Within the next year, the UK will have had to complete either a free trade deal with the European Union or, failing that, make the preparations to leave the EU on World Trade Organisation (WTO) terms. This is because the EU has decided, over the last few months, to drag its feet in the negotiations and refuse to discuss anything other than its own agenda. That EU agenda is, of course, all about money – as much as they can get out of the UK in return for engaging on post-Brexit trade arrangements. All that nonsense about “sufficient progress” is of course a crude smokescreen to disguise a naked attempt to force us into a major financial commitment with nothing in return. That is why the talks have stalled. Of course, in all negotiations there is a moment like this: it is where each side tries to figure out how far the other side will go, or whether they will capitulate. We are at that point. So whilst the Prime Minister is right to point out that we want a proper free trade deal, she is also right to maintain, as she said in her Lancaster House speech, that no deal is better than a bad deal. Indeed, she has now put flesh on the bones of that statement by directing the Government to make all arrangements to depart from the EU on WTO terms, including investing the money. Yet on the media and in print, we constantly hear only that such an arrangement would be cataclysmic, a cliff edge and a disaster. Yet the truth is far from that. Yes, we want a Free Trade Agreement (FTA) – but not at any price. The alternative to an FTA isn’t nothing, it’s a set of arrangements from within the WTO which will not include a very specific trade deal between the UK and the EU. It does however allow for some flexibility on trade tariffs for a period between us whilst we continue talks, should we choose to do so. As I recall, Pascal Lamy, ex-Director-General of the World Trade Organisation, made the point a few months ago that it might be necessary for the UK to depart on WTO terms with an agreement to zero tariffs and access to services as an FTA could take longer to complete and would be best done after the UK had left. The point he was making in a sense is that no deal becomes a workable WTO pre-FTA deal. So of course the EU and the UK would make arrangements under WTO rules; and what we should be talking about are the benefits of being back in the WTO as a full voting member: lowering tariffs which, in turn, will reduce prices of key commodities – particularly clothing and food – which would benefit the poorest the most. Furthermore, by reducing what the WTO calls the intermediate goods tariff, British manufacturing will become much more competitive. At the same time, the UK could accede to large regional groupings such as NAFTA or the Trans-Pacific Partnership. The UK could, of course, conclude bilateral deals with countries like the US, Australia, Japan and India. And on the global stage, as we take our place as a full voting member of the WTO, we will have the same voting power as the EU and can push our agenda at the WTO to move everyone towards further global trade liberalisation. We are a global leader in trade liberalisation and at long last our voice will be heard again at these councils. And the result will be to make goods cheaper for British households and to create an innovative, dynamic economy. To do this the UK will need to have control of its borders, tariffs and regulatory system on the day of Brexit. If the UK continues in the European regulatory environment or Customs Union, then countries around the world will shrug and say we aren’t serious about free trade. To achieve this there are five key tasks. First, we must have identical regulation on day one of Brexit. Second, our relationship will then be governed based on WTO rules. Simply put, this means that countries have to recognise each others’ systems where the regulatory goal is the same, even if the technical regulation diverges. The WTO ensures that any failure to do so means they can be dragged in front of the WTO for serious sanction. Third, while we will accept the Common External Tariff in the WTO, we will be free to lower tariffs when and where we choose. Fourth, we should immediately lead the WTO in areas like services liberalisation which have seen next to no progress since 1997. Fifth, we must lead in many of the other areas such as trade facilitation, remedies and electronic commerce, the list goes on. This should be our ambition, to lead in global organisations setting key standards. This is why it is vital we now show how optimistic we are about the possibilities available to us. The EU needs to decide and decide soon which arrangement it really wants. Theresa May was right when she said the ball was in their court: it is and they know it. But perhaps most importantly of all, the EU should stop worrying that Brexit will destabilise the whole EU – it won’t. The reason is that the UK has always been a little exceptional; a very uncomfortable bedfellow in the EU. As more and more powers have accrued to Brussels, the UK has become more and more awkward over the years. So now we have voted to Leave, instead of worrying about that and talking nonsense about no special favours for the UK, they should see this as the beginning of a new and better arrangement: one that allows them to go the way they want with deeper and deeper integration, without the carping from the UK, whilst keeping hold of a good friend and ally. For our part, as an island nation and historic global trader, we will want to work closely with our allies and friends but remain free to choose a different course when our interests diverge. That surely is the prize for both sides in these talks.