b'2.2.3. A Hard Break is preferable to being part of the EU Customs UnionThere were once many in WestminsterWe can and, should, look for free trade favouring a Customs Union. A Customsagreements with our friends world-wide, Union is not an option. It is the current EUincluding our European friends. But we Customs Union or nothing. Perhaps theycannot make low tariff deals with them, or confuse a Customs Union with Tariff Freethey with us. It is zero tariffs or nothing. access. The second is a subset of the first but comes without all the strings of a CustomsEven if a bilateral EU-UK trade agreement is Union.not negotiated, leaving the EU would still be preferable to remaining in a Customs Union. Crucially, a Customs Union would deny theThe cost to the UK of belonging to the Single UK the freedom to negotiate tradeMarket is in excess of an equivalent 4% on agreements with third countries (where theour exports. The USA, as a non-member of majority of our exports go) whereas tariff freethe Single Market, pays only 3% on exports access via a UK-EU trade agreement wouldto the EU.allow that freedom. The UK can negotiate tariff free access for most or all tariff lines on a bilateral basis as part of a bilateral UK/EU Trade Agreement. The EU can conduct its own trade agreements within the Customs Union, the UK cannot. 2.2.4. Bigger is not necessarily better in trade negotiationsA common Remainer claim is that the UK willThus smaller countries often find it easier more easily negotiate new trade agreementsto reach trade deals than large trading with non-EU countries if we do it jointly withblocs. Iceland, with a population the size the EU than on our own. The proposition isof Coventry, negotiated a trade deal with that a big trading bloc has inherently greaterChina. The EU does not have a deal with negotiating strength. Ergo, Brexit will weakenChina. the EU slightly and the UK considerably. This belief has of course always been part of theAlso, a large trading bloc has to negotiate raison dtre of the EU.twice. It has to go through a pre-negotiation stage, in order to establish a common However, the proposition is wrong inposition in advance of the main negotiation. principle. Although it is true that a biggerFor the UK, the pre-negotiation stage trading bloc can use its wide market aswith our European partnershas always a negotiating card, this is offset by thebeen tougher than the main negotiation negotiating disadvantage that comes from(for example getting the Uruguay-round asking for more, because it has more exportslaunched). In other words, our main to sell. Where does the balance lie? There iscommercial adversaries are within Europe, no a priori assumption as to which of thesenot beyond it! factors will prevail. It will vary from case to case.A free trade agreement is not necessary (and potentially not helpful) to trade with the EU.65'