Our trade is not at risk with the rest of the EU

The argument about what kind of a relationship the UK wants and needs with the emerging centralised Eurozone should not be monopolised by arguments over our trade.

Those who say we need to stay in on current terms, or stay in on similar terms often tell us we need to do so to protect our trade. This is not true. Many countries trade successfully with the rest of the EU without being members. The rest of the EU would be as keen as the UK to ensure continuity in trade when the UK renegotiates its relationship.

Those who wrongly see the EU as just a trade and business club we need to belong to should understand that the EU is not a free trade area. They often imply it is and say that is what we want. Belonging to a free trade area with the rest of the EU would be a welcome improvement on what we have now, removing remaining tariff and subsidy barriers, expecially in areas where the EU has restrictive policies.

There are customs areas, free trade areas, and common government areas. The EU is both a customs union and a common government area. The danger of the latter is it entails the erection of substantial barriers and costs to doing business through a large legislative and regulatory programme. Worse still, all these extra costs are imposed on UK exporters to non EU destinations as well as to EU ones.

The UK could have full access to the single market on current terms, it could just belong to the customs union, or it could negotiate a free trade area with the EU. To those who think the current single market is better than relying on the international trade framework, it should be possible for the UK to belong to the single market from outside the federalist Treaties. Better still would be a new arrangement which leaves both the UK and the continental trading partners free to do as we wish, whilst preserving the trade which is in our mutual interest.

The motor industry is rightly against facing a higher tariff wall from outside the single market than they face from inside. The German industry, I am sure, will want access to the UK market on at least as good terms as it enjoys today, so there should be no great worry about this issue. There needs to be more debate explaining the crucial differences between free trade areas, customs unions and the single market. You do not need hundreds of common laws in order to trade with each other.

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86 Comments

  1. Peter van Leeuwen
    Posted July 29, 2013 at 5:43 am | Permalink

    The UK won’t go bankrupt outside the EU. Significant trade will always remain, whether with a new deal within or outside the EU. In the end this is about emotions hence an often emotional eurosceptic stance. Will you want to be part of a large block or do you want to go it alone.

    • Leslie Singleton
      Posted July 29, 2013 at 8:08 am | Permalink

      PvL–“Going it alone” is a silly tendentious way of putting it. Is Canada (a sovereign economy on the edge of a trade bloc, for the blind who cannot see) “going it alone”? We want to be left alone and don’t want to be homogenised. Ironically, as anyone who has lived on the US/Canadian border will affirm, America and Canada are ideologically very similar and homogenisation might make sense for them, but even so they manage well enough as they are.

      • Peter van Leeuwen
        Posted July 29, 2013 at 3:07 pm | Permalink

        @Leslie Singleton: Is Canada trying to break free or something? No, so “going it alone” doesn’t apply there in the same way as it does for the UK. You (the UK) are part of a group but some want the UK now to “go it alone” I see nothing wrong with that phrase. No countries on the continent are being homogenised, you’re just illustrating the emotions that seem to run about the issue, which lead some eurosceptics to use exagerated language.

        • Leslie Singleton
          Posted July 29, 2013 at 6:01 pm | Permalink

          PvL–Cannot believe you said that bit about Canada breaking free–Can you possibly not understand that there is no need for Canada to break free from the kind of Trade Only relationship they have with the USA and which the majority here increasingly want? I personally pray for the Eurozone to blow itself to pieces sooner rather than later while there is still a chance that it can be done peaceably. I suspect you are well off and have little idea of what so many are suffering for your wretched EU. You don’t want to hear it but something has to happen one day to pay down the debt and when I say pay down I mean money will actually have to be given, understand that, given to do the paying down ie I do not mean some further shenanigans involving credit extensions and restructurings. Bring on that realisation I say.

          • Peter van Leeuwen
            Posted July 30, 2013 at 4:14 am | Permalink

            @Leslie Singleton: You have been made convinced that the eurozone is doomed without real money being handed down (North – South). That may still happen. But do realise that reform is also a powerful tool. It worked for countries like Latvia and Estonia. The people in these countries were already more used to living through hardship than e.g. the Greeks, but that is not the issue here. So we still see countries joining the euro, be it at a slower pace.

          • Leslie Singleton
            Posted July 30, 2013 at 10:33 am | Permalink

            PvL–In your effort below you say that “real money may be handed down” but how can that possibly be when promises to the absolute contrary have been made so many times? Your edifice is built on lies and always has been and you can keep it. Wasn’t so long ago that Merkel was saying that it was out of the question that the IMF should be allowed (repeat allowed) never mind begged to step in.

          • Mark B
            Posted July 30, 2013 at 11:32 am | Permalink

            Joining EFTA and maintaining access to the Single Market via continued membership of the EEA is hardly ‘going it alone’.

            For the EU to survive I think just about everyone realises that the EU must sooner or later move to FULL political, financial and fiscal union. Good luck with that !

            We of course do not want to have anything to do with that.

