I entirely agree with my hon. Friend’s first point. For as long as I can remember, it has been the policy of Conservative Governments, some of which I have served in—indeed, it is a policy in which I have been involved from time to time—to press for the single market to be extended to cover all services. Until the referendum almost 18 months ago, we were still actively engaged in canvassing for that and trying to push it forward inside the EU. We are also making considerable progress towards a digital single market across Europe, which will be very important. The other member states are likely to go on and complete that quite soon.
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On my hon. Friend’s second point, I think he is referring to the economic doctrine that used to be known as mercantilism, of which President Donald Trump is extremely fond. I regret to say that it is a great fallacy that a free market trading arrangement is valuable only to the party to it that has a surplus in trade for the time being and that it is a handicap to the party that, for the time being, happens to have a deficit. However, I do
not think that this is the occasion on which we should debate this matter at length. He and I are both guilty of debating these things at length.
I do not accept my hon. Friend’s argument. For example, if we are going to solve our problems when we leave Europe by having a free trade deal with the United States, which I find wholly unlikely, one of the things that Donald Trump will eventually notice is that we have a large bilateral trade surplus with his country. That is why the only interest we will get from America is in how it can open up our market, mainly to its food products, with which our farmers will find it very difficult to compete. We will also discover that Donald Trump has decided that all trade agreements involve regulatory convergence. We will either have the same regulations or something that we as part of the EU were trying to negotiate with the Americans—namely, mutual recognition of regulations.
When our Secretary of State for International Trade came back from his preliminary excursion to offer the Americans this great opportunity to throw open their markets to us without conditions as never before, he found that one of the first things he had to do was try to persuade the British public to see the advantages of chlorinated chicken. He could have gone on to talk about hormone-treated beef and genetically modified crops. As it happens, I have no strong objection to those things—I have eaten in America and I have survived—but I am not sure that that would be an easy sell to the British public or to the House of Commons. Indeed, I think it would be a very difficult sell to the House of Commons.
The fact remains that the benefit of free trade agreements is that—so long as we are careful not to go into areas where we can see we cannot compete—they can stimulate increased economic activity on both sides of the deal. As for the fact that our trade over recent years with non-EU countries has grown more than our trade with EU countries has done, that is the way in which the globalised economy has worked since the 1990s. We actually do very badly in an awful lot of the strong emerging countries. The Germans completely outperform us in China, for example, but we have got going there. The fact is therefore that every other country will find that their trade with countries that were previously poor and are now rapidly emerging will grow faster than their trade with their traditional markets. That does not alter the fact that our European market is absolutely dominant.