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Published on July 20th, 2012 | by Catch 21
Image © [caption id="attachment_10761" align="alignnone" width="566"] © Hector Birchwood[/caption]   A glance at several papers last week reveals numerous letters calling for a British exit from the European Union, evidence of a significant shift in public opinion against the EU. Titles accusing the EU of “bleeding Britain dry” and fears that we are “shackling our trade to Europe” reflect widely held views that Britain is suffering from its relationship with this regulatory behemoth churning out unnecessary Directives from armies of unelected barmy brussels bureaucrats (catchy title courtesy of The Sun). Cameron is riding this wave of opinion by hinting at a referendum - although he refuses to be drawn about the timing and the wording of the question itself. And he has now mentioned that it will be a question for the next elections, although he did reveal this week in the Telegraph that he would “never campaign to take us out of Europe.” Yet it is worth taking the time to consider arguments for our continued membership, as this could soon escalate into a hugely important referendum question. The main benefit that is always cited from our continued membership is trade, along with the claim that we must stay in the Union in order to be able to shape our relationship with the single market. This argument is rarely examined though and too easily swept aside in the tide of patriotic indignation and cries that we can make it on our own. However this is a vital factor and should not be overlooked. Our business activity with the EU accounts for a large proportion of our trade (estimates range from 40% to over 50%) and around 48% of our exports.  It is not worth getting involved in a battle of statistics (see this article on the Rotterdam effect), suffice to say that it is a significant amount. And the benefits from this participation are huge, including being part of a large trading bloc with a global voice, attracting investors who want access to the single market and an increased amount of trade within the bloc simply because of the abolition of barriers (9% by one estimate). Eurosceptics now loudly argue that we could enjoy all the benefits of the single market without all the heavy-handed regulations that comes with full membership. The success of Norway has been a repeatedly brought up in support of this view. Contrary to popular belief, however, membership of the European Economic Agreement (EEA) would significantly change the UK’s trading relationship with Europe. It’s true that the EEA does go further than a simple free trade agreement by allowing signatories access to the “four freedoms” (goods, services, capital and labour). But these do come with several obligations including social security requirements for people who move and some employment regulation such as the Working Time Directive. More importantly, the UK would not apply a common external tariff as it would not be part of the customs union. This means that the EU would still apply Rules of Origin (ROO) duties on goods or parts that were imported from a third country into the UK and then into the EU. This is not so much a problem in Norway where its fish exports for example are entirely Norwegian goods, but it would heavily affect UK industries such as car exports containing many foreign components or largely foreign-owned chemical companies. Finally Norway still implements around 75% of EU legislation and has little say in shaping EU regulations, as this report from normally eurosceptic thinktank Open Europe points out. There are provisions for EEA signatories to have their opinions heard on committees in areas which affect them (Article 99 EEA), but this is a weak form of input. The UK will lose its voice in terms of passing or blocking new legislation which could have huge impacts on its relationship with the single market. At the moment for example we still have an input into the creation of the banking union, despite not being part of it directly. In the EEA the UK will still be subject to much financial services regulation yet with little bargaining ability to obtain any safeguards for the city. Outside of the EU we would be left isolated and struggling to find our global footing, as emerging markets have not traditionally been easily accessible for our exports. We should remember that among these barmy bureaucrats in Brussels there are many Brits and that we are still fully part of the decision-making process, be it in the European Council, the Parliament or bargaining for the British interest particularly in the Council of Ministers. It is important not to let our hatred of these faceless automatons supposedly hell bent on banning straight bananas or converting us all to metric cloud our vision. Should it come down to a referendum, we should consider the consequences very carefully before ticking the wrong box and enjoying the rest of our recession in splendid isolation.    

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Britain vs Barmy Brussels Bureaucrats

© Hector Birchwood

 

A glance at several papers last week reveals numerous letters calling for a British exit from the European Union, evidence of a significant shift in public opinion against the EU. Titles accusing the EU of “bleeding Britain dry” and fears that we are “shackling our trade to Europe” reflect widely held views that Britain is suffering from its relationship with this regulatory behemoth churning out unnecessary Directives from armies of unelected barmy brussels bureaucrats (catchy title courtesy of The Sun).

Cameron is riding this wave of opinion by hinting at a referendum – although he refuses to be drawn about the timing and the wording of the question itself. And he has now mentioned that it will be a question for the next elections, although he did reveal this week in the Telegraph that he would “never campaign to take us out of Europe.” Yet it is worth taking the time to consider arguments for our continued membership, as this could soon escalate into a hugely important referendum question.

The main benefit that is always cited from our continued membership is trade, along with the claim that we must stay in the Union in order to be able to shape our relationship with the single market. This argument is rarely examined though and too easily swept aside in the tide of patriotic indignation and cries that we can make it on our own. However this is a vital factor and should not be overlooked.

Our business activity with the EU accounts for a large proportion of our trade (estimates range from 40% to over 50%) and around 48% of our exports.  It is not worth getting involved in a battle of statistics (see this article on the Rotterdam effect), suffice to say that it is a significant amount. And the benefits from this participation are huge, including being part of a large trading bloc with a global voice, attracting investors who want access to the single market and an increased amount of trade within the bloc simply because of the abolition of barriers (9% by one estimate).

Eurosceptics now loudly argue that we could enjoy all the benefits of the single market without all the heavy-handed regulations that comes with full membership. The success of Norway has been a repeatedly brought up in support of this view. Contrary to popular belief, however, membership of the European Economic Agreement (EEA) would significantly change the UK’s trading relationship with Europe. It’s true that the EEA does go further than a simple free trade agreement by allowing signatories access to the “four freedoms” (goods, services, capital and labour). But these do come with several obligations including social security requirements for people who move and some employment regulation such as the Working Time Directive.

More importantly, the UK would not apply a common external tariff as it would not be part of the customs union. This means that the EU would still apply Rules of Origin (ROO) duties on goods or parts that were imported from a third country into the UK and then into the EU. This is not so much a problem in Norway where its fish exports for example are entirely Norwegian goods, but it would heavily affect UK industries such as car exports containing many foreign components or largely foreign-owned chemical companies.

Finally Norway still implements around 75% of EU legislation and has little say in shaping EU regulations, as this report from normally eurosceptic thinktank Open Europe points out. There are provisions for EEA signatories to have their opinions heard on committees in areas which affect them (Article 99 EEA), but this is a weak form of input. The UK will lose its voice in terms of passing or blocking new legislation which could have huge impacts on its relationship with the single market.

At the moment for example we still have an input into the creation of the banking union, despite not being part of it directly. In the EEA the UK will still be subject to much financial services regulation yet with little bargaining ability to obtain any safeguards for the city. Outside of the EU we would be left isolated and struggling to find our global footing, as emerging markets have not traditionally been easily accessible for our exports.

We should remember that among these barmy bureaucrats in Brussels there are many Brits and that we are still fully part of the decision-making process, be it in the European Council, the Parliament or bargaining for the British interest particularly in the Council of Ministers. It is important not to let our hatred of these faceless automatons supposedly hell bent on banning straight bananas or converting us all to metric cloud our vision. Should it come down to a referendum, we should consider the consequences very carefully before ticking the wrong box and enjoying the rest of our recession in splendid isolation.

 

 

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