There’s a trick to announcing trade agreements like the one unveiled by the prime minister on Monday: pluck out a big-sounding number and release it to the public with zero context in an effort to make this sound very impressive indeed.
That’s what Donald Trump did last week when he was in Saudi Arabia and it’s what Sir Keir Starmer did on Monday, promising the agreement with the EU should generate a whopping £9bn in gross domestic product (GDP) for the UK.
Naturally, when you squint a little closer, that figure gets considerably less impressive than it first seems.
After all, by 2040 – the year the government was referring to – £9bn will equate to roughly 0.2 percent of GDP, only a tiny fraction of the negative impact most economists have estimated Brexit will have on the economy (the OBR puts it at -4 percent).
Whether those negative estimates are any more reliable than the one the prime minister came up with on Monday is a debate for another day, but anyway, this is one of those cases where the numbers are perhaps somewhat less meaningful than the politics.
For one thing, even that seemingly small 0.2 percent of GDP is actually bigger than the calculated impact of the India trade deal unveiled earlier this month (and almost certainly bigger than any other trade deal signed since Brexit).
That’s because a small percentage of a big number is still a relatively big number, and Britain trades more with its neighbours than any other country in the world.
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Anyway, more consequential than any numbers is the fact that this government has committed to something its predecessors refused to countenance: aligning certain of its regulations (most notably food standards) with the European Union.
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Previous Conservative governments all shied away from doing so – for fear, they said, of undermining their ability to seek free trade deals with other countries that would insist on greater access to their food markets.
Countries like the US and India.
That Starmer has managed to seal agreements with those two countries while still agreeing to align food standards with the EU is certainly a diplomatic coup. But it carries with it certain profound consequences.
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For one thing, it more or less rules out the prospects of Britain ever sealing a proper comprehensive trade deal with the US (as opposed to the rather limited agreements it has actually signed).
It will push Britain over a regulatory Rubicon that was, up until now, seen as politically untenable.
If you are one of those people who believe that, like it or not, Britain is fated to edge gradually closer to Europe, ending up decades hence with what one might describe as a “Swiss-style deal” with Europe, then Monday’s events will have given you no reason to challenge your assumption.
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What, after all, is a Swiss-style deal but a constellation of complex bilateral agreements with Europe that fall short of single market or customs union membership, while locking the parties into a sort of uncomfortable regulatory convergence?
No one in government will ever describe it this way, of course.
But while Monday’s agreement doesn’t amount to much in statistical terms, it nonetheless tips Britain down a path towards a Swiss-style arrangement – with all that goes with it.
That certainly is a big deal.