    • Denis Cooper
      Posted July 29, 2013 at 8:24 am | Permalink

      Indeed, Peter, because in the words of one of our greatest statesmen we are a “proud sovereign nation”, something for which some other nations still have cause to be grateful.

      At least, most of us are; of course in any nation there are always the disaffected, whose disaffection may in some cases shade into disloyalty.

      Fortunately we could identify a lot of them simply by interviewing all those whose names appear on the membership list of the Liberal Democrat party, and others could be picked up through their involvement with the European Movement and similar organisations, and through their words and actions in our Parliament and in the EU Parliament, and so on.

      • Lindsay McDougall
        Posted July 29, 2013 at 1:29 pm | Permalink

        If you want to know something practical for all UKIP members to do, it is simultaneously to take out membership of the Conservative Party (it will only cost you £25) and help to ensure that Conservative Party candidates selected to stand for Parliament in 2015 are properly Eurosceptic. In many constituencies, these candidates will be chosen during the coming year.

        In North East Hampshire in particular, the new chairman, in conjunction with CHQ and the Regional Agent, is about to begin the process of selecting a successor to James Arbuthnot, who is standing down. He has indicated that members joining after 30th August may not take part in the selection process.

        • Denis Cooper
          Posted July 29, 2013 at 4:57 pm | Permalink

          How would that work, when anybody who is known to be strongly opposed to the EU is barred from becoming a new Tory candidate by the national party?

          Sitting MPs are another matter, but the wisest course for anybody else who thinks we should leave the EU would be to conceal their true beliefs about the EU and so slip through the net, and then if elected they can gradually come out of the closet.

          • Lindsay McDougall
            Posted July 31, 2013 at 12:47 am | Permalink

            I understand that more than half of the Conservative Parliamentary Party is of the 2010 intake. I don’t think that Conservative HQ wants to exclude Eurosceptic candidates. Even if it was minded to, HQ knows how unpopular Europhile candidates would be, both with the membership and the electorate.

          • Denis Cooper
            Posted July 31, 2013 at 10:17 am | Permalink

            Lindsay, from December 2010:

            http://blogs.telegraph.co.uk/news/alexsingleton/100067176/cchq-betrays-tory-members-by-counting-better-off-out-membership-as-a-skeleton-in-the-cupboard/

            “Indeed, one Tory politician, who was on David Cameron’s A-List of priority candidates before the last election, told me that his chances of winning over a constituency association would increase dramatically if he joined the Better Off Out campaign, but that Conservative Campaign Headquarters would blacklist him if he did that.

            Another prospective Tory candidate told me that he has asked Better Off Out if he could be placed on a list of “secret” members, because – although he is a committed withdrawalist – the Conservative leadership have made clear that this would cause his political career to be terminated.”

            And contrary to some claims that kind of problem would not be solved by “open” primary elections when an aspirant’s name cannot appear on the primary ballot paper unless they have already been approved centrally.

        • Alan
          Posted July 29, 2013 at 7:29 pm | Permalink

          Are members of UKIP eligible to join the Conservative party? I would hope they are not.

          • Denis Cooper
            Posted July 30, 2013 at 5:43 am | Permalink

            I believe that the Conservative party does not allow a member to also be a member of any other political party, while UKIP does not have the same general rule.

      • Peter van Leeuwen
        Posted July 29, 2013 at 3:22 pm | Permalink

        @Denis Cooper: the LibDems don’t strike me as of the “disaffected” kind. Too much “Pride and Prejudice”on your side?

        • Denis Cooper
          Posted July 29, 2013 at 4:58 pm | Permalink

          Don’t you want to know the identity of the great statesman?

          • Peter van Leeuwen
            Posted July 29, 2013 at 8:38 pm | Permalink

            @Denis: don’t tell me it was Tony Blair 🙂

          • Denis Cooper
            Posted July 30, 2013 at 9:30 am | Permalink

            Of course he only said it, he didn’t mean it.

          • Peter van Leeuwen
            Posted July 30, 2013 at 12:37 pm | Permalink

            @Denis: In time, I’ll tease you with it (that you once called Blair a “great statesman”.

    • handbags
      Posted July 29, 2013 at 1:24 pm | Permalink

      ‘or do you want to go it alone’.

      You’re right – in the end it comes down to confidence – can you stand on your own two feet or do you need support.

      It’s the basic split in society – are you right-wing or left-wing.

      I think more and more people are beginning to realise that making your own decisions in your own best interests is, ideally, the right way to go.

      In the end it’s not about money it’s about self-respect.

      Co-operate if it’s in your interests – but otherwise you should paddle our own canoe.

      • Peter van Leeuwen
        Posted July 29, 2013 at 3:14 pm | Permalink

        So far we agree. Just one question: Do you think that all these continental countries (Germany, Italy, France, Poland, The Netherlands, etc. ) are lacking self-respect????

        • Handbags
          Posted July 30, 2013 at 10:22 am | Permalink

          I think they’re frightened.

