Like many others of my political persuasion, I think that the UK should leave the EU (and would advise other countries to do likewise). The sheer cost incurred on small businesses as a result of regulation from Brussels makes any benefit dwindle in comparison. Sure, there are positives, free migration and free trade within the bloc, but the cost of regulation (even before domestic “gold-plating”) is much higher. So, we should leave. What then?
Apart from gaining a Swiss type trade relationship with the EU (which is more than possible if we left), where can Britain look to gain strong trading relationships? There are three main areas, first the US. The United States is the largest consumer of British exports, and we import more from the US than every country except Germany. The basis for our legal system is the same (Common Law), we share a language, common heritage and culture. If we were to join a ‘single currency’ we would be far better off doing it with the US than the EU, at least according to the research department of Goldman Sachs.
The EU has recently began negotiations for a “free trade” deal with the US, likely as a carrot to convince the UK to stay on board. However, the resulting trade deal struck between the EU and US will be nothing close to what might be considered free. Because of the natural protectionist nature of both the EU and large bodies within the US, any deal struck between these two bodies would have so many caveats and clauses that is would make the whole venture pointless. The UK, working from an individual basis, without the same in-built protectionist nature, would likely pull off a much better deal for businesses and individuals within the UK.
The second area to cover is one that is up and coming, a political grouping that is projected to see annual total growth of 3.7% in coming years, a grouping that the UK is not only already part of, but one that harbours for us the same advantages to trade as the US. I am of course referring to the Commonwealth of Nations. Despite our strong links, no Commonwealth nation is in the UK’s top 10 trading partners (the highest is Hong Kong which comes 14th for exports and 16th for imports). This is because our EU membership restricts our trade with these nations, the trade walls the EU has built have forced prices up, cutting them off. Despite this, a fifth of our top 25 trading partners are Commonwealth nations. We already trade a great deal with these nations. Ireland, a former Commonwealth member itself and 47th largest economy in the world is one of our largest trading partners, buying more British exports a month than Hong Kong does in a year. Why is such a small country so high up the list? The reason is that, like the Commonwealth nations and United States, Ireland has those same advantages to trade with the UK. The difference being Ireland is trapped in the same dwindling customs union as the UK. Naturally they become tied closer to us. Whilst we should not find fault in close links with Ireland, we should be concerned over being trapped in a block which excludes the BRICs and countries beyond.
We can look outside our narrow customs union and replicate South Korea. South Korea not only has free trade agreements (FTAs) with the EU and EFTA, but China, the US, India and Peru, with negotiations with other countries, such as Australia, ongoing. Given the success of the world’s 15th largest economy, why should anyone think that the 6th should have more difficulty? The Commonwealth gives the UK an unfair head-start, yet we rejected it for the short-term safety of the EU in the 1970s. Commonwealth countries are amongst those pushing for more free trade deals, Australia has deals in force with 6 nations (Chile, US, New Zealand, Singapore, Malaysia and Thailand) and negotiations are ongoing with China, India, Japan, South Korea and Indonesia. A trade area covering ASEAN, Australia and New Zealand already exists, whilst New Zealand also have a FTA with the Gulf Cooperation Council (which covers the states on the Arabia peninsula, excluding Yemen), and are working on a deal with Russia, Belarus and Kazakhstan. The UK cannot do this, but little New Zealand can. There’s a plethora of trade deals being conducted by nations in and around south east Asia, major growth markets, and we’re missing out. Lagging behind with the bureaucratic nightmare that is the EU.
Whilst the EU dallies on its trade deal with Singapore, the Commonwealth nation already has deals with Australia, Chile, China, India, Japan, Jordan, Korea, New Zealand, Panama, Peru, the nations of EFTA, and the other members of the ASEAN trade bloc. The EU is behind, holding the UK back, ensuring opportunities for expansion and growth are missed in favour of creating a single nation to “rival” the US. Instead, Europe is slowly becoming an economic backwater, soon to become a continental nursing home as the population ages. Without serious change the EU will trap Britain into the decline we thought we were being saved from when we first joined. We now need to do what we should have done in the 1970s, look not to Europe, but to the world.
Finally, the third area, you’ll have to wait another week for.