The trade myth Boris Johnson needs

One might have thought that Brexit debate could not be made any more confusing. But the Conservative Party leadership race is doing just that. The obfuscation serves a political purpose.
Early this year, Brexiters who are happy for the UK to leave the European Union without a deal latched on to an argument that Britain, once it leaves, can keep its current EU trade benefits while it works out a new arrangement with Europe. This argument, based on obscure bit of trade law, sounded too good to be true, and it was.
For proponents of a no-deal Brexit, the trade clause at issue is much like the fictitious claim, famously plastered on the side of a bus during the 2016 Brexit campaign, that leaving the EU would mean a 350 million pound windfall for the National Health Service: It’s easy enough to remember, and it has the ring of precision.
In fact, under World Trade Organisation rules, nations cannot give one trade partner preferential treatment unless they have a special trade arrangement such as a customs union. Once the UK leaves the EU, it has to be treated like other non-members, and that means it has to start paying tariffs on imports. A seldom used provision of Article 24 allows for an interim period during which the UK presumably could hold on to its existing trade terms while working on a new deal. But first Britain and the EU would have to agree to the terms of an interim agreement, including “a plan and schedule” for a new trade deal. In other words, even a “no deal” Brexit calls for a deal.
If such an agreement were possible, Brexit would already have happened and Theresa May’s leadership would have been declared a raging success.
Some hard Brexiters say the EU will be motivated to compromise by its trade surplus with the UK. That argument doesn’t carry far either. The EU may export twice as much to the UK as it imports, but UK goods would be hit harder by tariffs than EU goods would. The UK under Johnson might change course, but it would still be unlikely to make imported inputs more expensive and thus increase the profitability of smuggling.
Johnson’s allies must know that Article 24 is no magic solution here, and that the UK has nothing like the leverage they suggest it has.
Dominic Raab, the former Brexit secretary, who has thrown his support behind Johnson revealed in an interview with BBC said, “political will” is all that’s needed for Britain to prolong the status quo under a standstill arrangement: “If the EU wants to throw up its hands and say we’re not going to budge, we will refuse all reasonable compromise and we end up on WTO terms, it will be a decision made by the EU.”
Using the Article 24 distraction to inspire the faithful is essential to gaining power. Using it for blame-deflection may be necessary for holding on to power. Such are the strategies by which populism survives.

—Bloomberg