Delivering a speech in the City of London yesterday, the former EU trade commissioner, Lord Mandelson, warned of the implications for Britain’s ability to trade in favourable terms with the EU in the event of a Brexit.
He explained how our ability to trade freely would be hindered not only in the European Union but also that it would have wider ramifications affecting our position in the global community and could impact our position as the fifth largest economy.
In his speech, Lord Mandelson pointed out that renegotiating the terms of trade would take a significant amount of time to arrange if we voted to leave. “What is at stake are the terms on which we would trade, especially for the financial services that are a vital part of UK trade. And just how long it would take to negotiate these terms,” he told the audience.
He also pointed out that Britain would have no say in the terms and conditions of trade agreements and would have to comply with European terms in order to get full un hindered access. “In Europe we will only get full, unhindered access if we re-accept all the regulatory rules and standards of the Single Market. Period. It’s a binary choice.”
He explained his experience in trade negotiations (he was the EU Commissioner between 2004-2008) meant he understood just how complicated trade policy is, far more so than the ‘Brexiters’ suggest.
Clearly, by exiting Europe Britain would not be in a strong bargaining position, “a politically-charged negotiation of a free trade agreement with the EU would, in reality, be much harder than this argument suggests,” he said.
Lord Mandelson also pointed out that as a result of the major disruption caused by leaving the single market “there would be a loss of the favourable access our exporters have in other parts of the world as a result of our self-exclusion from the EU’s common trade policy and its international trade deals would have more profound consequences than the Brexit argument admits.”
Recovering from these profound consequences would be difficult, Lord Mandelson warned. Developing a new set of British global deals “will be hard to obtain and won’t even come close to compensating for either of these two setbacks”, he said.
He reminded the audience that the European Union is Britain’s largest market, thousands of British SME businesses join cross-border supply chains and production networks. The effect harmonization and standardization has on businesses means impediments, such as tariffs, to doing business are removed.