Frequently asked questions on leaving EU

Gerard Batten MEP, sent me his FAQ on leaving the EU. (EU Referendum FAQs PDF)

Here are the top 5:

1. Would leaving the European Union (‘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 discriminatory trade barriers against the UK, since to do so would be in breach of World Trade Organisation (WTO) rules which govern world trade. All EU countries have agreed to follow them. And even if they could do so (which they cannot) why would they want to? We have a massive trade deficit with the EU – they sell us far more than we sell them. Britain’s accumulated trade deficit with the EU since 1972 is over £683 billion.

Figures for 2014 showed that Britain exported goods and services to the EU to the value of £228.9 billion, whereas their exports to us amounted to £290.6 billion: therefore we had a trade deficit with the EU of £61.7 billion. Germany, Spain, France, Italy, etc. will still want to sell us their cars, wine, holidays, etc. Trade will continue as normal.

Britain’s is the fifth largest economy in the world. We are a world-class trading nation, while we have a trade deficit with the EU, we have a trade surplus with the rest of the world. Our trading success stems from hundreds of years of experience, from English being the international language of business and science, and from the trust that foreign companies put in the English legal system and contract law.

2. 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, and these are known as the Common External Tariffs. However, the World Trade Organisation has been negotiating down trade barriers internationally for many years, and as a result these are now generally low. The pro-EU organisation British Influence states: “UK exporters would still have to pay 15% on average for food and 10% on cars to trade with the EU” 4, but this is pure scaremongering. Since the EU sells far more to Britain than we sell to it, it would not be in its interests to impose the Common External Tariffs even if it could, since if it did so we could impose similar tariffs on what the EU sells us. This would be in no-one’s interests.

Business for Britain issued a report stating that if the Common External Tariffs were levied on British exports to the EU, these would be at an average rate of only 4.3%.5 Business for Britain calculates that this cost would be lower than the UK net contribution to the EU budget. Using 2013 figures they calculated that tariff costs would be about £7.4 billion. The estimated net cost of EU membership for 2016-2017 is over £10 billion.6 When we are outside the EU, it would be cheaper for the British government to pay exporters’ tariffs for them rather than paying into the EU budget – should it choose to do such a thing.
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 member states, the Single Market has 31. We do not need to be in either the EU or the Single Market in order to trade with member states. Some in the Remain campaign argue that we cannot trade with the 5 Single Market without open borders and the free movement of EU citizens. That is simply not true. Many countries trade with the EU without finding it necessary to join the EU or the Single Market.

The top ten exporters to the EU are: China, Russia, USA, Switzerland, Norway, Japan, Turkey, India, South Korea, and Brazil. None of these countries are members of the Single Market and six of them do not even have free-trade deals with the EU (China, Russia, USA, Japan, India and Brazil). The fact that they are not members of the EU does not restrict their trade; in fact it empowers them to trade on their own terms. Outside the EU, Britain could negotiate a trade deal with the EU from a position of strength.

4. What about international trade deals that the EU has negotiated with the rest of the world – would we be excluded?
Britain’s is the fifth largest economy in the world. We are a major trading nation. Outside the EU, those countries who have signed trade deals with the EU would certainly want to continue mutually beneficial trading arrangements with the UK. They would have a great incentive to agree quickly to a continuation of trade on the same, or very similar, terms. When Britain regains its seat on the WTO and control of its own international trade policy, we could also no doubt negotiate better trade deals for ourselves – as we did for hundreds of years before we joined the EU.
5. Isn’t about 50% of our trade with the EU?
No. This figure is highly exaggerated and misleading. ‘Trade’ in this context refers only to the international export of goods and services; and of international trade, in 2014 44.8% of our total exports in goods and services were to EU countries, according to the Office for National Statistics. That 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 beyond the EU. The ONS say that the exact scale of the Rotterdam effect is unknown, but that it could reduce exports to the EU to 42.1%.7 So it is fair to say that less than 43% of our international trade is with the EU.

Britain’s trade with the EU has been declining over the last twenty-five years. ONS figures show that in 1999, 54.7% of our international trade was with the EU, by 2014 that had fallen to about 43%. Approximately 30% of our economy is concerned with international trade, and less than half of that with trade with the EU. The other 70% of the economy is purely domestic, i.e. within the UK. Figures published by the ONS show that only 5% of UK companies trade with the EU – and yet 100% of our businesses have to comply with EU regulations. While EU trade is important to Britain, it would not be endangered when we leave the EU – but 95% of our businesses would be freed from EU jurisdiction.8


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