          The former communist bloc countries (the European ones at least) are full of optimism, they feel the future is warm and bright – but I don’t think the older European nations feel that way at all.

          I think they had self-respect and pride at one time, long ago – but now they huddle together around the camp fire trying to keep warm.

          As I said earlier ‘can you stand on your own two feet or do you need support’ – I think running down the nation state and promoting a larger EU shows clearly that their self-confidence has gone.

          • Peter van Leeuwen
            Posted July 30, 2013 at 12:40 pm | Permalink

            @Handbags: Let us agree to disagree on that aspect (the self-respect and confidence bit)

          • Denis Cooper
            Posted July 30, 2013 at 4:45 pm | Permalink

            Around 2000 I attended a local meeting about Poland’s planned accession to the EU, organised by a chap who started off by saying that he was actually had ancestors who were Poles who had come to this country early in the 19th century, and hence his particular interest. He had got some excellent speakers, including an attaché at the Polish embassy. During the coffee break I took the attaché on one side and asked him straight out why on earth Poland was joining the EU when it only just escaped from Soviet domination. His answer was to shrug his shoulders and say “We have Russia on one side and Germany on the other, what else can we do?” And that is the problem, that countries have been left with little alternative but to become part of the EU, and incidentally later become part of the eurozone as well, as required by their treaties of accession to the EU. It should be understood that the UK government must take a substantial share of the blame for allowing that situation to develop. Or, as some would no doubt see it, take a significant share of the credit.

    • Timaction
      Posted July 29, 2013 at 2:00 pm | Permalink

      Go it alone!! Yes please Peter. The EU has always been about “ever closer (political) union” and trading with it was a means for our disingenuous political leaders to hide it from the sheeple. They are still at it to this day. Trade and friendship, nothing more. We don’t want foreign unelected dictators ruling us and imposing more and more directives and legislation! Mass migration from the East undermining our 1000,000 young peoples chances at employment and undercutting the indigenous populations salaries. £11 billion net contribution for a £50 billion net trade deficit. No more!!

      • Peter van Leeuwen
        Posted July 29, 2013 at 3:18 pm | Permalink

        @Timaction: quite a bit of misinformation and emotion there. Do I have to be concerned that the “sheeple” will be so sheepish to believe all that? I wish you some better informed debates showing both sides of all the issues, before you all cast your referendum vote in 2017, in case that referendum will take place.

        • Brian Tomkinson
          Posted July 29, 2013 at 4:50 pm | Permalink

          Peter,
          Perhaps you would care to specify just what “misinformation” was in Timaction’s comment as I cannot see any.

        • Timaction
          Posted July 29, 2013 at 6:34 pm | Permalink

          What disinformation Peter? 400,000 fishing jobs lost due to the Common Fisheries policies, £9billion in increased bureaucracy form EU legislation/directives, billions more in Common agricultural policy to subsidise inefficient farmers, mainly French. £ Billions in health, housing, tax credits, education for 3 million Eastern Europeans.
          £11 billion net for the deficit as above. It was always about political union never about trade. Ask China, Japan, USA etc. who all trade with the EU but are not paying members to subsidise foreign infrastructure and farmers, whilst we pay 6.5 million people who are of working age, benefits whilst we import cheap labour from Eastern Europe. Madness. I’m a patriot that’s why I care Peter.

  2. Brian Taylor
    Posted July 29, 2013 at 5:59 am | Permalink

    Would you agree that with a larger economy than Norway and the Swiss we can obtain a better deal than both those countries by joining EFTA and EEA that would allow access to the EU single market without the regulations that hold back our trade with the rest of the world.

    • Leslie Singleton
      Posted July 29, 2013 at 8:11 am | Permalink

      Brian–Agree entirely–Very hard to see how anyone could disagree–Don’t forget that Switzerland is surrounded by the EU yet they manage spectacularly well

    • Denis Cooper
      Posted July 29, 2013 at 8:27 am | Permalink

      More importantly, Norway and Switzerland are net exporters to the EU, while the UK is a net importer from the rest of the EU. I don’t think we could be expected to pay an annual fee for the privilege of running a massive trade deficit.

      • Peter van Leeuwen
        Posted July 29, 2013 at 9:36 pm | Permalink

        @Denis: a trade deficit means not being so competitive, it’s the UK’s own doing. In spite of your massive devaluation this has not become much better, although very recently you industry is picking up. Now that the rest of the EU runs a service-trade deficit with the UK, we’re not going to blame the UK for it either, that would only show unwillingness to become better ourselves. Your fee is no higher than that of others, in fact your gross contribution per capita is thelowest on any EU country I’ve learned.

        • Denis Cooper
          Posted July 30, 2013 at 9:36 am | Permalink

          Why we have a trade deficit with the rest of the EU is not the point, the fact that it exists is the crucial difference between our case and those of Norway and Switzerland. If we ever became a net exporter to the EU, like those countries, then we might perhaps discuss some kind of fee for our market access; until that happened the other EU countries should really pay us for their access to our market.

