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Will Our Ability To Trade Suffer If We Leave The EU?

Two contrasting viewpoints of how being in the EU impacts on our ability to trade!

Yes, Trade Will Suffer

William Spencer

There are many reasons why we should decide to remain in the European Union and there are many valid reasons we should leave. Yet despite all the arguments thrown your way in recent weeks, there is one simple reason why Britain should remain: trade. Take everything into account, what should take priority is the long-term state and prestige of our nation, its place in the world and how we can prosper and thrive in a globalised economy.

We take our position as one of the greatest economies in the world for granted. Many don’t realise that our membership of the European Union has given us the economic strength we enjoy today. If we leave, it’s too late. A once great nation, plummeting to the bottom until all we have left is a proud history, but no present or future. This may seem dramatic, but a nation’s economy is everything. It represents the strength of a nation and the power and influence we can exert around the globe. Our economy depends on our membership of the EU because of trade.

Trade within the EU is built around the single market. When trading with other countries within the EU, it is just like trading in your own country. The trade of goods and services is freed up through this system. There are no tariffs placed on imported goods. When a British company has a product to sell, they aren’t simply offering it to 60 million Brits, but to over 500 million Europeans. Take Jaguar Land rover for example. One of Britain’s greatest manufacturing industries and a substantial player in our economy. Not only does JLR sell their product around the country, but as part of the EU they have access to the single market, where no tariff is placed on their import, making them extremely desired products. Taking the car industry as a whole, of which JLR makes up a significant amount, the European Union accounts for 57.5% of car exports from the UK. In 2015, 80% of JLR sales went abroad. Granted, this figure accounts for exports to countries such as China and the US, but the EU is included in this.

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As UK companies trade with mainland Europe, they continue to grow, creating jobs and further boosting our economy. Only through membership of the EU does trade have such an astronomical effect. To leave the EU therefore would be to shut ourselves off from the single market. To shut ourselves off from this great opportunity to fuel British businesses and services would put our economy in peril. Free trade amongst countries is one of the most significant methods of increasing wealth in a country. The very free trade we enjoy between EU countries does exactly that. As growth in business increases job opportunities, wages rise and the overall spread of wealth expands.

The EU itself is a remarkably good region to do business with, from the point of view of nations around the world. The openness of the EU’s trading system has allowed it to become a very attractive bloc to trade with. The goods and services put in the shop window by the members of the EU are of excellent quality and extremely diverse products. The goods and services that each member exports are grouped together, coming under the umbrella of the EU. Therefore when countries such as the US, China, India, Japan, Russia and many other countries, wish to trade, they don’t see single nations on their own, with their own products on offer, but instead they see a single bloc of nations, with a vast array of high quality goods and services. They see this under the name of the European Union. It is better that way. The great trading nations of the world prefer to do their business with large blocs, just as the EU is presented. They have no interest in doing trade deals with each individual member. When you compare even the big players of the EU such as Britain, Germany and France, they do not sit on par with the likes of the US, Russia and China in terms of wealth, size of economy and exports. Yet when you group them together as the European Union, they become the biggest economy in the world. One that everyone wants to do business with. In 2013 alone, the EU led the way in world trade, exporting €2415bn in goods and services, with the China coming in second at €1817bn. Importing goods was just as impressive, the EU with €2188bn ahead of the US at €2079bn. Once again I argue that this can only mean positives for our economy. As part of the EU we trade our goods all over the world, and reek massive profit from that. Businesses thrive and the economy grows.

Positives aside, here comes the fear side. Much has been said of the scaremongering from both sides of the campaign. Some may go too far. However when it comes to trade we should be certain that leaving the EU would ensure our economy shrinks. We’ve heard it from many important political figures that if we left, there would be no special favours for us. On a visit to the UK, Barack Obama explained how Britain, upon leaving, would move to the back of the queue for a trade deal with the US. Our special relationship would not put us to the front. Britain’s trade is not so appealing to other countries that they would drop everything, trade deals with the EU, just to negotiate one with us. The same can be applied to every other trading partner of the EU. Britain alone is small and a minor player when it comes to global economics and others would not be rushing to our doors to organise trade deals. The EU would take priority for them.

As part of the EU we are seen with far greater prestige and benefit immensely from the free trade deals that it does with major economic players around the world. Why would anyone want to ruin the success trade from the EU brings to Britain? When our economy is so fragile currently, why would we take away the benefits that it brings? Some say they want to leave just to see what happens, but do we really want to risk that? Cutting ourselves off from trade within the EU and the trade it brings from the globe would be pure brainlessness. If we leave, we risk our economy descending into mediocrity. It would survive of course, but it would never flourish. The many flaws the EU has should not distract Brits from the immense benefits our economy experiences, which will only continue to increase so long as our membership remains.

