Switzerland: Reporter discusses collapse of EU trade talks
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The UK is nearing an agreement in principle on a free trade deal with New Zealand after the sixth round of talks between the two countries. International Trade Secretary Liz Truss said that “great progress” had been made in the most recent talks, which ran from July 19-30. A statement from Ms Truss emphasised the shared values, long history and commitment to free trade between the UK and New Zealand.
She said: “I want a modern agreement that pushes new frontiers in areas like green and digital trade.”
According to City AM, trade between the two countries was worth £2.3bn in 2020.
As well as improving trade, it is also hoped that the deal will speed up the UK’s admission to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which it applied to join in January.
Prime Minister Boris Johnson hopes these trade deals will help cement his vision of a post-Brexit “Global Britain”.
This international activity, Mr Johnson and his team believe, will act as a political ballast for Britain, helping to strengthen its union by showcasing its continued relevance in the world after leaving the bloc.
In 2016 book “Myth and Paradox of the Single Market: How the Trade Benefits of EU Membership Have Been Mis-sold”, leading economist Michael Burrage explained how the free trade agreements concluded by the EU are not comparable to the ones by independent countries.
Mr Burrage claimed Switzerland had none of the “heft” or “clout” or “negotiating leverage that many businesses consider essential in trade negotiations”, but performed considerably better outside the bloc.
The author explained: “In terms of the absolute size of the markets opened, in some unknown manner and degree, to freer trade in services, the EU agreements total $4.8tn.
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“Whereas Swiss FTAs have opened markets of $35.8tn (£26tn) to their services exporters, which is more than seven times larger than those opened by EU negotiators.”
Mr Burrage also noted how the GDP of the countries with an EU agreement in force differed from independent countries.
He said: “Since 1970, the EC has concluded 37 agreements, most of them with small economies, some multi-country.
“The aggregate GDP in 2015 of the 55 countries with an EU agreement in force in January 2014 is $7.7tn (£5.5tn).”
The economist concluded that the results threw serious doubt on CBI and business claims – made prior to the 2016 EU referendum – that ceding responsibility for trade agreements to the EU benefited UK exports.
Taking the example of Switzerland, Mr Burrage claimed the analysis of the growth of UK exports before and after EU trade agreements came into force shows that “in most cases, the post-agreement growth of UK exports has fallen”.
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He also claimed that the growth in UK exports fell in “10 out of 15” cases when new agreements came into force.
However, the author noted how “by contrast, most of Switzerland’s agreements (11 out of 15), have been followed by an increase in the rate of growth of their exports to the partner countries”.
After years of talks, last month, Switzerland announced its decision to scrap efforts aimed at agreeing an overarching treaty with the EU.
Switzerland is not in the bloc but has signed up to many of its policies, such as freedom of movement.
The relationship is currently governed by more than 120 bilateral deals, and a failure to replace them with one framework deal could harm ties.
The European Commission said: “We regret this decision, given the progress that has been made over the last years.”
The EU-Switzerland free trade agreement dates back to 1972.
The European Commission said that without an EU-Swiss framework agreement, modernising that relationship would not be possible.
Existing deals were “not up to speed” and the impact of Switzerland’s decision would have to be analysed, it warned.
The right-wing Swiss People’s Party (SVP) welcomed the breakdown of talks as “a victory for Swiss self-determination”, while trade unions were also pleased as they had been concerned about the impact on wage protection and public services.
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