A POPULAR idea is floating around certain circles: that you do not need a deep trade deal with the EU in order to trade with them in a significant way. For instance, Guido Fawkes, a blog, points out that each year China trades with the EU to the value of half a trillion dollars. But China is not in the single market and so does not have to accept annoying rules and regulations. Japan trades a lot with the EU, but is not in the single market and does not have to accept free movement of labour (it has net migration close to zero, in fact).

This has implications for post-Brexit Britain, of course. The implication seems to be that Britain need not be in the single market in order to trade lots with the EU. 

But take a closer look at the figures, and that rosy conclusion is thrown into doubt. It is true that America, China and Japan trade lots with the EU (our chart looks just at goods trade, which is easier to measure). But these countries are much, much bigger than Britain is. So, proportional to the size of their economies, they…Continue reading