          • Peter van Leeuwen
            Posted July 30, 2013 at 2:34 pm | Permalink

            @Denis Cooper: You probably don’t quite mean what you say there, but anyway, this “fee” (the 1% of GDP contribution) is about other things really: Some of these countries (and regions) are worse of than we are and by channeling money through structural funds we help make these areas better and thus create future markets for us. Of course it could be argued that some of these structural funds don’t need to pass through the EU but can be distributed better nationally but that is not the issue here.

          • Denis Cooper
            Posted July 31, 2013 at 10:32 am | Permalink

            I certainly do mean it, Peter. If the EU thinks it’s reasonable to expect Norway to pay a fee so that it can freely sell goods and services into the EU, imports into the EU from Norway exceeding exports to Norway from the EU, then logically the EU should not be surprised if the UK demanded a fee so that EU countries could freely sell goods and services into the UK, imports into the UK from the other EU countries exceeding exports to those countries from the UK. As for using Brussels as a channel for our international aid, forget that, whether the recipients are inside or outside the EU.

    • uanime5
      Posted July 29, 2013 at 6:11 pm | Permalink

      Given that neither China, Japan, and the USA was able to negotiate the type of deal you’re recommending that the UK asks for I’d have to say that there’s no chance of the UK getting it.

      • Edward2
        Posted July 29, 2013 at 9:22 pm | Permalink

        Good standard of living in USA China and Japan, Uni.
        Not so good for the huge numbers of unemployed in the EU.

  3. outsider
    Posted July 29, 2013 at 6:09 am | Permalink

    Would it be too much to expect the FCO to ensure that any future EU-US free trade agreement (if it ever happens) covers all individual states that are currently members of the EU, whether ir not they are in the future? Yes, I guess it would be.

  4. alan jutson
    Posted July 29, 2013 at 6:14 am | Permalink

    The problem John is that the EU wants to try and insulate itself from the rest of the World in a sort of protectionist manner, and to live in its own bubble.

    I would fully agree that free trade is perhaps the way forward, but in the past do remember that some Countries have been accused of dumping their goods on others at a price which is simply not possible or sustainable.
    In addition some governments have seen import duty as a simple means of additional taxation for revenue raising.

    Clearly it would be better if everyone played fair and square, but simple rules/regulations/sanctions are perhaps needed against those who will try to abuse the spirit of free trade.

    The problem the Eurosceptics have is in getting big business who are on their side, to speak out in support of out and to help eliminate the fear of change.

  5. margaret brandreth-j
    Posted July 29, 2013 at 6:34 am | Permalink

    You mention many possibilities which seem sensible, but would the co traders all agree with you? This is a question and not a barrier to your suggestions.

    Reply If we elect a UK government with the political will to negotiate, I am sure the other EU countries will have every incentive to come to a mutually sensible arrangement.

  6. Anonymous
    Posted July 29, 2013 at 6:45 am | Permalink

    Japanese motor manufacturers ought to be told that we want to be able to build cars for Europe but not at ‘any’ cost.

    Weigh up the amount of jobs involved and whether they are worth the loss of our sovereignty. Britain has taken far bigger hits than this in industry over the last century.

    • Mike Wilson
      Posted July 29, 2013 at 7:42 am | Permalink

      @Anonymous ‘Japanese motor manufacturers ought to be told that we want to be able to build cars for Europe but not at ‘any’ cost.’

      No, Japanese motor manufacturers ought to be told that we import a large number of Mercedes, BMW, Audi, Volkswagen, Citroen and Peugeot cars and that France and Germany are not going to want us to put import tariffs on their cars. We will be able to sell ‘our’ Hondas, Toyotas and Nissans (makes you want to weep eh? What about ‘our’ Austins, MGs, Triumphs etc. (Okay, I know they were crap.)) on exactly the same terms as we de now.

      • sjb
        Posted July 30, 2013 at 8:11 am | Permalink

        In his Chatham House speech, ex-PM John Major suggests a Brexit may lead to us having to pay a 10% external tariff on our exports to the EU. He then wondered whether foreign vehicle mfrs based here would relocate to avoid the tariff.

        Incidentally, he also claimed “we export five out of every six cars made in the United Kingdom”, but it was not clear to me how many of the five were destined for other member states.

        • Denis Cooper
          Posted July 30, 2013 at 10:17 am | Permalink

          You really think that we should listen to “game, set and match for Britain” Major about this?

        • Mark B
          Posted July 30, 2013 at 12:08 pm | Permalink

          John Major is not taking into account that any Brexit would entail continued membership of the EEA via EFTA.

          EEA membership ensures access to the Single Market. I think the former PM is indulging in a bit of FUD.

          • sjb
            Posted August 2, 2013 at 8:54 pm | Permalink

            @Mark
            He said it was “probably true” that the UK could remain in the Single Market, but thought this would come at a price (using what Norway has to pay as an example) and that “we are likely to face tariffs”.

