Non-tariff barriers

The UK has almost never managed to export more than it imported - even during the years of Empire and the industrial revolution. This is despite the UK still being one of the world's biggest manufacturers. We export a lot, we just import even more.

And even though we are big manufacturers it is services that really earn us our keep. We exported £26 billion worth of motor vehicles in 2015 - but earned £29 billion from travel services and £50 billion from financial services. Services officially make up 43% of our exports, but this is probably a serious underestimate as earnings from services are hard to count and even hard to categorise - if Rolls Royce sells you an engine then is the maintenance contract counted as part of the engine cost or a service?

All this sounds like good news - exporting services will mean avoiding all those dreary tariff arguments. Who cares if we are ejected from the single market and have to trade using WTO rules, we are selling services which aren't covered by either.

The bad news is non-tariff barriers. The world goods trade has already gone global. Tariffs are at their lowest ever in history. It is now the non-tariff barriers that cause problems. For goods this means quality and safety standards. For services - well, there is a reason that trade regulations rarely cover services.

Services have a lot of rules attached because the damage done by dodgy services can be hard to detect, take a long time to kick in, and can become very expensive. Discovering your beef burger is half horsemeat may be distressing but you just chuck it and buy a fishburger. If someone sells you substandard financial advice then you end up retiring without a pension and living off state benefits.

So services have to conform to local rules and standards and providers need locally-recognised qualifications. To sell services internationally it is necessary therefore to harmonise regulations across borders and cross-recognise equivalent qualifications. It also means having an supranational adjudicator to rule on disagreements.

Of course, bowing to laws made elsewhere and accepting the decisions of a non-elected, non-UK body will mean giving up our new-won 'sovereignty'. But it's that or give up trading services.

Ironically, the EU has got closer to allowing free trade in services than any other group of nations ever has. Shame we're leaving.