A no-deal Brexit would ruin any chances Britain had of negotiating free trade deals with other countries, Ireland’s prime minister has warned.
Speaking in Davos Leo Varadkar suggested the unresolved Irish border question would make it “very difficult” for Theresa May’s vision of a global Britain trading with the world outside the EU to be realised.
He said the combination of World Trade Organisation rules and the Good Friday Agreement meant the country would likely have to adopt full alignment with the EU rules and single market anyway to meet its commitments.
“The United Kingdom in a no-deal scenario will face enormous difficulties,” he told an audienc at the World Economic Forum.
“In a no-deal scenario Ireland will still be in the single market, and will still be part of all those trade deals which come with being part of Europe, the trade deal with Japan, the trade deal with Canada, the trade deal with Korea, the trade deal with Singapore.
“In a no-deal scenario, the UK won't have any trade deals with anyone, and I think it will be very difficult for them to conclude any trade deals with the question of the Irish border unresolved. Given we have a solution on the table already, let's ratify that.”
Under the Good Friday Agreement and political commitments made by Theresa May during Brexit talks, the UK is committed to preventing a hard border from appearing in Northern Ireland.
However under World Trade Organisation (WTO) rules the UK is bound not to cut special favours for other countries unless they are part of a recognise free trade agreement – under the so-called “most favoured nation” regulation.
The rules are in place to prevent countries from waging trade wars against their competitors.
Mr Varadkar’s intervention is the latest bid to up the pressure on British MPs to agree to the so-called backstop provision in the Brexit withdrawal agreement.
Eurosceptic MPs are implacably opposed to the Irish backstop, which locks the UK into some EU rules to help prevent a hard border between Ireland and Northern Ireland. They say it is a breach of sovereignty and are voting down the entire Brexit deal in opposition to it.
The policy is set to automatically trigger in 2021 if there is no trade deal between the UK and EU negotiated by then – or if the trade deal does not allow for frictionless trade.
But part of MPs’ resistance to the plan is because while it is operational it would effectively keep the UK in a customs union with the EU – limiting Britain’s ability to do trade deals with other countries.
Some Brexiteers say Brexit is an opportunity for the UK to do trade deals with other countries other than the ones that the UK already has agreements with as part of its EU membership.
The United States is sometimes cited as a plausible example, though president Donald Trump has said that under the agreement struck between the UK and EU a trade deal would likely be off the table
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