  7. Denis Cooper
    Posted July 29, 2013 at 6:46 am | Permalink

    “The rest of the EU would be as keen as the UK to ensure continuity in trade when the UK renegotiates its relationship.”

    Well, unless the governments of those countries are really stupid and malign.

    It’s interesting that the Japanese government has apparently formed the considered view that the governments of the other EU member states are indeed so stupid and malign that they would be willing to sacrifice a consistently healthy trade surplus with the UK by impeding trade if the UK were to leave the EU.

    In which case, there is the interesting question of why we are allowing those stupid and malign foreign governments to have an increasingly large hand in governing our country through the EU.

    And that same question could be posed to our Foreign Office: if you really have such a low opinion of our European “partners” in the EU that you reckon they could turn extremely nasty, irrationally vindictive, if they were crossed, why are you so determined that we should be increasingly subordinated to the EU, eventually to the point where the UK would cease to exist as a sovereign state in any meaningful sense?

    They can’t have it both ways: either these are genuinely friendly countries who would be prepared to continue good relations, including trade relations, once we had left the EU, or at present we have hostile foreign countries exerting a large measure of control over our domestic laws and government; so which is it?

    • Brian Tomkinson
      Posted July 29, 2013 at 7:59 am | Permalink

      Denis,
      Good point. The attitude of the FCO seems to suggest that the EU is an organisation akin to the mafia. You pay your protection money but woe betide anyone who crosses them.

    • uanime5
      Posted July 29, 2013 at 6:17 pm | Permalink

      Japan has a trade surplus with the UK because the UK is in the EU. Were the UK to leave the EU then you shouldn’t be surprise if any Japanese factories in the UK that mainly supply cars to the EU relocate to the EU.

      The UK currently freely trades with the EU because we’re in the EU, so if the UK leaves the EU we shouldn’t be surprised to be treated like any other non-EU and non-EFTA country.

      • Edward2
        Posted July 29, 2013 at 9:20 pm | Permalink

        Japan has a trade surplus Uni, because it sell more into the UK than it allows into its own country.
        Japan has some of the world’s most clever restrictions on imports.
        It has nothing to do with us being in the EU

      • Mark B
        Posted July 30, 2013 at 12:14 pm | Permalink

        And what about Ford factories in Turkey, which have access to the EU even though they are not members ?

        Mini (BMW) is to relocate its plant too the Netherlands, why ? Because they have deemed, like Ford, that it is cheaper to manufacture there.

        Business goes wherever there is profit to be made. EU or non-EU.

  8. Denis Cooper
    Posted July 29, 2013 at 7:16 am | Permalink

    “The UK could have full access to the single market on current terms”

    Unlike most of our MPs I still believe in our national sovereignty and democracy, and I would never accept any international treaty arrangement which meant that any of our national laws could be determined by transnational majority voting over the opposition of our national government supported by our national Parliament.

    So, no, it could not be “the single market on current terms”, because we would need to regain all of the national vetoes which successive governments have abandoned without the consent of the British people, starting of course with the Single European Act.

    I think it should also be understood that the economic benefits of the EU Single Market have been greatly over-rated. Originally it was projected that the Single Market would increase the collective GDP of the member states by 5%; it is doubtful that anything like that has been achieved, and it seems that the costs now exceed the benefits, but even if it was an increase in GDP of 5% that would be a one-off boost roughly equivalent to only a couple of years of natural economic growth at the trend rate of about 2.5% a year.

    As for the planned EU-US trade deal, Cameron is representing that as major progress and implying that on no account must we miss out on this cornucopia by leaving the EU, but on the basis of the published numbers it would at best be a one-off increase of just 0.7% of GDP, equivalent to just a few months of natural growth at the trend rate.

    • forthurst
      Posted July 29, 2013 at 9:54 pm | Permalink

      “As for the planned EU-US trade deal, Cameron is representing that as major progress and implying that on no account must we miss out on this cornucopia by leaving the EU, but on the basis of the published numbers it would at best be a one-off increase of just 0.7% of GDP, equivalent to just a few months of natural growth at the trend rate.”

      It would appear that the US is attempting to create a trading block across the Atlantic and the Pacific in response to the BRICS etc who appear to be pursuing too much independence from the private secret FED and the Pentagon. We could lose far more than we gain by having our trade with the BRICS, which are now the high growth countries, damaged as a result of the US trying to shore up the dollar at any cost and continuously sabre-rattling against countries which wish to trade mutually in their own currencies.

  9. A.Sedgwick
    Posted July 29, 2013 at 7:30 am | Permalink

    On the World Tonight, Radio 4, last week there was a piece about a Japanese Organisation, maybe government, had written an article saying the UK must stay in the EU or risk losing car investment and 140,000 jobs. The usual misinformation and naivety about how trade works but why was it is so important for the BBC to air it and without any rebuttal? If we get a proper referendum at all, 2017 is the likely date. Their bias and poorly controlled finances are well documented, sorting out the BBC could be a serious vote catcher in 2015.

