The UK government is set on a dangerous course whether it leaves the customs union. But whatever happens industry needs revivingThis time final week,the government seemed to be leaving the door open to a soft Brexit in which the UK remained within a customs union with the EU. That door now seems slammed firmly shut by Downing Street on the grounds that such a lumber would prevent Britain from negotiating its own trade deals.
However foolish the notion of a global Britain enjoying faster growth as a result of being granted access to consumers in China, Brazil, and India and the US once agreements have been struck by the Department for International Trade,it is dear to the hearts of many Conservative Brexiters. The idea that unshackling Britain from a protectionist EU represents a miracle cure for the economy is wrongheaded. The key to exporting more is not an array of trade deals – always assuming they are possible – but having products and services that abroad customers want at a price they are prepared to pay. So much is obvious from the UK’s own trade performance for the latest full year, 2016, and when a deficit of £135bn in goods was partly offset by a surplus of £95bn in services. That’s despite the fact that trade liberalisation is far more advanced for goods than it is for services,and that the EU single market for services is more of an aspiration than a reality.
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Source: theguardian.com