The Brexiteers’ idea of how WTO rules would work is pure fantasy

A £2bn contingency fund, 3,500 troops on standby, and reserved space on ferries: these are some of the government’s plans for a no-deal Brexit. With Theresa May stepping up the planning, what was once seen as economic disaster for Britain, is being rebranded as a “clean break” from the EU on World Trade Organisation terms. Jacob Rees-Mogg tweets: “WTO terms are much better than remaining shackled to the EU.” Wetherspoon chairman Tim Martin is currently touring the country telling anyone who will listen that only “project fear” thinks Britain being relegated to WTO terms will be damaging and that a no-deal Brexit will allow us to become one of the “champions of free trade” once again.

With this narrative gaining popularity in some corners, it has brought the WTO into the national conversation in a way that hasn’t happened before. While other countries struggle to understand why any nation would willingly leave the world’s largest trading bloc to trade on WTO terms, they overlook the connection between the WTO’s image as a vehicle for free trade and the vision of history where “the terms ‘Britain’ and ‘free trade’ were virtually synonymous” that Brexiteers cling to.

The WTO, established in 1995, was the first major international institution to be created following the conclusion of the cold war and the emergence of a new world order of global capitalism. Now home to 164 member countries all signed up to shared rules that govern international trade, it was created to guide the world away from the various shades of protectionist economic regulations that had emerged in the decades following the second world war. The WTO promised to provide the legal architecture for a multilateral trading system and, despite the clear asymmetry in global trade that resulted from historical exploitation of some parts of the globe by others, it offered the vision of the international marketplace as a level playing field where states make free and rational choices about their trade relations with each other. By encouraging the reduction of tariffs, the level of tax that countries impose on imports from other countries, the WTO was supposed to make global trade easier, leading to increased riches for all parties.

The only problem was that everyone quickly realised trading on WTO terms did not meet the reality of their economic needs. As of 2018, all WTO members are noted as a signatory to some sort of bilateral or regional trade agreement, rather than trading on WTO terms alone. Yet, as settling on a withdrawal agreement has so far seemed impossible, the UK is now stepping up plans to trade with the EU under WTO terms in the event of a no-deal Brexit.

To understand why parts of the Tory party are happy for Britain to walk in the opposite direction to the rest of the world regarding WTO terms, we must understand their attraction to the myth of how in centuries past, Britain became rich through “global free trade”. With influential economists David Ricardo and Adam Smith serving as intellectual forefathers, Britain’s rise to prominence is seen as intertwined with the rise of the doctrine of free trade, with the removal of legal restrictions on trade producing a system where natural British industriousness and innovation could thrive.

Celebrating and exaggerating Britain’s free-trade policies of the late 19th century, this narrative ignores the prologue to the story, in which the British empire first accumulated wealth through gunboat diplomacy and enforced markets over the 18th and early 19th centuries. Britain only embraced unilateral zero tariffs once its geopolitical power had been built up, and it would quickly depart from free trade and move towards protectionism at the start of the 20th century through the policy of imperial preference, encouraging trade within the empire.

However, the myth persists that anything that promotes free trade promotes British interests. Brexiteers promote a fantasy ideal of the WTO being the answer to all Britain’s problems despite the libraries of research that argue that its rules lead to the impoverishment of countries that have to rely on them. Because Brexiteers misunderstand Britain’s past, they believe that Britain has a “special relationship” to world trade. They cannot fathom the damage that relying on WTO terms to govern trade with our largest trading partner will do to the economy, even if it is obvious to rest of the world.

Dr Kojo Koram teaches at the School of Law at Birkbeck College, University of London, and writes on issues of law, race and empire

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