There are no “sunny uplands” to Brexit, and the UK should look to the EU’s failed negotiations with India as an example of how incredibly difficult it is going to be to negotiate trade deals with countries around the world once the formal Brexit process has begun, says a British former senior banker and diplomat.
Speaking at length during the Brexit & Global Expansion Summit in London on Monday, Sir Thomas Harris — once the British ambassador to Korea, and former vice chairman of emerging markets-focused bank Standard Chartered — told an audience of business leaders and a handful of journalists that it is “wishful thinking” to believe that the UK will be able to offset the negative economic impact of leaving the European single market by negotiating its own trade deals.
Here is what Harris said:
“There are no sunny uplands on which the UK can escape from the economic consequences of a hard Brexit, by looking to other markets for offsetting benefits.
“Of course bilateral deals will eventually be struck, but we should be under no illusions about how long that will take, or the extent to which those agreements will be able to substitute for access to the EU.”
With the prospect of a “hard Brexit” seemingly growing day-by-day, it looks increasingly likely that Britain will need to negotiate numerous trade deals with countries around the world, but Harris believes this will be an incredibly difficult proposition.
During his appearance, Harris used the example of the EU’s attempts to strike a trade deal with India to show just how hard each individual trade deal will be, saying:
“Some Brexiteers suggest that we can do deals with major Commonwealth countries like India. What they fail to understand is that the EU has been in negotiations with India for the last eight years, and has failed to conclude a deal. And what were the sticking points in those negotiations?
“The sticking points were over trade in services — in accountancy, banking, insurance, and legal services — where the UK was the primary EU demandeur. The Indians were not prepared to table a serious offer on trade in services.
“For the life of me, I cannot see why the Indians would be prepared to offer concessions in services in bilateral talks [with the UK] which they were not prepared to offer in return for access to the EU as a whole.”
Harris’ basic argument is that if it takes a team of specially trained EU negotiators eight years to essentially make no progress with India, what hope does the UK — which has reportedly been struggling to recruit trade negotiation specialists, because there is a widely-shared consensus that Theresa May’s government is a shambles — have.
Harris, who is currently a director of the International Business and Diplomatic Exchange, a London-based organisation that promotes international trade, also argued that there is a fundamental disconnect between the anti-immigration stance of many Brexiteers, and their desire for free trade deals, given that the movement of people is often a key component in trade agreements.
Here is Harris one last time, once again citing the example of India:
“Moreover, what’s the single biggest Indian demand for their trade deals? The single biggest demand is reciprocal access in the EU markets for a very significantly enhanced Mode 4 arrangement. That is for greater access for skilled and technical staff from India.
“Given the anti-immigration stance of the Brexit supporters, it is difficult to see how they will meet these Indian demands, to increase immigration into the UK.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.