Friday, 10 June 2016

Why settle for just a European single market?

The EU is a notoriously difficult market to gain access to. It is massively protectionist either through tariffs or non tariff barriers. The europhiles are right when they say it would be a lot harder to trade with the EU if we left the single market. And it's why we will not leave the single market.

But because the EU is a difficult market to access Africa suffers - and it's why our food is more expensive than it should be. It is also one of the reasons we are seeing migration from Africa.

Some say we should take the risk and leave the single market. This is the wrong approach. We should not choose between African trade and EU trade when we can have both. By leaving the EU and staying in the single market we have the best of both worlds.

As outlined, there is no point in leaving the single market. Why bother deviating from the rules when everybody else is signing up to the same rules that underpin EU regulations? What we should do from outside is to help grow the single market, using our aid budget to bring lesser developed nations up to speed, helping them to comply and facilitate trade. We can then act as a back door into the EU internal market.

We are evolving towards a global rules based trading system where even the EU's own rules are now subordinate. The EU is mindful of this which is why we have seen increased trade activity like CETA and TTIP. These are attempts to head off the evolution of an organic global rules based market and extend the garden walled market of the EU where it controls access to it.

As bad as that is for global trade it's also bad for us in that it takes far too long, is done in blocs instead of increments and is largely designed to be exclusive to anyone who isn't dancing to the EU's tune.

To many that sounds appealing, to have a European hegemon calling the shots, but it's only to our advantage if we can influence the speed and direction in which it travels. Trust me, we don't. There's a queue, and we're not at the top of it at the moment.

If we have concerns or issues we need raising at the top tables we must submit our concerns to the EU which may or may not be put forth depending on what the Commission thinks and whether our interests are in line with theirs. Everyone who's not in the EU though, has a direct line to the top tables and right of initiation - and a free vote and veto.

The IMO Facilitation Committee (FAL) working to remove unnecessary formalities and “red tape” in international shipping is just one area where we could seriously improve matters. The Committee ensures that the right balance is struck between maritime security and the facilitation of international maritime trade. This committee also implements all aspects of the Convention on Facilitation of International Maritime Traffic 1965. New Zealand can make a submission on any item in the agenda. We can't. We're in the EU and we must go through the middleman to retain the "purity" of the EU ideal.  It's dogamtism over pragmatism again. It has consequences.

Not forgetting that outside the EU, as much as we can act independently we can work with alliances. Efta along with the UK becomes the world's fourth largest bloc after Brexit. We would be more agile and more democratic than the EU. There is absolutely nothing that says we must work alone. We are not isolated. The following extract from The Palgrave Handbook of EU-Asia Relations is illuminating:

What this shows is that, especially as a larger and more important economy than Australia, we can be leaders in coalition building on international trade forums. As much as anything this makes us the kingmaker in any dispute between the US, EU and China. That is leverage we would never have inside the EU. We would be the deciding vote. It is ironic that supposedly "isolated" Australia has done more to reform the EU Common Agricultural Policy than Britain has from with in over the last forty years.

Britain is more than large enough to act as a broker and facilitator in global forums. It's our expertise and soft power that means we punch above our weight. We could be building a global single market, wresting it from the EUs control to bring about a multilateral system which no-one has control over. We will find many allies in doing so. In more ways than one the EU's intrusion in world forums is most unwelcome.

The EU is fixated with preserving the EU walled garden ideal, creating barriers in order to complete its supranational agenda. It continues to do this in spite of having been overtaken and superseded by events and technology. We are locked into an idea fro the last century which stands in the way of achieving something far more potent. Brexit it the gesture that makes this possible and we can reshape and reform Europe in ways that are presently impossible.

We have to modernise our thinking and ditch euro-parochilaism lest Britain and Europe become increasingly irrelevant to the process of globalisation. The EU places its priority efforts on opening up transatlantic trade for the sake of a fading market of 330 million when there are markets of billions in Africa and India. Its bloc deal approach leads to delays and stalls which means we persistently lose out. Pegged to the speed of the slowest ship in the convoy.

Economists all too often mistake market size as an asset in multilateral trade. It isn't. Soft power and agility yields more benefits and the process is faster. They also assume that being out of the EU necessarily means we won't cooperate with the EU and that we will treat it as an adversary. Brexit just means we have a choice which partners we choose and to what end. That way we are working to optimise trade rather than toward the dogmatic supranational EU ideals.

The short of it is, Britain's continued membership of the EU is preventing more radical European reform and is standing in the way of measures which could supercharge global trade. Voting to remain is a vote to maintain an economic deadlock with only anaemic growth. Brexit is worth $60 billion a year through trade facilitation. What on earth are we waiting for?

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