“When the WTO takes decisions, Britain has to leave the room”, “Switzerland has negotiated more trade agreements than the EU”, “Britain is held back in trade negotiations by protectionist European countries”, “Britain is shackled to a sclerotic Europe when it should be trading with the dynamic emerging economies, particularly the Commonwealth”. And on it goes. UKIP and a growing band of Tory fellow travellers have moved beyond the traditional EU critique attacking the Common Agricultural Policy, the Common Fisheries Policy and the Working Time Directive. They are now taking on one of the central tenants of British membership: the EU’s trade policy.

Let’s take the accusation that EU membership shackles us to a ‘sclerotic market’. The evidence simply doesn’t add up for this claim. Germany is the world’s second largest exporter with 41% of its exports going to non-EU countries so clearly it isn’t held back by the single market. The same conclusion is drawn from UK trading history. From 1960-2010, the USA has been the UK’s largest or second export market both before and after EU membership. It’s true that our trade with the commonwealth has declined proportionally over the latter twentieth century but this process had already started pre-EEC in the 1960s when Australia and Canada were our second and third largest markets respectively but by 1970 had fallen to sixth and tenth.

Instead, the opposite is true, the EU is in fact the best vehicle to increase UK trade with the emerging world and it would be disastrous if we left. In a reply to a parliamentary question from Fiona Hall MEP, the Commission has stated that the UK would no longer benefit from the EU’s trade agreements. Currently, the EU has trade agreements in place with 52 [1] countries including emerging economies such as South Korea, Mexico, Colombia, Egypt, Turkey and South Africa. If we left, we would have to start from scratch and try to negotiate entirely new trade agreements. Therefore, on leaving, not only would our trade relationship suffer with EU countries but with the rest of the world too.

If it ain’t broke, don’t fix it. Negotiations have just been concluded between the EU and Singapore & Ukraine, they are nearly finalised with Canada and there are ongoing negotiations with over 70 countries including India, Brazil (via MERCOSUR), Malaysia and Vietnam. In total, there are only 7 Commonwealth countries with whom the EU hasn’t either negotiated an agreement or is in negotiations [2]. It that wasn’t enough, the EU will launch negotiations with Japan next month and probably with the USA in the coming months. The Commission estimates that, if its trade agenda is completed, 2 million jobs and 2% extra growth could be added to the EU economy. Evidence of its success is already being felt – UK exports to Korea have doubled since the entry into force of the EU-South Korea trade agreement in July 2011.

But Hannan et al reply “Switzerland has more trade agreements than us” in an international extension of ‘mine is bigger than yours’. However, not even that is true! According to the Swiss government, they have agreements with 35 countries (excluding the EU) while the EU has agreements with 48 (excluding the 4 EFTA countries). Moreover, the comparison is bogus. Switzerland is a much smaller economy with a narrower industrial base and it is much less of a prize since some countries simply aren’t interested in negotiating with a market of only 9 million people. Swiss officials in Brussels relate tales of trying to negotiate an agreement with the USA in the past decade which stalled when it became clear that the Americans simply weren’t interested enough to be ‘in a mood to compromise’. Switzerland hit a brick wall and abandoned the initiative, in stark contrast to the current EU-US talks which look set to launch soon.

But I hear Farage raging back, “the UK has to leave the room when the EU negotiates trade deals”. Well, so what? The implication that Norway somehow exerts more influence because it is stays in the room is an absolute nonsense. When multilateral deals are struck, it is the positions of the EU, China, the USA and India that matter, not Norway. The UK exerts huge influence on the EU’s trade policy via the Trade Policy committee, its 73 MEPs (bar UKIP, Hannan etc) and at the Trade Foreign Affairs Council.

And it has achieved success after success in recent years. Perhaps the biggest was securing the launch of negotiations with Japan in the teeth of opposition from the French, Italian and German car industries. Furthermore, the UK almost single-handedly convinced other EU countries to accept a deal which allowed unilateral trade preferences for Pakistan. Yes, unilateral preferences where EU producers get nothing other than increased competition. Finally, UK pressure ensured that the Commission refused to conclude the Singapore free trade negotiations until they granted EU banks the same level of access that the USA currently enjoys, a key British request. Such demands are successful because in return Singapore gets access to a market of 500 million people. They wouldn’t be nearly as pliable if the market on offer was only 60 million. Collectively, the EU is the world’s largest economy, the largest exporter, largest importer, the largest investor and largest recipient of investment. Weight matters.

The hackneyed phrase ‘better together’ is probably never truer than for the EU’s trade policy. As a big fish in the EU pond, we are able to influence international trade far beyond our economic weight. As China, India and other emerging economies gain an even greater share of world trade, this strength in numbers will become increasingly important. David Cameron was right to bang on about the ‘global race’ and EU trade policy is the way to confront this challenge. It shows how divorced they are from reality that many eurosceptics argue otherwise.

[1] The EU has trade agreements with Albania, Algeria, Andorra, Antigua and Barbuda, Bahamas, Barbados, Belize, Bosnia, Chile, Colombia,Costa Rica, Croatia, Dominica, Dominican Republic, Egypt, El Salvador, Fiji, Grenada, Guatemala, Guyana, Honduras, Iceland, Israel, Jamaica, Jordan, Lebanon, Lichtenstein, Macedonia, Madagascar, Mauritius, Mexico, Montenegro, Morocco, Nicaragua, Norway, Palestine, Panama, Papua New Guinea, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, San Marino, Serbia, Seychelles, South Africa, South Korea, Surinam, Switzerland, Turkey, Trinidad and Tobago, Zimbabwe

[2] These countries are Australia, Bangladesh, Brunei, New Zealand, Nigeria, Sri Lanka and Pakistan


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