When Trade Off Becomes Sell Out: Very Different Things!

Wading through the mass of downloaded internet files that I have on my computer tends to remind me just how haphazard my thinking is, when it comes to the various subject matter that peaks my interest at any given moment in time, from the NHS to history, from politics to economics, from the EU to national and local government, each in their turn has stretched the old "grey cells", before being quickly replaced by a completely different subject entirely.

 

Anyhow, it was during one of these daily trawls that I came across a document entitled "The Great British Trade Off", written by John Springford and Simon Tilford, on behalf of the Centre for European Reform, a pro-European Think Tank, which is dedicated to a careful reform of the European Union, rather than allowing it to continue as it is at present, or worse still, advocating its wholesale destruction. In prefacing its report, the CER notes that:

 

As the eurozone economy continues to stagnate, the proportion of British trade accounted for by the rest of the EU is falling, and non-European markets are becoming more important for British exporters. But this is not a reason for the UK to leave the EU.

 

Membership of the EU significantly increases Britain’s trade with other member-states, while there is little evidence that it reduces trade with countries outside the Union. Britain is home to a larger stock of EU and US foreign direct investment (FDI) than any other EU economy and is the preferred location for investment from other leading markets. Some of this investment would be threatened by a UK exit from the EU.

 

If Britain were to leave the EU, it would face a difficult dilemma: having to negotiate access to the EU’s single market in exchange for continued adherence to its rules – or losing access in return for regulatory sovereignty that would be largely illusory.

 

Of course the entirety of these three short paragraphs is almost entirely predicated on the absurd suggestion, or assumption; that a UK outside of the European Union: as in no longer a fully participating member, under the terms of the currently existing treaties, would no longer trade with Europe under any circumstances, which simply cannot happen. Although it has never been used by a member state, the whole purpose of Article 50 of the Lisbon Treaty was to ensure that any member country that wished to withdraw from the EU, could do so on friendly terms; and with a continuance of future trading agreements ensured for all parties. The oft repeated myth that rabid Eurosceptics want to completely withdraw from continental Europe, in terms of trade, travel and general co-operation, to then hide behind some form of defensive, isolationist wall is an absurdity, created for the most part by those Europhile parties, who would happily part with two thousand years of British national history, in order to build their own political legacies. From pre-Roman Britain through to today, our country has traded with other peoples, other nations, other cultures from all around the globe, so it seems highly unlikely that all of a sudden we're going to pull up the shutters and simply say no more trade to or from continental Europe.

 

Clearly risks to future foreign investment in the UK do and will exist, in the event that the British people ever do get the much promised referendum on our European membership, in 2017, or any other year you care to mention. Nissan, Ford, Unilever are just three of the major foreign investors who have already said that they would "reconsider their positions" in the UK, if the majority of the population decided that Britain was better off out of the Union and therefore instructed a future British government to begin negotiations on a withdrawal from the customs union after more than 40 years, the more commonly referred to "Brexit". However, before people start panicking about the loss of investment and jobs that such commercial reassessments by the likes of Ford, Nissan and Unilever might mean, it's worth considering this basic fact; all businesses reconsider their commercial positions on an almost daily basis, whether that's because of interest rates, banking charges, rates of pay, changes in government, costs of transportation, or any number of other associated factors. At the same time consider the fact that Britain is first amongst many when it comes to ease of doing business generally, that in or out of the EU, Britain remains well placed geographically to access continental Europe, that outside of the EU and its minefield of manufacturing regulations, it would probably be easier and cheaper to set up a new business in the UK; and consider also that it would benefit no-one, neither British, nor Europeans, for a trade war to begin, simply because nobody's business interests benefits from that. As for Nissan, Ford and Unilever specifically? As has been mentioned in a previous blog post, all three companies derive substantial benefits from doing business in the UK, with Ford selling around 200,000 car units here, while Unilever achieve overall sales of an estimated 2.5 billion Euros from Britain alone, so just who would lose out in the long run, if these companies decided to reconsider their positions in the UK? The answer is, no-one really!

 

As for the CER's final point about Britain's "regulatory sovereignty being illusory", one can only suppose that they're either being deliberately disingenuous with their readers, or they have failed to understand the basic principles of the European Union generally. Were the EU a genuine customs union, a collection of sovereign states dedicated to free internal trade, with an absence of national borders and tariffs, then perhaps one might be a little more relaxed about the UK's membership of the club. But that is not what the European Union is, or indeed what it wants to be! With its mantra of "ever closer union", the EU makes no pretence of what it wants to be, a federal superstate, akin to the likes of the United States of America; and the emerging Russian Federation, neither of which purport to be a simple customs union. For anyone to claim that the European Union does not present a threat to national sovereignty is to fly in the face of the overwhelming evidence, kindly supplied by the likes of Vivien Reding and her like, who openly call for the creation of a United States of Europe, with not a blemish of shame on their cheek.

 

Were the European Union simply involving itself in individual nation's agriculture, fisheries, manufacturing and continental trade, then one could willingly accept that all of these competencies were legitimate areas of EU involvement, as they all relate to the activities of a genuine customs union. But the EU has become much more than that; and has chosen to involve itself in virtually every aspect of a nation's daily life, from transport to taxes, from elections to education, from the environment to energy production, from justice to prisons, from international diplomacy to international agreements; and yet they still want more, with moves afoot to centralise and control their very own army, navy and air-force, as well as their own continental police force. Independent national control over such areas of competency might well be regarded as "illusory" by some British commentators, but here's the question, why would a simple customs union want complete control over such vital and necessary services? And once we have handed them over, could we ever get them back; and what's to stop the EU from using them against us, or another Eurosceptic population? Surely, any loss of control over such vital areas of national interest shouldn't be considered as illusory, but as a matter of grave concern, as should be the fact that successive British governments have happily allowed such losses of sovereign control to occur in the first place.

 

In a sense and certainly in the writer's personal opinion, the CER report mentioned goes to great lengths to illustrate the immense difficulties the UK would almost inevitably face, assuming that a public referendum on our EU membership, delivered a resounding out vote, although only when looking at such a scenario from a purely business perspective. Ultimately, the people of Britain will have to decide exactly what economic value they put on their national sovereignty and their personal freedoms, as in reality that is what is at stake. Will they opt for an independent Britain, controlling its own borders, trade, laws, tax, political representation, transport, fisheries, agriculture, etc. or will they choose to become a federal Britain, a minor region of the much larger United States of Europe, with all of the important decisions being taken in Brussels and Strasbourg, by a largely unrepresentative European Parliament?

 

In some respects the authors of the CER report on Britain's on-going relationship with Europe are correct, in that within any sort of international trade agreements there are elements of give and take, gain and loss, good and bad, for all of those parties involved. However, rather than our membership of the European Union representing an equitable trade off between parties, there are many who believe that our country has been the subject of an undisclosed sell-out; and that's a very different thing indeed.