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Most of the time, trade is an arcane subject only of interest to trade specialists and assorted business lobbies — and, of course, the editors of The Economist. But every now and again, it shifts from the far periphery to the molten core of British politics. This happened in the 1840s with the abolition of the Corn Laws, in the 1900s with the advent of imperial preference, in the 1970s with Britain’s entry into the European Common Market and then again in 2016 with Brexit.
For the first six years of this Conservative government, the question of Britain’s withdrawal from the European Union was a hobbyhorse of has-beens and monomaniacs. Prime Minister David Cameron told his party to stop “banging on about Europe.” But Cameron’s decision to concede an “in” or “out” vote to the Eurosceptics in 2016 — a vote that he thought he would easily win — turned trade, in the form of Britain’s trading relationship with its biggest trading partner, into the defining issue of the Conservative’s years in power.
The Brexiteers made a succession of bold promises about Brexit. That it would be the easiest trade deal in history. (The deal was supposedly “oven ready” with Britain holding “all the cards.”) That goods and services would continue to flow easily between Europe and the EU. That Britain would be able to strike innumerable trade deals with the rest of the world. And that a great trading nation would be better off outside the EU than inside. I remember a surreal interview I conducted at the 2018 Conservative Party Conference with Bill Cash, the grand old man of Tory Euroscepticism, in which he explained the many advantages of Brexit, while a group of fishermen serenaded us with sea shanties.
How do these promises stack up?
Far from being “easy,” forging a trade relationship with the EU has proven to be a nightmare. The Brexiteers were infuriatingly vague about what a “no” vote meant. Did it mean continued membership of the single market? Or the Customs Union? They failed to consider the complexities of Northern Ireland — a tortured part of the Britain which has a long land border with the EU. Sorting out these “details” has torn the Conservative government apart.
Withdrawal from the EU has inevitably led to the reintroduction of barriers at the borders: passport inspections, customs checks, import duties, health inspections on plants and animals. The British have to queue at long “other countries” lines at airports. Lorries are held up at Dover and other ports. Businesses have to deal with a lot more form-filling — a solvable problem for big companies but a potentially existential one for smaller ones. An Office for National Statistics (ONS) survey of businesses from early 2024 discovered that around half of exporting firms and two-thirds of importing firms reported extra costs associated with changes in regulations.
Britain has also found it much more difficult to forge trade deals with non-EU countries than it had expected. Most new trade deals simply replicate existing EU arrangements, meaning a great deal of running simply to stay in the same place. The two genuinely new deals, with New Zealand and Australia, are only expected to deliver a tiny boost to trade. The much-vaunted trade deal with the US has eluded Britain despite Donald Trump being in the White House for four of the post-Brexit years (even a cursory look at US trade deals would have told the Brexiteers that, first, such deals take a long time, and second, the US always plays hard-ball).
What about the biggest question of all — boosting the overall British economy? This is surprisingly difficult to answer. Britain didn’t formally leave the EU until the end of January 2020 and even then, it remained in the Customs Union and the Single Market for a “transition period” until the end of 2020. This prolonged leave coincided with a global pandemic that shrunk trade around the world and was then followed by an energy crisis produced by Vladimir Putin’s invasion of Ukraine....
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