The myth of frictionless trade: there is little difference between handling EU-bound freight and that heading elsewhere

The myth of frictionless trade: there is little difference between handling EU-bound freight and that heading elsewhere

The company I founded exports to over 120 countries – including every country in the European Union. You may therefore have expected me to be agitating to scupper Brexit. However, when one runs a family business, one’s vision tends to be long-term rather than short-term.

I strongly back Brexit because it is in the best long-term interests of my country, my company, my employees and myself that we disengage from the structures of the EU. As I said throughout the referendum campaign, there will be bumps in the road – but the fundamental fact is that the EU continues to travel in a direction that is contrary to our best interests and that has only been magnified over the last two and a half years.

Having now studied the Prime Minister’s Withdrawal Agreement, I am extremely disappointed by its complete lack of ambition and the naivety of the approach taken by the her and UK negotiators. It gives far too many hostages to fortune and while ministers interpret it and give assurances this way and that, the passage of time and pressures on future ministers will mean that those assurances stand for naught. The Political Declaration too, lacking any legal force, is not worth the paper it is written on.

The lack of ambition has meant that what could have been a mutually successful agreement building on some of what has been developed over the last 40-odd years has been lost. There have also been a number of fundamental misunderstandings, perhaps deliberate, by the Prime Minister and others at the top of the Government.

The first of those is that we voted Leave just to control immigration, as they seek to tell us. We did not: we voted Leave to take back control of our country and from that control of immigration, fishing, trade etc.

The second is the fixation with frictionless trade – an unattainable fiction. Trade within the EU is not frictionless at the moment, though the points of friction are more regulatory than tariff. The perception amongst politicians is that all trade with countries outside the EU is full of points of friction and that anything other than being in the EU Single Market will lead to long queues of trucks and delays with airfreight etc.

As someone who has spent the last thirty years trading goods with the world, I can say that for an exporter there is little difference in the way we handle freight going to the EU compared to the rest of the world. The United States is our biggest market and we compete directly against US companies in their own market, in part, because we deliver next day to anywhere in the United States by 1pm their time, customs cleared. That, to me, is frictionless trade and it is at a cost that is not dissimilar to the same service to customers in the EU. It is frictionless because the industry has made it so and the same can be done for future trade with the EU, requiring no complex customs unions or being in the Single Market.

Great attention is rightly given to the value of trade to the UK economy but it is vital to remember than only 8 per cent of UK businesses actually trade with the EU – accounting for only 13% of UK GDP. That means that 92% of businesses are having to obey all the Single Market regulations and yet aren’t gaining any benefit from it. The very fact that regulation can be tailored to UK requirements when we Leave the Single Market ought to give a massive boost to the productivity of the 92%. The 8% will still have to meet the regulations pursuant to doing business in the EU in the same way as we have to meet US, Russian or other countries’ regulations when doing business overseas.

Whilst an amicable Withdrawal Agreement would have been my preference, we are where we are. The Prime Minister said many times that no deal – again a misnomer as it would be a WTO deal – would be better than a bad deal. Her deal is a very bad deal and the prospect of a clean Brexit on 29th March 2019 with no hostages to fortune, bringing an end to all the hand wringing and rerunning of the referendum has become a very tantalising prospect.

What is the big deal about No Deal? It gives certainty to business, ends division and brings real purpose to the country. There will be some disruption, but I am sure that within a few weeks – if not days – we would wonder, like with the brouhaha over the Millennium Bug, what all the fuss had been about. Within months the Chancellor’s dour predictions would, like after the referendum, prove to have been pure scaremongering.

Come on, it’s time to roll up our sleeves and go for it.