Brexit showdown: Frost ‘stresses UK’s £2trillion financial muscle’ in stark warning to EU

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Mr Frost, the UK’s chief negotiator, met with counterpart Mr Barnier this week for the seventh round of talks aimed at thrashing out a trade deal before December 31 – the date when the post-Brexit transition period comes to an end. Speaking to earlier this week, former Irish diplomat Ray Bassett suggested an “Anglophone alliance” of the two North American countries and the UK would outclass the EU financially.

The thing is you start with the USA but if you can bolt on Mexico and Canada you definitely end up with a bloc which is bigger than the European Union

Mark Littlewood

He pointed to IMF figures which put the UK’s annual GDP for 2020 at just under £2.25trillion, which when allied to that of Canada and the USA adds up to just over £20.5trillion.

By contrast, the EU’s GDP in 2020 stands at £14.8trillion – but will drop to less than £13trillion without the UK.

Mark Littlewood, director-general of London-based think tank the Institute of Economic Affairs, told “The thing is you start with the USA but if you can bolt on Mexico and Canada you definitely end up with a bloc which is bigger than the European Union.

“The UK is the extra weight – if you bolt on the UK to any trading bloc, that trading bloc grows and obviously we are leaving the EU, and that trading bloc will fall.

“But also, the EU is not the growing part of the global economy.”

Mr Littlewood stressed: “It is still a big part of the global economy and our trade with the EU matters but each year that passes, the proportion of our trade with the EU tends to shrink.

“It won’t fall to zero but it is certainly on a downward trajectory.

“As it becomes easier to transport things and to email things, to WhatsApp across the globe, so it becomes incumbent on us to lift our hats somewhat to countries such as the USA.

“We trade a lot with the USA of course without a trade deal in place and we can contrast that with some of the scare stories about what would happen if we left the EU without a trade deal.”

Looking to the future, Mr Littlewood said: “If we could strike a deal with the USA and NAFTA and I think there is every chance that in the course of time we could join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP11).

“There is a world of possibilities out there.

“In due course of time, we have got to take a look at the Commonwealth.

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“At the time we joined the EU, the argument was the Commonwealth was a shrinking, post-imperial part of the world economy and western Europe was the future.

“That’s been flipped on its head.”

The crunch trade talks have yielded little in the way of progress this week, with each side pointing the finger at the other yesterday after two full days of discussions.

Mr Barnier said: “Those who were hoping for negotiations to move swiftly forward this week will have been disappointed.

“This week, once again, as in the July round, the British negotiators have not shown any real willingness to move forward on issues of fundamental importance for the European Union

“And this despite the flexibility which we have shown over recent months.”

Making use of one of his favourite phrases, he added: “The clock is ticking.”

Mr Frost said a deal on post-Brexit relations was “still possible” and was remained London’s goal but was not easily achievable.

He added: “There are significant areas which remain to be resolved and even where there is a broad understanding between negotiators, there is a lot of detail to work through. Time is short for both sides.”

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