Tuesday , May 28 2024

The EU says it wants free trade – but does it really?

This article was first published here.

It is now three and a half years since Britain left the European Union. Brexit spelled the end of decades of subservience to intervention and bureaucracy from Brussels.

While lots of the benefits are still waiting on the sidelines, delayed by political obstacles, the Covid pandemic and the inflation crisis, there is one area where Global Britain is already making the most of Brexit – free trade.

When it comes to trade policy, the EU is a control freak. It demands EU members are part of its customs union which gives it a blank cheque to decide trade policy on its members’ behalf.

That means they are not able to go out into the world and strike trade deals with other countries, to export goods and services abroad and import things at lower prices and with fewer restrictions, giving consumers more choice and lower prices.

Instead, EU members can’t do anything unless unelected Brussels bureaucrats decide it is in the interests of the whole bloc to agree a new trade policy with another country.

That means any steps towards free trade are excruciatingly slow. In fact, the EU often pushes things in the other direction – with trade becoming less and less free – more often than not because of shameless protectionism or virtue-signalling, rather than what’s best for you and me.

But thanks to Brexit, Britain is freed of those shackles. For the first time in decades, we have been able to go out into the world and trade freely. And that is exactly what we have done.

Trade secretary Kemi Badenoch, continuing the work of previous trade secretaries like Liz Truss and Liam Fox, has announced that Britain will join a trade bloc called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The CPTPP is everything the EU should be but isn’t. it is a community of liberty-minded nations working together to build trade bridges, lower tariffs, deregulate, and make it as easy as possible to buy and sell things around the world, which benefits everyone.

Britain is the first non-founding member to be allowed to join the CPTPP. One of the first benefits of CPTPP membership to be reported was the removal of import tariffs on Malaysian palm oil, which will make a huge difference to struggling businesses, especially now that vegetable oil prices are through the roof thanks to inflation and the war in Ukraine.

Meanwhile, the EU is making it more difficult than ever before for EU companies to buy the palm oil they need. That’s because of environmental virtue-signalling. They say they are harsh on palm oil because they’re worried about deforestation.

In reality, palm oil is much better for the planet than the alternatives. But the EU is sticking to its guns, including defending other products, many of which are suspiciously made in Europe.

The fight against deforestation is real and ongoing but shutting the door on imports for politically convenient reasons, like the EU is doing, is not the way to tackle it.

Recently, there was another big step forward. From now on, palm oil producers and smallholder farmers will have to sign up to something called the MSPO, a certification scheme for verifying that the palm oil was produced in an environmentally sustainable way.

This is something the EU wants, but their ways of doing it were, unsurprisingly, incredibly bureaucratic and impossible to comply with, especially if you’re a poor farmer in Malaysia.

In contrast, the MSPO is designed in such a way that complying with it is cheap and accessible. That means it can actually achieve what the EU wants – ensuring sustainability in the supply chain – without the endless bureaucracy, which would hamstring the palm oil trade.

The MSPO covers 96% of the Malaysian palm oil industry and ought to address all the EU’s environmental concerns. So have they accepted it and embraced palm oil imports? Of course not. The EU is saying it’s their way or the highway.

This is a prime example of what happens when regulators are able to accumulate too much power over trade policy. While the EU is doing this, making life much harder for European consumers and businesses, Britain has reportedly decided to accept the MSPO.

Because we are outside the EU, we are able to sidestep the Brussels madness and embrace real solutions and true free trade. That helps Malaysian farmers, it helps companies like pubs, restaurants and chippies which use palm oil, and it helps you and me as consumers because it means lower prices for us.

Free trade benefits everyone, but the EU insists on digging itself into a hole rather than opening itself up to the world. Thanks to Brexit, we are finally able to do our own thing and trade freely around the world.

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