The Exciting New World Outside the European Union, by:Ruth Lea
With every new EU regulation and with every extra pound paid into the E U’s coffers, Britain’s EU membership is an increasingly bad deal. I do not know of any cost-benefit study that shows EU membership actually benefits Britain. On the contrary, they vie with each other to show how costly, and increasingly costly, membership is. The country needs a new relationship with the EU.
A free trade relationship for Britain and the EU
When we set up Global Vision in 2007, we focused on the economic case for an EFTA/Swiss-style relationship with the EU based on trade and mutually beneficial co-operation. We understand that trade with the EU countries is important to Britain but, under a free trade relationship with the EU, this would continue. There is not a shred of evidence to show that trade would be blocked – just look at Germany’s trade surplus with us.
But we do not need the single Market, which is still widely misunderstood in this country as a free trade area. It is not a free trade area. It is a highly regulated market based on the notion of “harmonization”. And the costs of the Single Market’s regulations far outweigh the benefits. We do not need the EU’s Custom’s Union either, an idea as dated as drainpipe trousers and beehive hairstyles. Indeed we would be better off outside the Custom’s Union. We would then be free to choose the countries we wanted to negotiate special trade deals with, rather than rely on Brussels to decide for us.
This negotiating freedom is a huge potential boon for this country. It is too often overlooked. Much is, rightly, made of the savings we would make if we left the EU. But too little is made of the potential prizes if were free to negotiate our own trade deals. Yet these potential prizes are the really exciting aspect of leaving the EU in the rapidly changing 21st-century global economy, where Europe will inevitably shrink in relative importance. They could transform the economic prospects of this country.
Free to trade: the importance of the Commonwealth
The US, which is UK’s largest trading partner by a substantial margin, and the biggest investor in the UK by a mile, would be an obvious candidate. But so would be the Commonwealth nations whose economic potential is quite special, not least of all because of the Indian economy, which is clocking up annual growth rates of 7-8 per cent. The Indian Diaspora, well represented here in the UK, adds to the excitement of the Commonwealth’s economic prospects and its relevance to Britain.
And the Commonwealth is open for trade and economic cooperation. Commonwealth leaders issued the historic ‘Edinburgh Communique’, following a Commonwealth heads of government meeting (CHOGM), in 1997. It was a masterly and inspired document that outlined the objectives of the Commonwealth relating to increased trade and investment opportunities and also, crucially, to development issues.
The individual Commonwealth nations were, of course, left to decide which policies they should implement in order to achieve the Edinburgh objectives. The Commonwealth Business Council, which should be far better known in Britain than it is, was established in 1997 following the meeting.
The contrast between the Edinburgh Communiques flexible, bottom-up approach and the top-down, inflexible and heavily regulated directive-driven processes of the EU, a regional bloc in relative decline, could not be starker.
The Commonwealth nations, taken together are an economic colossus comprising some 15 per cent of world GDP, 54 member states and two billion citizens. They will inevitably become more powerful. The Commonwealth spans five continents and contains developed, emerging and developing economies. The Commonwealth in it’s richness and diversity mirrors today’s global economy in a way that the EU simply cannot start to aspire to. It is the future, not a curious relic of empire.
Moreover, other Commonwealth countries see this when we do not, blinded as we are by our masochistic attachment to the EU and its Single Market. The attitude of Canada for example, is altogether more enlightened. “Commonwealth Advantage” is a go-ahead Canadian organisation with the objectives of creating new trade opportunities and strengthening ties with other Commonwealth nations. Commonwealth advantage sees the Commonwealth as a true economic bloc, where the commonalities of language, law, accounting systems and business regulations can present a 15 per cent cost advantage over dealing with countries that are outside the Commonwealth.
And Kamal Nath, India’s Road Transport Minister and former Industry Minister, was quoted recently saying: “The Commonwealth is the ideal platform for business and trade… I hope that India’s ties with the Commonwealth will move from strength to strength, and that the new paradigm will only mean greater warmth, greater cooperation.” The “new paradigm are his words, not mine.
The framework for Britain to raise its game in the Commonwealth is already in place. The institutions exist. Our Commonwealth partners are very willing partners. But we must be free of the EU’s restraints, bureaucratic, legalistic and psychological, if we are to make best of the opportunities open to us. Making the best of these opportunities would benefit everyone in the Commonwealth.