No, Trade Will Not Suffer 

John Scotting

We have a once-in-a-lifetime opportunity to rectify the mistake of being part of an “ever closer union”. Sadly, after 43 years of institutionalisation, nervousness about the outside world could lead to a repeat offence. Vested interest groups seek to secure a Pyrrhic victory by distracting voters with the vagaries of unprovable economic speculation. These from the same “expert” soothsayers that erroneously advocated the adoption of the ill-fated Euro, and negligently failed to raise the alarm as we sailed headlong into the financial iceberg of 2008.

Big business financiers, shareholders and executives are justifiably nervous. Their privileged status, in benefiting from the onerous regulations that their full-time lobbyists secured, may be temporarily disturbed. A referendum requires them to seek wider support. In the absence of any genuine benefit for ordinary people, the case to remain relies entirely on fear. The illusion of a dystopian future forms part of a national inferiority complex. Apparently, our runt of an island is incapable of survival without Brussels’ paternalistic instruction.

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Britain is more than capable of not just surviving but thriving. Our economic growth and employment figures comfortably outperform declining EU averages. We have the 5th largest economy, 4th most powerful military, and as one of five permanent members of the UN security council, arguably more diplomatic influence than any other country. We have more top universities per head than anywhere in the world, produce world-class R&D, and pioneering advanced manufacturing. Ours is the international language of business, and our capital a global hub boasting strong links with every developed and emerging economy on the planet. Yet we tremble like a leaf at the prospect of standing on our own two feet?!

Perversely, when ‘remainers’ are forced to concede that Britain is indeed great, they attempt to adopt that as an argument to maintain the status quo, by mistakenly crediting every positive to our membership of the EU. There are three main issues with that reasoning though: (1) post-Brexit risks are wildly exaggerated, (2) there is no status quo, (3) the EU is impeding our future success, not aiding it.

Exaggerated Risk of Leaving

We are told on one hand that leaving would be a leap of faith, yet on the other, that the free movement of people and at least some of the £13.5Bn that is taken today would persist. So we know exactly what the worst case scenario looks like. Either way, EU leaders have been clear that they want the UK to remain part of the common market. And there’s little wonder! An independent Britain would be the EU’s largest export market, providing over 5 million jobs. The EEA stretches from non-EU Iceland to non-EU Turkey. So the suggestion that we could find ourselves on the outside, isn’t just disingenuous, but an insult to our intelligence.

The treasury, therefore, based their economic impact projections on false assumptions, then compounded the deception through contorted calculations to deliberately mislead us with the claim that each household will be £4,300 “worse off”. It is not really surprising to find that an open-border economy with 3 million extra people is projected to grow by more than the alternative; but to divide the increased output (GDP) by the same number of households, regardless of the difference in population, not only inverts the result, but bears no relation to living standards anyway. If the case against Brexit is really that strong, why would such fabrication be required?

No status quo

The treasury report, along with all other speculation designed to overstate the “Stronger IN” pretence, deliberately ignores current trends and fails to stand up to academic scrutiny. At the current rate of decline, EU trade will represent less than a third of our exports within a decade, as the EU’s share of economic output continues to fall, from 36% when we joined to 17% today. If we take the long term view, which of course we should, greater opportunities lie elsewhere.

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The EU project is failing for reasons that could fill several books, but in short, a one-size-fits-all approach doesn’t work across nations with different climates, lifestyles, cultures, diets, aspirations, economies, and political systems. The single currency (Euro) exacerbates this by preventing poorer peripheral nations from devaluing their currency, allowing them to compete, create jobs, and raise tax revenue. The net result being a dependency on bailouts from successful economies, like our own, and millions of jobless Europeans being forced to migrate in search of gainful employment.

Exponentially increasing immigration confirms that Britain is among the preferred destinations. Unfortunately, the sheer volume of this influx inevitably applies pressure to public services, infrastructure and housing. With youth unemployment in many EU countries ranging between five and ten times that of the UK, the anticipated summer migration crisis will amplify the trend as low-skilled workers are displaced. In the long term, the accession of Turkey, among others, will only increase the strain.

Holding us back

Brexiteers are accused of wanting to “pull up the drawbridge”; a straw man – we want the opposite! Regional trading blocs were the political zeitgeist of the 1950’s, but over half a century later, clinging to an analogue idea in a digital age is nothing more than misty-eyed sentiment. With the World-Wide (not EU-wide) Web, low cost freight transport, and high speed international travel, global trade has never been easier. The rest of the EU makes up just 6% of the world population, and only 6% of UK businesses export to them. Insular EU-protectionism is preventing us from expanding our horizons, with trade deals being held up by the demands of 27 other nations. Unencumbered Switzerland has 7 times as many agreements in place!

It would be dishonest to claim that, in the short-term, swapping the EU for EFTA won’t come at a price. Divorce can be expensive, so it’s easy to see why some choose to remain in loveless marriages. But our EU membership is a depreciating asset that should be disposed of while we have the chance. If we fail to pluck up the courage, our children will be saddled with a malignant burden. For that reason, I’m out!

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