Remaining tied to EU regulations will make trade deals harder in the world’s fastest-growing markets

Remaining tied to EU regulations will make trade deals harder in the world’s fastest-growing markets

This week we’ve seen the remaining stages of the Trade Bill debated in the House of Commons. However, after the details of the Chequers agreement and the Brexit White Paper, there is growing concern about whether or not the UK will really have the freedom to do deals that will maximise the growth potential within the wider Commonwealth.

Although both documents demonstrate that the Government still wishes to take back control over making international deals, with the Prime Minister assuring readers of the Sun, the Express and the Mail on Sunday last week that the UK will have an independent trade policy, there have been concerns raised over just how much autonomy the Government’s policy gives to securing better deals with countries around the world.

This concern focuses on the so-called ‘common rule book’ that looks to harmonise regulations regarding the trade of goods with the EU. As revealed by ConservativeHome last week, DExEU had been working on another version – a Canadian Plus Plus Plus deal – that if accepted would have allowed mutual recognition between UK law and the EU’s acquis communautaire. This is something that David Davis suggested is still an alternative option in The Times. Unfortunately, it seems that the consequence of the Government’s current plan sees harmonisation with the EU winning the day.

What this would mean for the UK is that EU legislators would be in the driving seat when it comes to setting future standards – i.e. our elected representatives in the UK won’t have the ability to change those standards. This poses a problem, not just for the notion of ‘taking back control’ but for what that ultimately means. If Brexit is to mean Brexit, then the Members of Parliament elected by the people in UK must be able to legislate on their behalf.

The reason for concern is clear: although trade deals could be made, without the ability to diverge there is the potential that goods produced in these fast-growing nations might not be able to be sold in the UK; that the regulations set in Brussels restrict the selling of these goods. As a result, businesses that produce goods within nations around the world may find themselves unable to import into the UK and the trade deals themselves could become defunct.

This would have three main results.

First, it would make signing trade deals harder. One of the main reasons why other countries would want to do a trade deal would be to get better access for their goods. If this access is limited, then many might question why they are bothering.

Secondly, it would make changing the view of some away from thinking the UK is still tied to the EU harder.

Finally, it could make the investment environment more challenging. Ultimately, if you cannot get the product to market, then why invest in the infrastructure?

What it means for the Commonwealth and future investment opportunities is also important to note. As has been well documented, Commonweath countries and other non-EU nations have been experiencing much higher rates of economic growth over the past decade. The UK leaving the EU is a way for its businesses and its people to share in that growth.

We at the Rudolf Wolff Limited’s Commonwealth Infrastructure Fund (CIF) have the aim of helping to develop the Commonwealth for the next generation. We are working with a consortium of British businesses to deliver infrastructure projects that create jobs, opportunities and prosperity for individuals and families around the world via a holistic approach to developing sustainable economic ecosystems.

Rudolf Wolff’s CIF has just signed an Accord with a consortium of British partners and the Republic of Guinea to deliver a programme of infrastructure development with the potential to deliver a tremendous economic impact to the benefit of the people of Guinea. A delegation from Guinea including government ministers is in London this week to talk about the multi-billion pound project that could lead to the creation of an untold number of jobs and opportunities for wealth creation for the people of Guinea off the back of private sector investment into its economy.

This is the true spirit of the Commonwealth, as enshrined in the Charter of the Commonwealth: working together “as a compelling force for good and as an effective network for co-operation and for promoting development.”

There is a concern that the White Paper’s proposals, if enacted, could make it harder to realise the maximum benefits of a diversified international trade policy in promoting these goals. The potential that these fast-growing nations might not be able to trade with the UK as regulations set in Brussels impose tariffs and restrict this trade means that businesses in these nations may find themselves unable to trade directly with the UK.

It may be the case that the appetite for infrastructure investment remains unabated – despite government policy. However, because the UK has tied itself to EU regulations, others would reap the rewards in terms of lower costs for food and new products. Yet it is not just about the lower costs of goods; it’s about the UK missing out on the potential to cooperate and develop new opportunities for peoples around the world due to the bureaucratic chains of Brussels.

There should be a focus on the positive and the potential trade with the rest of the world: free from the restrictions of EU regulation. With this, the UK can contribute directly to the future health and welfare of people globally via increased trade and fulfil the commitment of Commonwealth member states “to the development of free and democratic societies and the promotion of peace and prosperity to improve the lives of all peoples”.