E-Paper
Trade deal with India will be hard, ex-British PM Tony Blair warns Brexiteers
According to a report by former British PM Tony Blair’s Intstitute for Globa Change there is nothing to suggest the US, let alone China or India, is minded to facilitate increased services trade by harmonising its regulations with those of the UK, or by agreeing that British firms could sell services in its markets under UK rules.
As manufacturers of cars and other goods warn the Theresa May government of job losses and other impact of Brexit, a report promoted by former prime minister Tony Blair on Thursday flagged the adverse fallout on services exports and cautioned that a trade deal with India will be “hard”.
Blair, a prominent voice opposed to Brexit, resigned as prime minister in 2008. He has since refrained from the cut-and-thrust of politics, but intervenes in debates on key issues such as Brexit through his Institute for Global Change.
The institute's report, highlighting the adverse impact of Brexit on the United Kingdom’s services sector, notes the sector has driven three-fifths of the rise in UK exports over the past 20 years. In 2016, Britain's surplus in services trade came to almost £100 billion.
The report mentions inconsistencies in the claims of pro-Brexit leaders, who often promised easy signing of free trade agreements with major economies such as India after leaving the European Union to compensate for the potential loss of access to the European Single Market.
“Eurosceptics are wrong to argue that the EU will inevitably become a less important market for the UK because the EU economy will grow less rapidly than the US or major emerging markets, such as China and India,” the report said.
It added there is nothing to suggest the US, let alone China or India, is minded to facilitate increased services trade by harmonising its regulations with those of the UK, or by agreeing that British firms could sell services in its markets under UK rules.
“Negotiations with the BRICS countries — Brazil, Russia and India — will be hard. None has shown any interest in opening up its services sector to greater international competition. The only chance the UK has of levering open these markets would be from within the EU, although even this is unlikely to succeed,” the report said.
The claims of pro-Brexit leaders, it added, fundamentally misunderstand the nature of services trade and the difficulties of gaining unimpeded access to services markets of the US, let alone big emerging economies such as China, India or Brazil.
Citing figures to make its case, the report noted that the EU (together with the European Free Trade Association) accounted for 43% of Britain's services exports in 2016, worth around than £110 billion to the UK economy. The Commonwealth accounted for 10% that year, while Brazil, Russia, India and China accounted for only 3.6%.
