During our ongoing discussions with people on street stalls surrounding the EU Referendum a number of questions keep coming up.
Below, Gerard Batten MEP dispels the myths created by the Remain campaign about the dangers of leaving the EU
1) Would leaving the EU endanger jobs and trade, and could the EU put up trade barriers against the UK?
When we leave the EU it cannot put up arbitrary trade barriers against the UK as that would against World Trade Organisation (WTO) rules, which all EU countries agree to and which govern world trade. And even if they could why would they want to? We have a massive trade deficit with the EU – they sell us far more than we sell them.
Britain currently exports goods and services to the EU to the value of £228.9 billion, whereas their exports to us amount to £290.6 billion: therefore we have a trade deficit with the EU of £61.7 billion. Germany, Spain, France and Italy etc.will still want to sell us their cars, wine and holidays etc. Trade will continue as normal. [i]
And remember, Britain is the fifth largest economy in the world and we are a world trading nation: and while we have a trade deficit with the EU we have a trade surplus with the rest of the world. Our trading success lies in four hundred years of experience; English being the international language of business and science; and the trust that foreign companies put in the English legal system and contract law.
2) OK, but what about the EU’s Common External Tariffs?
The EU was formed as a Customs Union, not a Free Trade Area; it erected certain trade barriers against non-EU countries known as the Common External Tariffs. However, the World Trade Organisation has been negotiating down trade barriers internationally for many years, and these are now generally low. The pro-EU organisation British Influence states that “UK exporters would still have to pay 15% on average for food and 10% on cars to trade with the EU”, [ii] but this just scaremongering. Since the EU sells Britain far more than we buy from them it would not be in its interests to impose these tariffs even if they could, since we could impose the same tariffs on the goods they sell us.
The ‘Eurosceptic’ organization Business for Britain issued a report that says that the tariffs borne by British exporters if we were outside the EU on exports to the EU itself (even if they were applied) would only be an average of 4.3%. Business for Britain calculates that the total costs to business would be lower than the current UK net contribution to the EU budget (which is of course is rising). Outside the EU it would be cheaper for the British government to pay exporters’ tariffs for them than rather than paying into the EU budget. Even so, it would not be in the EU’s interests to impose the Common External Tariffs on UK exports since it if we did the same thing it would damage their trade more than ours.
3) Would leaving the EU exclude Britain from the Single Market?
The EU and the Single Market are not the same thing. Norway, Iceland and Liechtenstein are members of the Single Market but not the EU. The EU has 28 members, the Single Market has 31. But even so, we don’t need to be in the EU or the Single Market in order to trade with it. . Many countries trade with the EU without finding it necessary to join the EU or the Single Market, for example China, India, Japan, the USA, the list is endless. World Trade Organisation rules prevent the erecting or arbitrary or unilateral trade barriers. Outside the EU Britain could negotiate a trade deal with the EU from a position of strength.
4) But what about the international trade deals that the EU has negotiated with the rest of the world – would we not be excluded?
Britain is the fifth biggest economy in the world, and a major trading nation. Outside the EU those countries who signed the trade deals with the EU would surely want to continue mutually beneficial trading arrangements with the UK. They would have a great incentive to quickly agreeing a continuation of trade on the same terms. When Britain regains her seat on the WTO and control of our own international trade policy we could also no doubt negotiate better trade deals for ourselves – as we did it for hundreds of years or more before we joined the EU.
5) But isn’t 50% of our trade with the EU?
No. This figure is exaggerated: it only refers to international trade: exports and imports. According to the Government’s Pink Book (2014) [iii] 44.4% of our total exports in goods and services were to EU countries. This figure is reduced when we take into account the so-called ‘Rotterdam effect’. Exports first landing in Rotterdam are counted as exports to Europe even when they are destined to pass on to other countries outside the EU such as China. Even a conservative estimate says the Rotterdam effect reduces the total figure to about 42.8%. So it is fairer to say that just under 43% of our international trade is with the EU.
Office of National Statistics figures show that only 15.6% of UK businesses are concerned with exports and imports. Of these no more than 5% trade with the EU. [iv] While approximately 20% of our economy is concerned with international trade approximately 80% of the economy is purely domestic within the UK. Of the 20% concerned with exports only approximately half of that goes to EU countries – and yet 100% of our businesses have to comply with EU laws and regulations.
Britain’s trade with the EU has been declining over the last twenty-five years. In 1999 54.7% of our international trade was with the EU. By 2014 that had reduced to 42.8% And again, to repeat, while this trade is important to Britain it would not be endangered when we leave the EU as it cannot put up arbitrary trade barriers against the UK.
6) Is it true that 3 million jobs depend on trade with the EU?
This old chestnut continues to raise its head despite being discredited long ago. It arose from a study by the National Institute of Economic & Social Affairs in 1999. The report calculated that ‘three million jobs’ are associated with trade with the EU.
This report has been repeatedly misrepresented by various people, including former Deputy Prime Minister Nick Clegg MP, who said that three million jobs are “at risk” if we left the EU. The Institute’s Director, Martin Weale, has repudiated the claim describing the misuse of the report for propaganda purposes as “pure Goebbels”. [v] These jobs depend on the continuation of trade, not on continued EU membership.
Using similar assumptions that arrived at the figure three million jobs in the UK being associated with EU trade we can arrive at a figure of 5 to 6.5 million jobs in the EU being associated with trade with the UK. [vi] Millions of jobs elsewhere also depend upon trade with Europe, for example in China, India and Japan, but those countries do not find it necessary to join the EU in order to trade with Europe.
7) Outside of the EU what would happen to UK citizens living in Europe, could they be deported?
About 1.3 million British citizens live in EU countries, while about 3 million EU nationals live in the UK. The top ten locations for Britons living on the continent are:
Spain 319,144 * Ireland 249,392 * France 171,346 * Germany 99,909 * Italy 65,975 * Netherlands 47,297 * Cyprus 38,844 * Poland 35,829 * Belgium 24,915 * Sweden 20,839 [vii]
Most British people living in Europe are usually working in skilled jobs, or often property owners and retirees living on their pensions. People who are established and living legally in a country are not going to be expelled; least of all because many retired British people are living in European countries that are either poor or suffering from the Euro-zone’s austerity policies (for example 18,067 living in Greece) and the income they provide is highly valued. People with an established legal residency are not going to be expelled. This prospect is just another example of the scaremongering by the Remain side.
8) But if I own a property in an EU member state will it be safe?
When Britain leaves the EU its member states will still have to respect the property rights of individuals living there. This is enshrined in the United Nations Universal Declaration of Human Rights and the European Convention