Friday, 3 June 2016

Britain has nothing to lose by leaving the EU

This blog has spoken much of what is happening outside the confines of the EU. For clarity I am going to explain it in simple terms without going into too much detail.

Everything we do is regulated. And while that's a pain, the alternatives are worse. Having regulations means we can buy things in confidence. It means that systems work better. In order to keep this post shorter I won’t elaborate. If you do not accept that basic premise, we have nothing much to talk about. This post is for grown-ups.

In order to create a single market (an area where we can freely trade in goods and services) we need to ensure that we are all working to the same rules. That's not a bad thing. Or at least it's not a bad thing if it confines itself to those areas concerning trade in goods and services. This is why the whole world is moving toward a common global framework for rules, standards and regulations. Most of them underpin what we mistakenly believe to be EU regulations.

By operating to the same rules, by agreeing that standards a upheld adequately, we can do away with unnecessary paperwork. The EU has gone further and removed tariffs making the EU notionally a place where trade is conducted with greater ease than anywhere on the planet.

So you might ask why we would want to be outside of that? Well, it means giving up quite a lot of control. Too much. If we operate to the the global standards and rules then we can still be part of that single market only we retain much more control over which goods we accept and which rules we adopt. By way of being free of the EU, we are then allowed to speak on our own behalf where the rules are made. We can opt out of rules which are either weaker or inappropriate. The EU will not let us do that presently. If we complain, they ignore us.

Some argue that there is always a trade off. That's fine were we simply speaking of trade rules to facilitate better and faster trade. But the EU wants to be more than that. It is more than that. Yet persistently our government pretends otherwise. What the EU wishes to be, and to many extents already is, is a supreme government for Europe which has influence over matters more far reaching than trade.

In this it dictates on social policy, labour rights, environment, you name it. In so doing it makes it harder for us to adapt to changes. Once something is decided at the EU level it is next to impossible to repeal or change. That means bad policy stays bad policy. And in the most basic terms, people who are not able to change the rules they live by do not live in a democracy and when we cannot reform policy things stop working.

And because the EU does not let us open up trade talks we have to wait for the EU to decide who we may trade with and on what terms. That makes it harder for us to adapt to changes in the global economy and that means our emerging industries within interests outside the EU suffer. They say that's ok, because most of our trade is with the EU. Except that most of our trade is with the EU specifically because it's harder to expand trade globally.

What we could have were we outside the EU is trading independence with a real say in the rules and more agility where it matters. This is now a problem for us. It's a problem because the world is now ramping up its efforts to bring down non-tariff barriers. We are working toward an ever more universal rules based trading system yet the EU is ever keen to shut out the rest of the world preferring only to allow access via its own specific trade deals like CETA and TTIP. That means Africa stays poor. It is expensive and difficult for them to export their goods to the EU.

The consequences of Africa staying poor naturally means more wars, more famine and more migration. And rather than building good governance through the establishment of rules based trade as the WTO is doing, the EU perpetuates the cycle of foreign aid dependency. While this addresses humanitarian concerns, it is short termism which ultimately does more harm than good.

What we leavers want is to break out of the EU so that we can join in global efforts to enhance trade and open up new export opportunities, using our aid budget to help build infrastructure in lesser developed countries. We already do this but not on the scale we should and under EU direction. It's unaccountable and we don't see the benefits.

Because the EU wants to become that supreme government for Europe, creating a state in its own right, it sees the development of a global system of free trade as a threat. If we have a global single market then much of the rationale for the EU vanishes. We don't need it to make our laws and we don't need it to tell us what to do. We are a modern, progressive country and we can govern ourselves.

Because the EU sees a global rules based system as a threat it increasingly attempts to control the agenda. But as more countries sign up to it, the EU is increasingly losing influence and by way of blocking progress, it is not actually very popular. It is regarded as a bully and when it does get its way in dismantling African tariffs, it can often have damaging results.

Developing states need the revenues because domestic tax collection is poor and the people themselves are poor. And so the relationship is asymmetrical. The EU may dump its own products but Africa struggles to export to Europe. We can change that if we are not in the EU, not least because it weakens the EU.

In this we already have many friends globally. We can build alliances which can hold the deciding vote in global forums. Or we can even choose to cooperate with the EU. But by breaking out of the EU, the global forums become less dominated by dictatorial giants. We want a global community of equals rather than three superpowers throwing their weight around.

More to the point, the way the global system works is we have incremental agreements on individual product classes and services. They are easier to agree, can be concluded faster and are easier to reform. It's more fluid, more agile and if we can have selective opt outs then it's more democratic too.

The EU on the other hand prefers to have it pushed through all in one go. That means trade deals take several years and they stay pretty much as they are for all of time. This is the old style. Bilateralism. Stitching up agreements between two parties. The way things are done outside the EU is on a multilateral basis with several parties each having their own say. Of course the Eu is at those tables too but that means small states like New Zealand and Norway get a say, but we as the world's fifth largest economy, have to do as we are told by the EU.

That said, I would be lying if I said there were no disadvantages to leaving the EU. It means if we choose to have different rules on some products and services then we will have to pay tariffs to export to the EU. This is a problem for Norway. But because Norway can trade independently, while it pays tariffs on salmon exports to the EU, it is free to expand deals with the USA, Russia and Japan. That is why it has a world class aquaculture sector.

It means the Norwegian government must do a cost benefit analysis. But what that means is that they have the right to choose. And actually, the fact that the EU charges so much in tariffs to export there tells you just how interested in free and fair trade the EU is. Not a very much. The EU uses tariffs as a means of protecting its own markets which means our food is more expensive than it should be. We are not globally competitive.

So why doesn't business back Brexit? Well, rather a lot do. Those who only export to the EU are worried that their goods may be subject to paperwork and tariffs but actually this only applies to a fraction of the goods and services we produce. As far as the rest goes, because we subscribe to global standards and regulations means we have the right to access the EU market. Remaining as part of the European Economic Area after we leave the EU means that we still have more or less the same trade with the EU. Some pretend otherwise either through ignorance or sheer dishonesty.

The dishonesty of it is pretending the EU is merely a trade bloc or an alliance. But it really isn't. There are those who will tell any lie because they believe in the ethos of the EU and believe it to be a universally good thing upon which our prosperity and peace depends. They have bought the propaganda.

As much as the EU is a wholly malign influence on Africa and a large part of the cause of migration, it is also holding all of Europe back, preventing us from reforming beyond the systems built in response to the last world war. It doesn't keep the peace either. It was assumed we would go to war over material resources. Coal and steel. Such is no longer a concern. The world is a very different place to the one in which the EU was created. And because it cannot see beyond its own dogma it will not allow reform of any kind.

The truth is that Britain doesn't need to be in the EU. We will do better if we leave. The process of leaving is no small undertaking and it is a challenge but a very necessary process otherwise we risk sliding into irrelevance and we will lose influence not least because the EU itself is losing influence. Events are overtaking it and it cannot break out of old habits.

There is so much more to discuss, but like I say I wanted to keep this post short. I have already failed in that, but I implore you not to be fooled by politically motivated scare tactics or blinded by the dogma of the last century. Britain can be a force for good in the world and we can show leadership at the European and global level if we leave the EU. We can't while we are stuck inside it strangled by obsolete ideas and bogged down trying to patch up a bad idea. There is real potential to prosper outside the EU and the very idea of it is exciting to me. We have an amazing opportunity that we likely won't see again. We would be fools to turn our backs on it now.

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