with
the EUEuropean
Union
235.8VietnamDepth of trade deal*1234567