Richard North, 24/03/2017  
 


In an extraordinarily botched effort, even by his standards, Michael Burrage has again produced a Civitas report, this one purporting to show that, for the UK in the forthcoming Brexit negotiations, "it's quite OK to walk away" from a deal. Trading under WTO rules, he asserts, "is an acceptable solution for the UK".

To reach this astonishing conclusion, Burrage has to undergo quite remarkable intellectual contortions, comparing the export performance of countries with bilateral deals to those which, he says, trade only under WTO rules.

The point, of course, is that his selection criterion for the supposed countries trading under WTO rules is flawed. Burrage assumes that any country that does not have what he calls a "bilateral trade treaty" with the EU (and he identifies 111 of them) necessarily trade only under WTO rules.

Manifestly, this is not true, and at two levels. Firstly, Burrage is imprecise in his use of terminology, referring to the term "bilateral trade treaty" when he actually means "regional trade agreement", specific types of trade treaties which parties notify to the WTO. Such treaties involve the reduction of tariffs and quotas and must encompass "substantially all trade".

Secondly, Burrage is working on the false assumption that such trade treaties are a binary issue – that in terms of trade, countries either enjoy regional trade agreements or they have no agreements at all and therefore trade only under WTO rules. In other words, Burrage posits an "all or nothing" scenario.

In fact, according to the EU treaty database, the EU has concluded 928 bilateral and 263 multilateral agreements with countries throughout the world, making 1,191 in total. Of these, 440 are trade agreements or deal with trade-related matters.

Many of these trade or trade-related agreements cover countries which, Burrage asserts, trade with the EU only under WTO rules. One example of this is Brazil which in 1992 signed the Framework Agreement for Cooperation between the European Economic Community and the Federative Republic of Brazil, an agreement which came into force in 1995 with "infinite" duration.

Its objective is to expand and diversify trade between the parties and to step up cooperation in trade, economic matters, science and technology and financial matters.

Described as "very flexible and pragmatic", it replaced the 1982 Agreement, extending cooperation to new areas (social matters, health and intellectual property), providing for broader economic cooperation with the aim of fostering trade to the maximum extent and of promoting industrial cooperation.

It works through an ongoing Joint Committee, composed of representatives of the EC and of the Brazilian government, which has the task of ensuring the proper functioning of the Agreement and of coordinating activities in relation to the aims of the Agreement.

That agreement, though, does not stand alone. Development co-operation issues are dealt with at both the bilateral EU-Brazil and the biregional EU-Mercosur levels. In January 2004 the EC and Brazil also signed an Agreement for scientific and technological cooperation to develop and facilitate cooperative activities in areas of common interest. The EU's political dialogue with Brazil mainly takes place through EU-Mercosur institutional mechanisms.

In addition, Brazil and the EU engage in multilateral fora such as the UN, the EU-Latin America and Caribbean Summit process, and the Rio Group, while the EU also offers tariff and quota concessions on certain products.

What we see here typifies the type of arrangement the EU has with many countries - a composite of specific bilateral treaties, reinforced by some trading concessions, all working alongside multilateral agreements. In all, Brasil has 13 bilateral agreements and 51 multilateral agreements with the EU, making 64 in all – most of which lie outside the WTO and include such organisations as the United Nations and the World Customs Organisation (WCO).

Not by any measure or in any way can Brazil rightly be said to trade with the EU only under WTO rules – yet that is precisely what Burrage claims to be the case.

Further, he makes similar claims with other countries, including the United States, which has 38 EU-US "trade deals", of which at least 20 are bilateral, and China, which has multiple agreements with the EU - 65 over term, including 13 bilateral agreements, ranging from trade and economic co-operation to customs co-operation. None of these are of the simple, tariff reduction variety.

In his 178-page document, therefore, Burrage fails completely to support his thesis. On the basis of the evidence he provides, he cannot rightly argue that the UK will prosper if it trades only under WTO rules with the EU, because the examples he offers do not represent countries which trade only under WTO rules.

This is a man, incidentally, who claims of Flexcit, that we assume that the Single Market has been of very great benefit to the UK economy and then suggests that, if we "really hoped to make a convincing case against trading with the EU under WTO rules", then we "should have examined the countries that have been doing just that over the 23 years of the Single Market".

Perhaps we might have done so, except that there is no developed economy on the planet which trades with the EU only under WTO rules. And that makes Burrage's thesis totally misplaced and completely meaningless. This rather stupid man has proved nothing other than his complete inability to conduct serious research.

In that respect, Pete treats this charlatan with more respect than he deserves, giving him the courtesy of dissecting and analysing his arguments. But this is such low-grade dross that it should not detain any casual reader more than nanoseconds. Civitas should be thoroughly ashamed for adding its name to it – assuming they have the wit to realise what a mess they have spawned.

Speaking of dross, though, we also have Jonathan Portes over on the Guardian, also asserting that "we already trade under WTO rules with the US". Portes is professor of economics and public policy at King's College London, and a senior fellow of the UK in a Changing Europe programme – and thus provides more than adequate confirmation of the fact that "professor" is a job description, not a qualification.

He now adds his own brand of stupidity to that of Matt Ridley, Liam Halligan and many more, including Michael Burrage, none of whom seem to have the brains they were born with.

Such is the obsession of these people with the fictional WTO status, though, that one might be inclined to take a conspiratorial view of their activities – all of them popping up in what looks like a concerted attempt to lodge the WTO option in the minds of the public as a sensible answer to Brexit.

The emergence of the highly organised right wing Tory "Ultras" may have something to do with this, and it has been suggested that they need to clear the decks of any encumbrances with the EU in order to pave the way to closer ties with the United States.

Whatever their motivation, they have a stronger grip on Mrs May than is healthy and, with their distorted claims and cavalier approach to evidence, are poisoning the Brexit debate.

Nevertheless, so convinced are they of their own rectitude that they actually believe their own propaganda. They have lost sight, therefore, of the danger to their own Party if they get their way with the WTO option and trash the economy.

Burrage, who seems to think that Booker writes for The Daily Telegraph - such is his attention to detail – thinks this far-fetched, and accuses Booker of adopting a "hysterical tone".

But since neither he nor any of his WTO Option cronies have been able to make a credible case for their obsession, we have good cause to be worried. And if these people are so desperate to misrepresent the facts, we must be on to something.






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