Chancellor of the Exchequer Rishi Sunak has said Britain will prosper without a deal with the EU and will not accept one “at any price”, predicting that the Chinese coronavirus will be more economically impactful going into 2021 in any case.
“I think we’re being entirely reasonable with our requests and have been consistent and transparent through this process about what’s important to us,” the finance minister told the BBC, before adding that the United Kingdom “will prosper in any eventuality.”
The British government has been pursuing a relatively straightforward deal with the European Union based on tariff-free trade and mutual recognition of standards — a not unreasonable ambition, given the United Kingdom is the European Union’s single-largest export market, and almost all EU members, taken individually, have a net positive trade balance with Britain.
The European Commission, however, has been demanding terms more lopsided than in any other trade agreement it has stuck to this point, which if accepted would leave the British with arguably less national sovereignty than they had within the bloc.
These include submission to a so-called “level playing field” — British acceptance of regulations and state aid restrictions set by the EU, essentially, with a push for a degree of tax alignment, too — and continued control over Britain’s territorial fishing stocks, the lion’s share of which are currently allocated to EU boats. Brussels also wants the deal to be adjudicated by EU judges.
“In the short-term specifically, and most immediately, it would be preferable to have a deal because it would ease things in the short-term,” Sunak conceded, but stressed that the economic importance of an EU deal should not be exaggerated.
“I think the most important impact on our economy next year is not going to be from that, it’s because of coronavirus,” he said.
“We should not be going for a deal at any price, that would be the wrong thing to do and I think there are things that are important to us in these negotiations, and we’ve been entirely, as I said, reasonable, consistent and transparent.”
There is some indication that there could be benefits to a so-called no-deal Brexit, as well, and even, over the longer term to the coronavirus pandemic, however.
Alvarez & Marsal and research group Retail Economics, for example, have suggested that the introduction of tariffs on EU trade, coupled with uncertainty about global supply chains engendered by the pandemic, could see British factories producing an extra £4.8bn in goods for domestic retailers over the next year — equivalent to doubling the country’s clothing manufacturing industry, according to the Guardian.
The left-wing newspaper points out that retailers such as Asos and Ted Baker have already “re-shored” some of their operations, with many others considering their options.
“Manufacturing in Britain makes business accountable and allows control over each step of the production process,” commented Christopher Nieper, CEO of David Nieper.
“Offshoring manufacturing is essentially offshoring responsibility and indeed pollution. Currently two-thirds of emissions from UK clothing occur overseas. It’s not acceptable to shift the problem to where it’s out of sight and out of mind,” he added.