    • uanime5
      Posted July 29, 2013 at 6:20 pm | Permalink

      Just because you don’t like something doesn’t make it false. Japanese companies that are located in the UK but mainly sell cars to the rest of the EU won’t remain in the UK if the UK leaves the EU because they’ll be subject to import taxes (just like they would be if they were in any other non-EU or non-EFTA country).

      • Edward2
        Posted July 29, 2013 at 9:14 pm | Permalink

        And we would straight away add a similar (or even larger) percentage onto French and German imports.
        I think the result would be some rapid backing down.
        I don’t think you’ve ever been in a tough negotiation situation Uni.

        • sjb
          Posted July 30, 2013 at 8:26 am | Permalink

          I think you need to consider the respective bargaining power of the contracting parties. Furthermore, if we still want to remain part of the Single Market then the ‘annual fee’ will be determined by the EU. For example, Norway pays 67% per head of what we currently pay as a full member.

          • Denis Cooper
            Posted July 30, 2013 at 10:37 am | Permalink

            Norwegian politicians are in favour of Norway joining the EU, and having twice failed to persuade the Norwegian people to agree to that they have been doing what such people always do, lacking any respect for democracy, which is to proceed towards their objective by surreptitious steps. Hence the Norwegian politicians have been choosing to accept EU laws when legally Norway doesn’t have to accept them, and they have arranged for Norway to be involved in, and help pay for, EU projects when there is no real need. Hence only a fraction of the money Norway pays is actually for access to the EU Single Market. As a net importer from the rest of the EU, unlike Norway which is a net exporter, there is no reason why the UK should pay any such fee; and having been in the EU and left, rather then having politicians seeking to cosy up to the EU in the hope of eventually joining, there would be no political reason why we should unnecessarily get ourselves involved in the EU’s projects and help pay for them.

          • Edward2
            Posted July 30, 2013 at 4:40 pm | Permalink

            The “respective bargaining power” seems to be in our favour sjb, because France and Germany sell far more to us than we do to them and so have more to lose than us in any tariff war.
            But I don’t feel this conflict will happen as it is in the interests of all nations to trade profitably and easily with each other.
            There may some tough sessions of negotiation but with all sides keen to maintain trading partnerships I do not feel trade wars will occur.

          • sjb
            Posted August 3, 2013 at 4:32 pm | Permalink

            @Edward2
            I am reading Leo Amery’s diaries for 1929-1945 and – in light of your contention that importing more than we export gives us greater bargaining power – I was struck by the editor’s comments about Amery and others living in a fool’s paradise in relation to negotiations with the US: “First, there was the sheer weakness of her [Britain’s] economic position. Between 1938 and 1945 British exports declined from £471 million to £258 million, and imports increased over the same period from £858 million to £1299 million.”[1]

            p932, The Empire at Bay, Barnes & Nicholson (eds)

          • sjb
            Posted August 3, 2013 at 8:16 pm | Permalink

            Are you sure only a (small?) fraction of Norway’s money is to access the Single Market, Denis?

            Major’s exact words were as follows: “Norway as a non-member pays two-thirds [67%] as much per head for access to the Single Market as the UK pays as a full member of the European Union.”[1]

            In 2011, Norway paid £106 per capita; the UK paid £128 per capita.[2] I make that 83%.

            So might it be that the 16% (83 – 67) represents the cost of the EU measures you say Norway has no legal obligation to discharge?

            [1] p5, The Referendum on Europe: Opportunity or Threat?, 14 February 2013
            [2] p22, HoC Library Research Paper 13/42, Leaving the EU, 1 July 2013

      • Denis Cooper
        Posted July 30, 2013 at 5:50 am | Permalink

        You’re begging the question of whether exports of cars from the UK to the rest of the EU would be in any way impeded if the UK was not in the EU, and given that we consistently run a sizeable trade deficit with the rest of the EU that would only happen if the governments of the other EU member were both stupid and malign. Do you think that the governments of the other EU member states are stupid and malign?

  10. oldtimer
    Posted July 29, 2013 at 7:36 am | Permalink

    The motor industry is a bell weather case. Before the UK joined the Common Market, the UK motor industry faced a significant tariff wall when exporting the CM. It was a key reason for the expansion of Ford of Europe`s operations inside the CM after de Gaulle`s veto. Today the situation is very different, as you point out, because the UK is now one of the most important European markets for the VW group sales (in particular VW, Audi and Porsche) and for BMW and Mercedes sales.

    • uanime5
      Posted July 29, 2013 at 6:22 pm | Permalink

      Being one of the most important European markets won’t save the UK. The USA is far more important but they’re subject to tariffs and quotas.

      • Edward2
        Posted July 29, 2013 at 9:18 pm | Permalink

        You always forget Uni that the UK would add similar or larger tariffs onto EU imports into the UK as soon as this happens.

