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Analysis

These 5 EU trade myths are Brexiter nonsense

by Nick Kent | 01.05.2018

Theresa May’s Brexit cabinet committee meets tomorrow to decide what kind of customs relationship the UK should have with the EU after we leave. Here are five myths about EU trade that her ministers should bear in mind.

Myth 1: Being in the EU has stopped the UK from trading outside the EU

In which case why is Germany China’s largest trading partner? EU rules don’t prevent any member state from trading outside the EU. That’s how France can do more trade with the US than the UK does. What holds Britain back are domestic issues like our low productivity, our lack of investment in skills and the fact that we don’t make enough of what the world wants to buy. “Global Britain” is a slogan, not a policy.

Myth 2: The UK already trades on World Trade Organisation terms with most countries

Wrong. Most of our trade is with the EU or with the 64 third countries that have trade agreements with it. The UK trades with just 24 countries on the basis of WTO rules alone.

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Myth 3: Lots of non-EU countries want to sign a trade agreement with us

Maybe, but on their terms. The UK could negotiate its own trade agreements outside the EU, but how good would the terms of those agreements be? Also, would the resulting additional trade (if any) make up for the trade we will lose on leaving the EU?

Australia and New Zealand want a post-Brexit trade agreement with us but they also they want us to drop EU rules that protect our farmers from unfair competition and consumers from unsafe food. And they want more visas for their citizens.

The US is also keen on a trade agreement with the UK – but on its (unattractive) terms. It’s not about whether you can get a trade agreement, it’s whether that agreement is worth having that matters. And UK government figures show that even if we signed trade agreements with all these Commonwealth countries and the US, our GDP would grow by just 0.7% a year compared to the 5% annually we would lose from leaving the single market.

Myth 4: Being in a customs union solves most of the UK’s trade problems

No, because while leaving the customs union could cost us £25 billion a year through the reintroduction of tariffs and customs checks, losing access for our services and the return of regulatory barriers are even greater problems. Staying in a customs union is desirable because it would help to protect UK jobs, but it isn’t sufficient.

Leaving the EU Single Market means we lose access for our highly profitable services exports as well as our goods exports to a market of 500 million people and will no longer share a common set of trading rules we helped to write. Losing those advantages is so serious that it would be better to be in the single market as well as a customs union – or, even better, to stay in the EU.

Myth 5: High EU tariffs keep out products from poor countries

The Brexiteers falsely claim that the EU hurts the poorest countries with high tariffs. The world’s 49 poorest countries can export tariff free to the EU as part of the “anything but arms” initiative. The truth is that the EU is the most passionate and committed supporter of the world’s poorest. It provides them with tariff free access for their goods and despite opposition from Leave campaigners, remains the world’s largest aid donor.

Edited by Luke Lythgoe

12 Responses to “These 5 EU trade myths are Brexiter nonsense”

  • Good points. Sadly it is still common to hear Brexiteers repeating their lies on TV and radio interviews and their interviewers hardly ever pick them up. And so the Big Lie gets repeated and moves into myth.
    One exception to this is Adam Boulton on Sky, who interrupted a Brexiteer who was claiming that everyone knew that when they voted to leave the EU that also meant leaving the CU and more. Boulton was able to quote just some of the misleading statements from Brexiteers. it would be good if the BBC would adopt a similar stance instead of letting these “misunderstandings” go by. Their audience needs to know what kind of person they are dealing with and Boulton does that very well.

  • We are just back from a holiday in Italy and we are proud to be Europeans……… just a moment ago David Davis was on television answering questions………… the number of judicial bodies to oversea trade and security and air transport was staggering in the event of leaving the EU.
    Please God let the Lords amendments stop the rot.

  • ICM polled on this (brexit) again in December, a few days before Christmas, and we have now asked the question a third time.

    In October, when polling was conducted just after the EU summit that did not conclude with an agreement on phase one of the Brexit talks because the process was taking longer than the UK government originally expected, the net confidence score was -15 (30% said the talks would end satisfactorily, against 45% who said the opposite.) In December, after a phase one agreement was reached, the net score was -4 (35% minus 39%).

    But now the net score is down to -19. Only 28% think the talks will conclude satisfactorily, against 47% who think they will end unsatisfactorily.

    Brexit is dying from a lack of any plan, a lack of understanding of how trade and business works, government incompetence and fantasy right wing economics and ideology

  • On a practical note, passport controls will have to be rearranged, as there will have to be three channels, UK, EU, and others. Easy, compared to the Northern Irish Land Boundary.

  • Yet another site pleading the case to go back in. Are they calling for a second referendum? If they get that, and get a yes, do they think that things will be like they used to be? Will the rebate remain or disappear? How long will we remain outside the Euro? At least be honest to put the proposed action, without that action, all that happens is a lot of people moan, and demand we negociate (item-X) which results (has resulted) in a very weak bargaining position. The EU knows it is negociating for us to pay for them for a few years, we seem to be clasping at non-existant straws, as demanded by publishers comissioning articles like this.

