Douglas Carswell

17 NOV 2016

Free trade means mutual standards recognition

Brexit entails leaving the single market and the customs union. It's a Remainer fantasy to think otherwise. The real question is what I asked the PM yesterday: will our new trade deals be based on suffocating single-market-style regulation, or mutual standards recognition?

Free trade is a good thing. It has made this country better off for centuries. Specialising in the fields in which we have the greatest competitive advantage, then trading our products for other goods from abroad, makes us much more prosperous than we would otherwise be.

Self-sufficiency always makes countries poorer. Just ask the North Koreans.

But the kind of trade deals we have today – the kind attacked by Donald Trump on the campaign trail – aren't really free-trade deals at all. They don't free trade. They restrict it.

The single market, TTIP and TPP are all permissions-based agreements. Every party has to agree to a set of specific production standards for every sector, which they all have to abide by. Which means manufacturers can only make what the rules allow. Product design is determined by official specifications, instead of consumer demand.

Permissions-based trade is the reason there is so little entrepreneurship in the single market. Endless regulation stifles innovation - not just by raising business costs, but by limiting what can legally be produced.

But trade deals don't have to be like this. You don't need to be in a regulatory union with another country to be able to trade with it.

All you really need is mutual standards recognition. That just means whatever can legally be bought and sold in one country can be legally bought and sold in the other.

Mutual recognition is not a revolutionary concept. Many of our biggest trading partners are developed economies, with similar regulatory systems to ours. It's not as if we can't trust their standards.

The only reason for complicated, drawn-out, permissions-based deals is to make work for bureaucrats. They often do more harm than good. If the government is serious about free trade post-Brexit, mutual standards recognition is the way to go.

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