Why the EU is a hindrance in a Globalising World

Euan McHardy June 5, 2016 1
Why the EU is a hindrance in a Globalising World

Of all the scaremongering by the Remain campaign, perhaps the most scurrilous is the idea that Britain’s influence would diminish if it left the European Union. As the monotone goes, Britain’s prosperity is dependent on trade with the European Economic Area – of course we could still do this outside of the EU, but we would end up like the European Free Trade Association countries (like Norway) which, like us, need to and do, trade with the EEA. However, because they are not members of the EU they are unable to formulate the EU’s “Internal Market” rules under which they trade and so are reduced to “Fax Democracy”, whereby Norway’s elected representatives have to wait to be told by Brussels which policies they have to adopt.

In fact, nothing could be further from the truth. In the first place, between 2000 and 2013 Norway implemented no more than 4724 out of the 52,183 EU directives, regulations and legislative acts put into place over this time period, just 9%. Secondly, and more importantly, Norway has a de facto veto over which EU regulations it has to enact, as article 102 of the EFTA agreement with the EEA allows them to influence and contribute to new EEA policies and legislation from an early stage.

Moreover, more and more of the rules under which international trade is conducted are created at a global level, not a regional level. Under the current arrangement Norway participates in this process, as it retains its seat on the relevant bodies – Britain on the other hand gets no direct say; as part of the price of our EU membership we must give up direct representation on a whole slew of important international bodies.

For example, it is the International Labour Organisation, not the EU, which decides working-time rules. It is the UN’s Food and Agriculture Organisation and its Codex Alimentarius Commission which agrees worldwide standards on food safety and plant and animal health which we are compelled to accept. Britain’s status as an island country means that we have always had a disproportionate maritime presence, but the world naval rules are set by the UN’s International Maritime Organisation. Contrary to what one might expect, the Internal Market standards of the EU for motor manufacturing are derived from regulations produced not by the EU itself, but by the World Forum for the Harmonisation of Vehicle Regulations – yet another subsidiary of the UN.

Britain has no direct representation on any of these UN bodies, being represented only by the EU – which in practice means we are represented only where our interests coincide with the majority of other EU member states interests. Given that our economic model and circumstances differ significantly from most of our European neighbours it seems unwise to rely on an organization in which we have only 8% of the qualified majority votes to defend our interests at these important forums.

Yet the Remain camp are asking us to believe that our 8% of the qualified majority votes in an organization that only purports to represent a part of the only continent in the world that has experienced negative economic growth this decade is more valuable as a tool of British influence than direct representation on all these forums – not to mention our own seat on the World Trade Organization (WTO) – all of which we have to give up as part of the price of our EU membership. The Norwegians have their own seats and therefore representation on all of these bodies, which in practice means that they have more influence than we do. If we leave the EU we can reclaim our seat on these forums. Our influence on the process of international economic integration would be enhanced immeasurably, the doom-mongering by the Remain camp notwithstanding.

Another example: in recent years Britain’s financial services sector has become arguably the most important aspect of our economy. However, the rules followed by the banking industry when assessing asset risk are decided not by the EU but by the Basel Committee on Banking Supervision, while worldwide financial regulation is largely molded by the Financial Stability Board, which is the creation of the G20. Neither have anything to do with the EU, so we don’t gain any influence over these important areas either by remaining a part of it.

So far as continued access to the EU’s Internal Market Post-Brexit is concerned, we would have two years to negotiate a new deal after Article 50 of the Lisbon Treaty was invoked. This is plenty of time to arrange entry into EFTA. There is no reason to suppose that they wouldn’t welcome us with open arms, as a country of Britain’s stature sharing their agreement would enhance their credibility. So far as the EU is concerned, Article 3 of the Lisbon Treaty states that the EU must uphold ‘free and fair trade’ with the rest of the world – this is legally binding – so they would be compelled to accept this arrangement, leaving aside the fact that it’s not in anyone’s interests to start a trade war.

The globalising nature of international trade rules makes the EU increasingly irrelevant. The Remain camp are right about one thing: it is important that Britain be at the top tables of the international decision making process in order to mould them to our advantage it we are to thrive – they’re just 100% wrong in their assertion that being an EU member state puts us there, quite the opposite in fact. A Remain vote will be one that denies Britain the influence and tools necessary to shape the 21st century; a Leave vote will be one that enables us to exit “little Europe” and reclaim our status as a leading world power.

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