What you need to know
The negotiations to leave the EU are mired in problems, but there are already upsides emerging. Whether they result in a net benefit is unclear. But as these six points make clear that there are powerful positives to the equation, no matter the end result.
1 We’re getting a crash course in trade law
The Brexit process has been one of frantic education. Politicians, businesses, and the press have been nose-deep in guides to Free Trade Agreements, Rules of Origin, and World Trade Organisation quotas. It’s as if the nation has been asleep, and suddenly woken up. No one has learned more than our chief negotiator, David Davis. Before the vote he was unaware that the EU holds sold competence for trade on behalf of members, believing he could do a deal with “Berlin”.
Now even civil servants are now being given emergency tuition in the fundamentals of international commerce. It’s long overdue.
2 Frictionless borders
The British report on the Northern Irish border problem contained a dynamite idea: the border should stay frictionless, and instead be policed by number plate recognition and an online registration system. If it works it’ll do more than resolve the Irish problem. It could pave the way for frictionless trade across global borders. Today trade between Panama and Guatemala involves inspections and delays. If an automated system works in Ireland it can be rolled out across Africa, Asia, and other territories log-jammed by border controls.
3 Rediscovery of MRAs
A Mutual Recognition Agreement is when two regulatory authorities agree to recognise each other’s verdicts. So if a pharmaceuticals maker in the US gets approval for a drug it can be released in the EU without further testing. MRAs are tragically under-used. But Brexit has lit the blue touch paper. Suddenly the UK, EU, US, and other world economies are rediscovering this incredibly useful tool.
4 ….and AEO status
Another essential acronym! An AEO is Authorised Economic Operator status. It it’s a global scheme which recognises reliable exporters. These companies are viewed as trustworthy, so their goods glide through customs with minimal inspection. AEO status is a great way for companies to improve their exporting. But under EU membership too many British firms felt it wasn’t worth the paperwork. Now AEO status is gaining attention: with the potential to lubricate the way UK firms send goods to multiple destinations worldwide.
5 Zero tariff trade worldwide
Exporting to Brazil incurs horrific penalties. Often as much as the cost of the good. The post-Brexit landscape could look rather different. The UK government is pursuing a philosophy of zero tariffs. The response from counter-parties has been sensational. In September, the Brazil finance minister declared his country was ready to talk free trade as soon as Britain is able. So far, Australia, India, the United States, Canada, New Zealand, China, Chile, Iceland, and at least twenty other nations have expressed a desire for an FTA with Britain. That’s two-thirds of global GDP opening up to British firms.
6 Staff training
Sandwich maker Pret A Manger revealed only one in 50 of its staff is from Britain. The reliance on overseas labour had become staggering across industry, leading to accusations that many British firms use imported talent to avoid the cost of training. That is now changing. Data from the Chartered Institute of Personal and Development shows a surge in training plans amongst members: a quarter have expanded provision, and two-thirds plan to over the next three years. The switch could raise wages, improve the whole culture of investing in people in the UK, and solve our long-standing productivity problem.
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