Scotland secretary says closer EU trade a bigger UK prize than separate deals

Burnham calls for EU dialogue as ministers pursue India trade gains

Speaking to the Guardian from Mumbai, Alexander argued that geography makes integration with Europe more economically valuable than bilateral agreements with distant partners.

“In trade policy, geography still matters,” he said. “The Channel is just 21 miles wide. Our largest trading partner is and will remain the European Union in the years to come. We trade almost twice the amount with the European Union that we do with the United States, the largest single-country trading partner.”

Alexander helped negotiate the UK’s separate deals with India and the United States when he was a trade minister under Starmer. He told the Guardian that joint trading arrangements with the EU — whether under a customs union or full membership — would be a bigger economic prize, not least because the EU has now negotiated its own similar deal with India. The Guardian reported that under Starmer, ministers had argued against rejoining because it would mean having to abandon trade agreements with other countries.

Alexander said he had long opposed Brexit.

“It’s no secret that I was not a supporter of leaving the European Union, and I called out early as trade minister what I described as the ‘post-imperial delusions’ of the Brexiteers,” he said. Alexander argued the global environment had moved in the opposite direction from what Brexit advocates promised. “Back in 2016, they promised a world of Britain as a buccaneering free trade nation in a world where barriers were coming down. Sadly, what we’ve witnessed in the year since is a more protectionist, more regionalised world in which barriers have been going up.”

He cited UK analysis from when the country joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — a Pacific trade grouping he described as making “geopolitically” sense for the UK — to argue the long-term GDP payoff from such agreements is modest. The analysis found the long-term boost to UK GDP from CPTPP membership is less than a tenth of 1%.

“If you compare that with estimates of the structural damage to the UK economy from Brexit, you get a sense of just how important Europe remains to our future trade and prosperity,” he said.

“We’re already paying a real economic price for putting up new barriers to our European neighbours who, with almost half of total UK trade, remain easily our largest trading partners,” Alexander said. He said he did not back any particular method for achieving closer UK-EU relations, declining to take a position on whether the government should pursue a customs union or full membership.

Alexander spoke from Mumbai, where he was joined by Business Secretary Jonathan Reynolds, Environment Secretary Angela Eagle and a group of mayors from northern England. He welcomed progress made since the UK-India agreement came into force earlier this year, noting that the price of scotch whisky in India has fallen by 10–15% since the deal took effect.

The ministers spent much of their time in meetings with Indian officials addressing what they described as “teething problems” with early implementation, particularly for smaller businesses.

“There are always teething problems,” Alexander said. “We’re also having a conversation at the level of regulation to see how do we overcome non-tariff barriers that can prove to be an inhibitor to the kind of progress we want to see unless they’re addressed.”

Many in the government say a bigger prize will be to reach an agreement at next month’s EU summit, where Burnham hopes to sign new trading deals for emissions, electricity and agricultural products. One hurdle to delivering that is the UK’s desire to discuss what the Guardian described as the EU’s protectionist “Made in Europe” policy, which British manufacturers fear will shut them out of a key market.

EU leaders say they are willing to discuss British entry into that scheme, though they are also pushing for the UK to impose tariffs on Chinese electric vehicles, without which they fear the UK will become a back door into the European market. Reynolds told the Guardian this week he would not impose tariffs simply because of pressure from Brussels.