A Government of the 9%?

On Saturday the Tory Tabloids fired a co-ordinated broadside, from their front pages on every news stand in the country, hailing the triumphant achievement of a free trade deal with Japan as the first hurrah of the new “Global Britain” – now almost freed from the EU scaffolding that has been holding it up for the last forty eight years. These were usually accompanied by a picture of Liz Truss looking oddly happy – safe in the knowledge that there is little danger that Japan will be selling us any cheese. (1)

A deal with Japan is an important one. Japan is the world’s fourth largest economy. Only China, the USA and EU are bigger. But trade between it and the UK is actually very small, and not likely to grow by very much as a result of this deal; so maybe the Brexit supporters should put down their Union Jack party poppers and “Rule Britannia” song sheets and contemplate some realities.

Japan accounts for just 1.9% of UK exports, compared to 46% for the EU. So detaching the country from a free trade deal with a bloc that takes nearly half its exports means that there would need to be more than 23 deals with countries like Japan to make up for it (and these deals would have to be on the same lines as the benefits and obligations conferred by EU membership to have a comparable impact).

There are two problems with this. There are no other countries like Japan. Those that come closest – developed, wealthy and large – are mostly in the EU.

Comparison of UK trade with EU, USA and Japan from ONS Pink Book 2019 (2)

Moreover, the trade deal itself is not exactly going to have a dramatic impact. The Department for International Trade projects that it will increase UK GDP by ….wait for it …0.07% …after 15 years. That looks like this.

Impact of Japan Free Trade Deal after 15 years

Blink and you miss it.

The government’s own analysis of the impact of a no deal Brexit – on the other hand -is that, over the same 15 year period, UK GDP would be 7.6% smaller (and with a Free Trade Agreement 4.9% smaller). (3) Clearly, they know what they are doing.

Only 9% of the UK population think that a no deal Brexit would be a “very good outcome” for the UK and another 15% that it would be a “fairly good outcome”. That’s under a quarter of the population. Despite the government. And despite the daily barrages from their cheerleaders in the press. 31% think no deal would be “very bad” and another 19% “fairly bad”. That’s half the population. So, the government – in pushing for no deal – can no longer claim to be representing the 52%, at best the 24% who could put up with it, and most accurately the 9% who are really keen.

What is odd in this situation is that Keir Starmer has just written in the Daily Telegraph that it is time to “move on” from this debate, in which the government is on the rack – in a minority, heading for the economic debacle of no deal, and has just snookered itself by blocking off its preferred alternative deal with the USA by reneging on its agreement with the EU over the North of Ireland; because Congress won’t ratify any deal that messes with the Good Friday Agreement.

Where exactly does he want us to “move on” to?

  1. https://www.youtube.com/watch?v=n_wkO4hk07o
  2. https://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_United_Kingdom
  3. https://blogs.lse.ac.uk/brexit/2020/08/26/a-no-deal-brexit-may-still-be-more-costly-than-covid-19/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s