Juliet Samuel:

The Government has yet to decide what we want from a trade deal, and this leaves us at the EU’S mercy

Britain is impatient to be moving on. Ask anyone in government and they’ll agree: it’s high time the EU let us talk about our future relationship and trade deal, rather than keeping us all locked in limbo. But our Government also has a secret: it isn’t actually ready to talk about an EU trade deal, because our Cabinet has not decided what it wants.

In bald terms, we are on the cusp of agreeing to hand over €50 billion to the EU without even having developed a consistent internal view on what exactly we’d like to buy with this cash. The Government appears to have decided that no strategy is better than a bad strategy. To call this situation appalling is an exercise in British understatement.

In 10 days’ time, there is a good chance that EU countries will finally decide that the talks can advance. If that happens, the UK needs to be ready to slap a detailed, technical plan on the table. We won’t get everything in it, but it would at least mean that a British document might form the basis of the negotiations to follow.

This document should include a generous offer to keep up security cooperation and a proposal to give EU citizens preferential immigration access over non‑europeans, provided Britons get reciprocal rights. This could amount to some form of free movement limited by caps or salary thresholds. It should also cut off tax credit and child benefit payments to non‑british citizens, though perhaps with exemptions for low‑paid medical workers such as nurses. In general, those with medical skills or good‑ quality academic postings should be exempt from any migration cap and gain automatic access.

The hardest part, though, will be negotiating the guts of the EU‑UK trade deal. Michel Barnier, the EU’S chief negotiator, likes to insist that Britain cannot be offered a “bespoke” trade deal and must sign up to an existing template. This might seem important, but debating it is a waste of time. All trade deals are, by definition, bespoke deviations from standard WTO trading terms. That is the point of them.

What Mr Barnier really means, of course, is that Britain cannot expect to strike an agreement that goes much further than the Eu‑canada or Eu‑south Korea trade deals, which largely cover goods, not services. The UK’S main task is to persuade European governments to go further.

We should start with the relatively easy part. Britain should state that it wants to continue trading without any tariffs. The Eu‑canada deal eliminates nearly all tariffs; given the continent’s large surplus in goods trade with the UK, it shouldn’t be hard to persuade the EU not to impose tariffs where none currently exist.

What will be more complicated is working out a customs arrangement. Leaving the customs union generates an unavoidable administrative burden for companies. This is because even if the EU and UK could agree to respect all of one another’s regulatory standards for goods – itself unlikely – a customs border still requires goods to undergo checks as to where they came from (whether a widget really is Uk‑made, for example, or whether the UK bought it originally from the US). It should, however, be possible to keep the checks away from bottleneck trading points like ports, as do US and Canada, or Norway and Sweden. The UK should suggest that both sides commit to streamlining customs procedures as much as possible and propose technical ways of doing so.

But now we get to the really tricky part: an agreement in services. Almost seven‑eighths of UK GDP is generated by services; we have a healthy trade surplus in them and, as technology advances, the line between goods and services is blurring. But covering services in trade agreements is extremely difficult – so much so that even the EU’S single market doesn’t cover most of them. Here, we are dealing not with tariffs, but the very stuff that makes up sovereignty: regulations, licences, standards and so on. This means there is a direct trade‑ off between free trade in services and autonomous control over an economy. The optimal point at which to make that trade‑off is different for each industry, in part depending on how closely the EU has taken – and will in future take – an approach that suits the particulars of the British economy.

The UK should focus on several key areas that are most important to our services trade with the EU. We should suggest an agreement to continue recognising the validity of professional qualifications held by each other’s workers. We should lay out a detailed proposal for cooperating on financial regulation in return for as much access as we can get. This could involve an obligation to consult one another before dramatically changing rules, the ability for EU and UK regulators to supervise directly each other’s largest, systemic businesses such as clearing houses and an offer to continue sharing technical expertise (since this is often a vehicle for influence). The Government should work out similar offers for the regulation of data usage and privacy, broadcasting rights, aviation and energy.

Striking agreements like this might be in the EU’S economic interests, but let’s be realistic. It will be an uphill struggle to persuade Europe’s governments to abandon their current stance, because of their obsession with the idea that a good deal will undermine the single market and support for the EU. So we need to work out not only what Britain will propose, but also in which areas our Government will ultimately prioritise market access over setting our own rules and where it will do the opposite.

Even if all of the UK’S ideas for services trade are rejected, however, it would still be worth making them. Doing so underlines Britain’s openness and also makes clear to Europe’s governments what there is to gain from cooperating and what expertise Britain has to offer. These ideas could even bear fruit in future, at a less heated political moment, as allegiances shift and the nature of trade changes.

The next phase of the Brexit negotiations will provide an opportunity to reset. Britain should grab the initiative, mount a disciplined PR campaign on the Continent and go for broke. But none of this will be possible if the Government cannot also provide a definitive and detailed answer to the question: “What does Britain want?” Rather than muddling through the next year at the EU’S mercy, the Government needs to answer that question now. Time is running out.