Brexit hardball: Frost now has upper hand over the EU for simple reason, says economist

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The seventh round of talks between Mr Frost and opposite number Michel Barnier got underway this week – and Mark Littlewood, director-general of London-based think tank the Institute of Economic Affairs (IEA) believes the UK will now go on the offensive. Mr Littlewood suggested there had been a dramatic change of momentum since Boris Johnson replaced Theresa May as Prime Minister which was now reflected in the team negotiating on the UK’s behalf.

I think there is an opportunity for us to play hardball

Mark Littlewood

He explained: “I think there is an opportunity for us to play hardball.

“And the reason I say that is in essence the European Union’s only trade negotiation at the moment of any real importance is with the United Kingdom.

“We are now at last playing the multi-dimensional chess we should have been playing from the outset.

“Unfortunately under the previous Prime Minister all the focus was on a deal with the EU.”

Mr Littlewood added: “Now I am not saying a deal with the EU does not matter – our trade with the EU does matter.

“But we have now opened up flanks to try and negotiate a trade deal with the United States of America.

“We will probably have to wait until the conclusion of the Presidential election to return to that.

“But crucial will be what is called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP11), which is a bloc of 11 countries with Japan and various others in it.

“And each of these blocs, the USA, the TPP11, and the EU, amounts to around 15 percent of the world’s economy.

“So what we lose on the swings, we might well win on the roundabouts.”

Mr Littlewood said the strategy was essentially one of Britain hedging its bets and keeping its options open, as opposed to putting all its eggs in one basket.

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He added: “Obviously if none of these arrangements came off then our terms of trade with the rest of the world would not be as beneficial.

“But we are at last realising that if we make an agreement that shackles us to the EU, that makes trying to negotiate with the other countries, the 92 percent of human beings who don’t live in the EU, considerably more difficult.”

Signing up to the EU “rulebook” would mean less leeway when it came to negotiations with other countries such as the US and Japan for example, and Mr Littlewood said it was highly doubtful therefore that Mr Frost would be prepared to countenance any commitments which shackled Britain in any way.

He added: “I think this is where David Frost is in a strong position, because you have got Liz Truss going round the world opening up new flanks.

“What Frost can say is look we want a decent trade with the EU, we want zero tariffs, we want no barriers, but it is not the be all and end all.

“We have other fish to fry, we have other negotiations going on and it will be as much to the EU’s disadvantage as ours if an agreement is not met.”

A agreement was there to be had, Mr Littlewood stressed.

He explained: “I still think a deal is eminently possible is these deals are always done at one minute to midnight.

“Actually they tend to be done at 3.30am – whatever the available time is to the EU, they use it and then some.

“So I think it would have been a near-miracle if we’d got this packaged up and wrapped up with a bow on top by now.”

Southampton fan Mr Littlewood added: “David Frost is saying we can get a deal by September – maybe we can get a skeleton deal in September but I think this will go right into Fergie time and the last kick of the game.

“But we are approaching this in a stronger position than we previously were.

“If our negotiations with the TPP11 were so successful that we ended up becoming a full-blown member of it that bloc would end up as being a bigger trading bloc than the EU.

“That could well happen in the next two or three years.

“Despite the global recession, despite the pandemic, from the specific position of our future trading arrangements, we are at last in a stronger negotiating position because we are acting multilaterally rather than putting 110 percent of our focus on the EU.”

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