By David Price
The United Kingdom is stumbling towards a no deal with the European Union, and it’s like “lemmings falling off a cliff,” we are told. There’s now a realistic prospect that Britain is just about to do “catastrophic damage” to herself, in some tragic act of self-harm. Our beloved country is set to ride its Union Jack-painted scooter off the political equivalent of Beachy Head, crashing down to the rocks below, so they say…
But hold on a minute, let’s look at what awaits us in that “no deal” scenario. If it’s such a terrible drop down from this “cliff edge,” why are so many boats bobbing on the serene, glinting blue sea beneath? The rest of the world is “down there” – eighty five percent of the planet’s GDP to be precise – and when you check the figures, you see they’ve all grown rather faster than the Eurozone in the past decade. Meanwhile up here on this cliff top, it’s misty and it’s raining.
Check out the United States, whose economy has expanded eleven percent more than the Eurozone since 2008. It’s lucky for us that they’ve done so well, otherwise we wouldn’t have buyers for all our Jaguar and Aston Martin cars, Dyson vacuums and Dunhill designer threads. The USA is our largest single export market, and unlike the EU they buy far more from us than we do from them. As time passes, this proportion rises, just as British exports to the EU proportionally drop.
China is another country that has expressed serious interest in doing a free trade deal with the UK! In the past decade, the world’s second largest economy has taken more people out of poverty than live in the entire EU put together. Until recently however, the Eurozone managed to stack up precisely zero economic growth, and youth unemployment in Greece hit fifty percent. Chairman Mao would be turning in his grave, but the European Commission hasn’t batted an eyelid.
Then there’s our friends and family in Australia, Canada and New Zealand, India and other Commonwealth countries. Sure, they were piffling little countries when we began our slow climb up this rocky outcrop in 1973, but are now all doing rather well without us. They didn’t have a banking crisis so have continued to grow strongly – thanks in part to smart free trade deals with the biggest fish in the deep blue sea – the USA, China and Japan. In fact, all those countries seem to be having a ball. Maybe manning the lifeboat isn’t so scary after all?
When we started climbing up this cliff, it accounted for nearly forty percent of world GDP. What was not to like about a free trade deal with the “Common Market” back then? Trouble is, it turned out to be rather more than that. Some told us we were buying a stairway to heaven, but never admitted what it actually meant. It turned out that it was a full-blown political union with flag, anthem, currency, court and even army – rather than just a trading block. That’s why the majority of British voters voted to bail out last year – confident that we could avoid any heavy weather coming our way.
Passionate advocates of the EU – who seem to have an awful lot of friends in high places – tell us that dark and stormy skies await us down below, on that vast and scary sea. But –“land ahoy!” – most countries now trade with one another on World Trade Organisation rules. No political masters, no exorbitant subscription fees, no patronising lectures or insults flying around; instead they just get on with buying and selling to one another. Wasn’t that what we wanted out of the “Common Market”?
WTO tariffs are relatively trivial – an average of around 3.5% across all market sectors. The Civitas thinktank says it will cost British exporters around £5.2bn, but we would raise£12.9bn back from tariffs on EU imports, so could more than compensate our manufacturers – and even reduce VAT for UK consumers with cash to spare. WTO certainly hasn’t stifled growth – rather it is the EU that has vastly underperformed in growth terms. WTO also gives us – for the first time in nearly half a century – the chance to do fast bilateral free trade deals with the world’s leading economies, bringing prices right down in the long run.
The British government will need to be more muscular – we’ll need some serious infrastructure spending – but we’re set to save billions in EU fees. One especially exciting thing is that outside the Single Market and Customs Union, we can pursue imaginative trade programmes with developing countries that are impossible under the EU’s protectionist Common External Tariff. So there was a time when things looked good up here on the cliff, but when the political weather changes it’s never clever to leave yourself exposed. Instead, let us reach out to the big wide world beyond.
Labour Leave shares a number of viewpoints from external commentators, both Leave and Remain, without necessarily endorsing any of the viewpoints therein.
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