Wednesday 4 January 2017

UK Will Create 400,000 Jobs If It Quits The Customs Union As Part Of Brexit Talk


Britain will become a “beacon of global free trade” and create nearly 400,000 new jobs if it quits the customs union as part of the Brexit negotiations, it has been suggested.

An analysis by Change Britain, a group with the backing of Michael Gove, said that leaving the European Union’s customs union and striking trade agreements with just eight foreign countries will create hundreds of thousands of jobs in manufacturing and service industries.

The customs union allows the free trade of goods between members, but members also have to apply the same tariffs to goods imported from outside the union.

Using European Commission figures on potential trade deals with countries such as India, China, Japan and Canada, the Change Britain analysis found Britain would get nearly £20 billion from extra exports and create 387,580 jobs.

As a member of the EU’s customs union, Britain is not allowed to make its own free trade agreements with non-EU countries and must instead rely on the European Commission to do so.

This is seen as a significant disadvantage after Brexit, as ministers are keen that Britain should be able to set the terms of its own deals.

Boris Johnson, the Foreign Secretary, has said previously that the UK will “probably” have to leave the customs union, although his remarks were later played down by Downing Street.

Mr Gove, the former justice secretary, said: “The UK has a prosperous future ahead of us if we leave the EU’s customs union and become a beacon of global free trade.

“As we strike new trade deals with the growing economies of the 21st century, it will create hundreds of thousands of jobs right across the country, strengthening communities throughout the UK and ensuring that everyone feels the benefits of economic growth.

“But in order to achieve this we must take back control of our trade policy. Only then can we realise the full potential of this great trading nation.”

Lord Jones of Birmingham, a former trade minister under Gordon Brown, added: “The UK has a rich history as a great trading nation. It is therefore no surprise that a number of major economies have already expressed an interest in striking free trade agreements with us.

“The only way we can make the most of these huge opportunities is to leave the EU’s customs union and take back control of our trade policy. This will create hundreds of thousands of new jobs in a range of industries right across the UK. “We can then take our place as one of the global champions of free trade.”

A number of prominent Brexit campaigners are arguing for Britain to cut all ties with the EU. They want Britain to become an independent member of the World Trade Organisation, allowing it to negotiate its own trade deals across the world.

Tim Martin, chairman and founder of the pub group JD Wetherspoon, on Monday told BBC Radio 4’s Today programme that it is a mistake to consider the upcoming Brexit negotiations the “most difficult” or “complex” ever faced by the United Kingdom.

He said the discussions could be summed up in one sentence: “World Trade Organisation rules.”

Mr Martin said that David Davis, the Brexit Secretary, has a straightforward decision to make between adopting WTO rules or signing a free trade agreement with the EU and remaining a part of the customs union.

“All David Davis needs to say is, 'listen, guys, free trade or World Trade Organisation rules?’” he said.

“I don’t mind. We’ll make more money under World Trade Organisation rules because we will benefit from the tariffs.

“What you’ve got to be prepared to do is walk away – and it is perfectly clear that [David] Cameron’s big error, in being a naive sort of guy thinking we could do it through a PR stunt, was he wasn’t prepared to walk away.”



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