The campaigns on either side of the EU referendum debate have now launched. We may not know when the referendum will be held but we certainly know some of the arguments those campaigning for ‘out’ will make. Those who support Britain leaving the EU, the world’s largest integrated market, make several claims about the UK, the EU and trade:
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first, they claim that the EU is of diminishing importance for the UK’s global trade footprint because of problems in the Eurozone and the rise of new economies like China and India;
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secondly, they claim that the UK would be able, on leaving the EU, to negotiate a trade agreement with the EU on terms at least as good as or better than those we have now as an EU Member State;
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thirdly, they assert that outside the EU the UK would be able to negotiate free trade agreements with other countries, such as the USA and China, equivalent to or even superior to those achievable by the EU.
These claims do not hold water:
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the EU remains the UK’s single largest export market, despite growth in exports to emerging markets (less than 10 per cent of UK exports go to Brazil, Russia, India and China);
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no European country outside the EU has been able to negotiate a trade deal with the EU giving it access to the EU’s Single Market on the same or better basis than that given to EU members;
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outside the EU the UK would have to obey most EU Single Market rules, including the free movement of people, as Norway and Switzerland have had to do, but without any say over those rules and while paying for access to the Single Market;
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EU free trade agreements benefit the UK because the size and weight of the EU enables it to get better trade and investment deals than the UK could negotiate on its own.
This note considers the trade arguments made by those who are campaigning for the UK to leave and explains why we believe that the trade benefits the UK derives from EU membership are of great importance to jobs and prosperity in Britain.
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