Sun Japan Trade Deal Claim NOT CREDIBLE

The old adage that something looking too good to be true probably is too good to be true has been proved true once again, although perhaps inadvertently, by the Murdoch Sun’s non-bullying political editor Tom Newton Dunn. So keen are he and his fellow Murdoch minions to extol the virtues of Brexit that he has failed to do his homework on the kind of story that we will see time and again in the coming months - trade deals.

“BORIS Johnson wants to strike Britain’s first post-Brexit trade deal with Japan, and before the end of the year, in a bid to whip up a bandwagon … Cabinet ministers have agreed to pursue an agreement with Tokyo at lightning speed, The Sun can reveal, with hopes rising among nation’s leaders that it could be wrapped up in the Autumn”. Do go on.

“Having initially been cold about Brexit, Whitehall sources [who?] say the Japanese government have undergone a significant change of heart … Prime Minister Shinzo Abe’s aides have told No10 [says who?] he wants a deal as soon as possible, with insider [who?] saying it will break new ground on the digital and financial services sectors … Insiders [who?] have dubbed it ‘EU Plus Plus’, as it goes further that the EU’s recent deal with Japan”. Plus Plus. Like Combover Crybaby Donald Trump saying Plus Plus Plus.

Which Dominic Cummings is behind this is not known, but Newton Dunn does quote the inevitable “senior Whitehall source” telling “The PM is very keen on the Japan deal now, and think [sic] we can use it as a bit of a trailblazer … It will really help to show Brussels as well as the rest of the world we’re ready to go”. Go where? But there is a problem here.

And that is the mildly inconvenient fact that, whatever the UK negotiates with Japan, it will not be any better than what is already available via EU membership. Worse, should we negotiate a deal which has anything in it that is better than what the Japan-EU deal already contains, then the latter deal must be amended to give that better deal to the EU.

How does this work? Simples. This is down to what is called the “Most Favoured Nation clauses in EU trade agreements”. Here’s how it works at the World Trade Organisation (WTO). You remember the WTO, right? “MFN clauses are designed to prevent a country from discriminating between WTO members, by requiring each country to extend to all other WTO members any preferential treatment granted to another party”.

Got that? Well, “the EU has included MFN clauses in a number of its own free trade agreements”. These “act as safeguards to ensure that preferences granted in one trade agreement are not eroded by one of the parties subsequently granting better treatment to another country in a future trade agreement”. There is more.

“This requirement could limit the EU’s willingness to offer the UK better treatment in a future trade deal if it means that it must also extend the same treatment ‘for free’ to a number of its existing FTA partners … it imposes an even larger constraint on the partners to the FTAs [like Japan], which would be obliged to extend to the EU any more-favourable treatment offered to the UK”. UK gets Plus Plus, EU must also get Plus Plus.

Or, put another way, Newton Dunn has been sold a pup. I’ll just leave that one there.

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