      • oldtimer
        Posted July 30, 2013 at 8:36 am | Permalink

        The UK is an export only market for VW, Porsche, BMW and Mercedes (apart from acquired brands like the MINI). In the USA they have set up significant manufacturing operations to satisfy the US market. The business models are entirely different.

  11. peter davies
    Posted July 29, 2013 at 7:54 am | Permalink

    I think the car market argument is a red herring. Why else would Ford decide to move its Transit production from Southampton to a country outside the EU with the help (apparently) on EU money “because its cheaper” ?

    The likes of the BBC needs to grow up and get their researchers do some proper investigation on the legal trading position of EEA and WTO rules with regards to how trade works for a start rather than help spread misinformation – senior politicians need to do the same and stop all this “million jobs” drivel.

    In fairness to the Tories they are the only main stream political group in the EU who are doing a root and branch review of the balance of EU competencies. Another review of the legalities of trading without barriers in the EEA would no doubt complete the picture. As I understand it the UK would still be bound by directives on goods that are traded with the EU but surely that is just the same as anyone trading with the USA or any other country – “we have no say on their rules” – so what?

    There are countless examples of countries outside or around the fringes of the EU who trade with it without tariffs or quotas – I just cant see why the UK would be any different.

    • uanime5
      Posted July 29, 2013 at 6:35 pm | Permalink

      Ford is moving to Turkey because employee costs are lower and Turkey is in a custom union with the EU. Without this Custom Union Ford wouldn’t have moved to Turkey.

      Given that the WTO couldn’t do anything to stop US tariffs on EU steel, despite twice ruling them illegal, it’s clear that it won’t offer the UK any protection from any EU tariffs.

      You are correct that the UK can trade with the EU by becoming a member of the EEA, though we would be bound by almost all directive including directive on working conditions and criminal law. So effectively we’d be in the same position but with less influence over EU law.

      Finally many countries that trade on the fringes of the EU do so on the EU’s terms. So they have to obey most EU directives even though they have no influence over these directives.

      • Denis Cooper
        Posted July 30, 2013 at 5:53 am | Permalink

        The UK is already a member of the EEA; and, no, those “countries on the fringe of the EU” do not have to obey almost all EU Directives, as you have been told before.

  12. Brian Tomkinson
    Posted July 29, 2013 at 8:12 am | Permalink

    Those determined to keep us in the EU, led by Cameron and Hague, will leave no step unturned to ensure that the electorate, if ever given a mandatory referendum on EU membership, will vote to stay in. The scare propaganda has already started. Just as in 1975, the public is being told it is all about trade and we cannot survive alone. Just as then, there is no mention of the loss of political sovereignty by the europhiles. The deceit goes on.

  13. Atlas
    Posted July 29, 2013 at 9:07 am | Permalink

    Agreed, John. But you are up against a determined foe who wish us ill.

  14. English Pensioner
    Posted July 29, 2013 at 9:24 am | Permalink

    Whether our trade with the EU is at risk is irrelevant. The EU is a declining market and our businesses should be looking at the expanding markets and are discouraged from doing so by all the EU rules and regulations. These have to be met regardless of whether companies are selling to the EU or elsewhere. Without the EU, we could just meet the needs of potential customers without all the EU regulation overheads which make European products uncompetitive.

    • uanime5
      Posted July 29, 2013 at 6:36 pm | Permalink

      While you might want to ignore EU laws on working conditions, those who have to work generally appreciate having rights that protect us from abusive employers.

      • Denis Cooper
        Posted July 30, 2013 at 6:14 am | Permalink

        That’s assuming that they can actually find a job. If their employment has been made too expensive then they will no longer have employment rights, only whatever rights may attach to being unemployed, and then they (you) will have no need to worry about their (your) employer being abusive.

  15. Bryan
    Posted July 29, 2013 at 9:24 am | Permalink

    You are correct in that our trade with the EU is most unlikely to suffer and hence the dependent jobs.

    We import some 70% of our goods from the EU and export some 50% to it. This latter figure is misleading because two fifths of our EU exports are in fact shipments to Rotterdam for onward shipping to the rest of the world, or so I have read.

    The big problems regarding a renegotiation with the EU are threefold:-

    1. Without invoking article 50 then no meaningful discussions will take place

    2. Mr Cameron has already stated that he will campaign to stay in the EU regardless

    3. The F O and the BBC are hellbent on keeping us in the EU so will bias the debate

    I think MR Cameron is playing a canny hand which could only be matched by Dynamo

    • uanime5
      Posted July 29, 2013 at 6:43 pm | Permalink

      Given that only 8.9% of the UK’s total exports go to the Netherlands it’s impossible for two fifths of EU exports (20% of total exports) to be sent from Rotterdam to the rest of the world.

      • Edward2
        Posted July 29, 2013 at 9:27 pm | Permalink

        You are playing with figures Uni.
        The fact remains that exports from the UK which go through Rotterdam are incorrectly counted as EU imports in official EU figures despite their final destination often being outside the EU.
        You regularly use this resulting inflated figure to bolster your arguments on the EU despite knowing this fact only too well.

