Is Lord Lawson right that Britain should not try to negotiate a special trade deal with the European Union?

Grace Lievesley, research manager at Global Britain, says Yes.

The UK is the fifth largest economy in the world and now, following our decision to leave the declining European Union, we should aspire to become the fourth or third largest economy.

To do this, we need to expand our business in fast-growing markets while holding on to what we already have. We need to prepare as many free trade agreements with the four As – Asia, Africa, Australia and the Americas – while co-operating with the EU. 

All free trade agreements require hard bargaining, but securing the best possible EU relationship requires political bravado. Lord Lawson is right: to achieve the best arrangement with the EU we should first trigger Article 50, certainly by February, and announce we shall trade outside the Single Market and its common tariff barrier under World Trade Organisation rules. We can then have full control of our economy, trade, laws and borders – and negotiate any enhanced arrangements with the EU from a position of strength.

Sam Bowman, executive director at the Adam Smith Institute, says No.

It’s hard to invest in a country that frequently nationalises foreign businesses. It’s hard to sell goods to countries that pass special laws to penalise foreign products. It’s hard to do business somewhere regulation is designed to keep you out.

All of these have nothing to do with tariffs, but are very important in allowing trade between countries to take place. And they are particularly important for firms that sell services rather than goods.

This is why it’s important to do a deal with the EU. Just as early free trade agreements got two countries to mutually agree not to put tariffs up on each other’s goods, free trade agreements today involve the promise not to pass regulations that make it hard for foreign firms to do business. Without an agreement with the EU that regulatory barriers will not be thrown up to keep our firms out, we will risk severely hampering our ability to trade with our largest, nearest market.