I am grateful to my hon. Friend for her helpful intervention. As she will know, the Labour position is that we want to leave all possibilities open. We think that is an appropriate approach to take. [Interruption.] I see Government Members laughing at that. We are in a negotiation where it is surely absolutely essential that we put Britain’s interest first and that means not taking options off the table. Sadly, the Government did that very early on and caused an enormous amount of bad will from our other EU partners, which we regret enormously. They should not have done that.
If the worst does happen and the Government lead us—through their lack of application and, frankly, the internecine squabbles on the Government Benches—to leave the EU without a trade deal, the rules of the WTO leave us no option but to trade with our European partners on the same basis as we trade with all countries with which we have no free trade agreement. This is the most favoured nation principle at the heart of the WTO: that there must be no arbitrary discrimination between trading partners of a similar developmental status, unless those countries have negotiated a free trade agreement that meets the WTO’s definitional requirements.
If we were to adopt amendments that allow the UK Government to set customs duties on imports and exports from every other country in the world but not our European neighbours, in the case of a chaotic no-deal situation we would be faced with two unpalatable options. First, we could disregard the most favoured nation rule, in which case we would be exposed to virtually limitless potential dispute challenges from all other WTO members. The second option is abiding by the most favoured nation rule, but that would mean having to trade with all other countries on the same basis as we traded with the EU—namely, as the amendments would have it, without tariffs or quotas. Some Conservative Members and groups, such as the so-called Economists for Free Trade, would wish for such an outcome—a unilateral abolition of tariffs and all other trade barriers—freely admitting that such a scenario would see the end of manufacturing in the UK, as well as the end of agricultural production and the concomitant loss of millions of jobs.