  16. Neil Craig
    Posted July 29, 2013 at 10:11 am | Permalink

    According to Civitas the European Economic Area Treaty (all EU members plus Norway, Iceland and Lichtenstein) is one signatories cannot legally be expelled from (though we can choose to leave). Thus all the scare stories pushed by Mr Clegg and his ilk about the EU choosing to cease trading with us are false. This would be illegal. We have the Norwegian opt out option automatically instantly any time we want it.

    • uanime5
      Posted July 29, 2013 at 6:46 pm | Permalink

      Firstly it wouldn’t be illegal to stop trading with the UK. Tariffs and quotas are perfectly legal.

      Secondly Norway doesn’t have the option to opt-out of EU law. At present they’ve only once failed to implement an EU directive and are facing sanctions because of this.

      • Neil Craig
        Posted August 1, 2013 at 11:44 pm | Permalink

        1 – It would be illegal under EU law to tear up the treaty. That’s the point.

        2 – Norway has not so much an opt out as no requirement to accept the vast majority of EU law. Just as the USA doesn’t have an opt out from EU law, or Chinese law for that matter. Your ignorance is showing.

  17. Pleb
    Posted July 29, 2013 at 11:41 am | Permalink

    Slightly off topic.
    Is the new forth plinth statue in honour of our Prime Minister?

  18. Lindsay McDougall
    Posted July 29, 2013 at 1:17 pm | Permalink

    Yes, indeed, free trade is in all ways preferable. Let us also remember that we would escape from the Working Time directive and all of the social legislation, and at least some of the unnecessary harmonisation controls. We must also remember that the existence of the Euro is not in our interest and work unceasingly to detach as many members from it as possible.

    Now would be a good time for British Eurosceptics to write to the German Eurosceptic Party pointing out the inability of Germany to bail out all of the fiscally incontinent Euro zone members, so that the only way out of the dilemma is for the ECB to guarantee to print enough additional Euros by one means or another (“Believe me, it will be enough” as the ECB chairman said). The German election is in 2 months time and we want the German Eurosceptic Party to poll more than 5% of the vote. Anyone fancying a bit of sport could copy their letter to Angela Merkel.

    • uanime5
      Posted July 29, 2013 at 6:51 pm | Permalink

      How exactly is escaping from the Working Time directive, which prevents employers making their employees work more than 37.5 hours per week, a good thing?

      Just because the UK doesn’t like the Euro doesn’t mean that other countries don’t like it. So don’t expect any to detach any time soon.

      I doubt that the German anti-EU party will benefit in any way from being told what they already know. Though given that most of the eurozone is recovering there’s far less chance of more euros being printed.

  19. Acorn
    Posted July 29, 2013 at 1:35 pm | Permalink

    “There needs to be more debate explaining the crucial differences between free trade areas, customs unions and the single market.” Yes please. The “single market” I have understood to be a single set of technical standards for plug and play goods and services across the EU. It’s not a free trade area as you will quickly learn if you have ever had to munch your way through the Uk Trade Tariff system, https://www.gov.uk/starting-to-import/overview . The latter will show you it is definitely a customs and fledgeling taxation union.

    “You do not need hundreds of common laws in order to trade with each other.” Apparently you do. The BIS has gone native, they can’t get enough of this EU stuff. https://www.gov.uk/innovation-standardisation–4#standardisation-infrastructure .

    2017 will be too late, because, ”We are the Borg EU Collective. Lower your shields and surrender your ships. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service us. Resistance is futile.” Where is our Jean-Luc Picard? I think we can safely assume that the coalition front bench has already been assimilated.

  20. uanime5
    Posted July 29, 2013 at 7:01 pm | Permalink

    The danger of the latter is it entails the erection of substantial barriers and costs to doing business through a large legislative and regulatory programme. Worse still, all these extra costs are imposed on UK exporters to non EU destinations as well as to EU ones.

    I take it you’re referring to laws on employee rights, working conditions, and how to dispose of hazardous materials. Given that many companies supply the UK, the rest of the EU, and outside the EU it would be even more onerous if there were separate regulations for EU and non-EU exports.

    To those who think the current single market is better than relying on the international trade framework, it should be possible for the UK to belong to the single market from outside the federalist Treaties.

    Are there any countries that currently able to do this? If not then it’s unlikely that an exception will be made for the UK.

    The German industry, I am sure, will want access to the UK market on at least as good terms as it enjoys today, so there should be no great worry about this issue.

    They seem to be doing okay in other countries despite not having access to them on such good terms as they enjoy in the EU.

    • Denis Cooper
      Posted July 30, 2013 at 5:58 am | Permalink

      “it would be even more onerous if there were separate regulations for EU and non-EU exports.”

      There are already separate regulations, those set by countries outside the EU for their own domestic markets which have to be met by importers.

      “Are there any countries that currently able to do this?”

      Of course, the three EEA members which are not EU members.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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