Closer EU trade ties greater prize for UK than making separate deals, minister says

Exclusive: Douglas Alexander, on trade delegation to India, talks up economic benefits of joint trading arrangements with Europe

Britain will benefit from much closer trading relations with the EU even if that means giving up its ability to negotiate free trade agreements, the Scotland secretary has said.

But he has told the Guardian he thinks 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.

Alexander’s comments show how much Starmer’s successor, Andy Burnham, who called this week for a “serious dialogue” on the UK’s relations with the EU, including possible re-entry, has shifted the government’s position.

But he said the economic benefits of trading agreements with the EU would be greater.

He said: “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. 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.

“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.”

The ministers spent much of their time in meetings with Indian officials as they attempt to iron out what they say have been “teething problems” with the early implementation, especially 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.”

One hurdle to delivering that is the UK’s desire to discuss the 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.