  • First of all, the BBC I am watching has plenty to say about Brexit, but, it seems to me, mainly to support Remain. I am getting increasingly frustrated with the amount of prime airtime given over to that view point. It is also exceedingly irritating to be dismissed as nut-cracked idiots, who are incapable of making an informed decision,
    With all this talk of single markets and customs unions, there seems to be little mention of the restrictions that will be imposed upon us, i.e, the requirement of free movement, continuation of the EU judicial system and, very likely at some point, adoption of the Euro.
    Many, many people have no idea of what life was like pre 1973. I worked in the freight business, much of which was intended for the European market and it all worked very well. Some goods had beneficial tariffs, others were subject to anti-dumping duties. No problem. Then we were thrown into the firstnone, the EEC. For those who don’t know, the European ECONOMIC Community. No mention of uncontrolled free movement, our laws being made and enforced by the ECJ, impossibly large amounts of our money being used to support the fat-cat lifestyles of innumerable, unelected European bureaucrats etc.
    It will all be so easy we, in the freight industry, were told. Be like sending goods to Sheffield. Wrong. The additional forms and procedures, generated by our joining the EEC and wishing to use the beneficial tariffs, were a nightmare. My company had to buy a vehicle and employ a courier, just to satisfy the customs documentation requirements.
    Then there was the EC (European Community), then the EU (European Union).
    So, what next ? That’s the nightmare scenario. Just Europe ? One for all ?
    It doesn’t bear thinking about. Single markets and customs unions, as with the original EEC, are merely the first steps. We sign up, but have no say or sway with the other 27 (or, in the future very likely, more) states. What future for us then ?
    My view is to leave immediately, cut the umbilical cord, the baby usually does survive, forge our own way forward, without the bindings of the dinosaur EU.
    Just one last point on free trade with conditions, hardly anyone ever seems to mention the fact Europe needs to trade with us too. Free trade is beneficial to all in the economic climate the U.K. and Europe have created over the year’s, but, that is all it is – Free Trade.

  • The referendum score stands at 1-1. The first was on June 5th 1975 when we voted two-to-one to stay in the European Community (Common Market).

    We need a third, a decider, because Theresa May and most of the Cabinet are opposed to BREXIT but are bound by the 2016 narrow result won by lies.

    The discussions we should have had before the vote have happened since and it’s hard to imagine the majority still want to LEAVE, now that all the lies have been exposed.

    Remaining in the EU (via a 3rd referendum) is far simpler than being repeatedly told by 27 nations that we cannot pick our favourite European cherries once we leave the club.

    BREXIT will make the NHS worse not better, as much-needed EU staff leave, partly because Pounds-Sterling are now devalued Pounds-Boris and have lost too much value even before our last goodbyes.

    Markets outside the EU are tougher due to competition from newly-emerging nations where wage levels and regulations are lower. Our economy will decline, unemployment rise and funds for all public services, including the NHS, will be further squeezed.

    Yes, definitely push for a 3rd referendum with some rules like politicians being truthful and held to account for deliberately misleading voters. There was too much scaremongering rubbish spoken about immigrants. The UK has many who are from outside the EU due to our history of colonialism, slavery, England Rules the Waves, Blah..blah..blah.. Nothing whatever to do with the EU and quite within British legislators to decide the level. (Most economic assessments credit them as a plus to our economy, quite apart from other considerations.)

    Not every EU worker in the UK is an immigrant anymore than I would be if I spent time working in Germany, say. Millions of Brits live and work abroad; freedom of movement is precious and results partly from the Peace Dividend of a Western Europe with seven decades free from warfare and now able to include former Communist nations. I’m writing this from S Korea, been here since 2010.

  • It will be good for the Remain cause if Tony Blair keeps out of the debate. His toxic legacy of very possibly taking a country to a war on a false pretext (same charge as the one faced by Mussolini) actually makes the borderline majority swing towards Brexit.

  • @ Graham (7 May) and Jennifer (8 May)

    Thank you for putting some points across. My thoughts on a few themes:

    – Euro: The EU cannot force the UK to adopt the Euro. The UK would have to sign up of our own free will and I sense no appetite for that, both before and since the 2016 referendum.

    – Freedom of movement: It seems odd to blame the EU for the UK not implementing powers it has. For example, Germany chose to restrict flows from Eastern Europe in 2004 but the UK did not. Being outside of Schengen, we could register anyone coming from the rest of the EU and deny access to known criminals or deport anyone not finding work within a few months – we have these powers today. Also, remember the UK has complete control over non-EU immigration and yet at the time of the referendum that was running above EU immigration. Again, this seems to be a policymaking issue for the UK, not the EU.

    – Economics: The vast majority of economists estimate negative effects from Brexit for the UK, with the losses being greater the further we are from current arrangements (i.e. worst if we leave both the Single Market and Customs Union). I was initially hopeful of counter arguments for free trade made by the likes of Patrick Minford, but I have done some more reading and am satisfied that his arguments don’t stand up to scrutiny. For more, see http://blogs.lse.ac.uk/businessreview/2016/05/27/how-do-economists-for-brexit-manage-to-defy-the-laws-of-gravity/

    – Regulations: I had hoped Brexit would yield tangible benefits in terms of reduced regulatory burdens for UK businesses. I’ve searched for more on this, but am told what we wouldn’t ditch (worker rights, environmental protections, etc) but not what we would. Can you please give me specific examples of what regulations the UK would abandon? I’m genuinely curious.

    – ECJ: a common set of rules requires a common enforcement body to uphold those rules. UK judges are involved in this process and I’m not aware of any crying foul, so I’m not sure why this is such a big deal. If you have examples arguing the opposite, please share them.

    Identity: I doubt the French, Germans, Spanish, Swedes and other nationalities feel their identities have been diluted through EU membership. I know I don’t feel any less British for being part of the EU.

  • If you think facts can defeat lying fantasy you are deluded. It’s like the middle aged men saying they do not need glasses despite all medical evidence showing the weakening of the eye muscle with age. They refuse to have an eye test as this will prove they do indeed need glasses and so they continue their delusions. The same with Brexit facts. If we had a referendum to tow Britain to a warmer climate. The fools when told this was just silly would tell you ” It’s the will of the people!” And you are against democracy. Never mind geology, physics and science. They have had enough of experts.

  • CHRIS the people who voted in 73, were lied to by BRUSSELS as well as HEATH, as he admitted to the public a few yrs before he died on the FROST program. We are still being lied to by all parties especially Brussels,as they need our £11 billion a yr.