Remain or Leave?
I have spent the last few months providing arguments for leave waiting for someone to convince me I’m wrong. I’ve be fighting very passionately about leaving this EU organisation.
I hate the EU, I hate the red tape and bureaucracy, I do not like the fact there are over 12,500 laws for Milk and you basically need a PHD to milk a cow and sell the milk. I don’t like being told what to do or controlled. I do not like the fact we do not have the power of our own destiny. I could write a really long list of all things I don’t like about the EU. On 17th March, I wrote an argument for Leaving the EU. (http://www.clifftons.com/eu-in-or-out/)
3 days before voting – There is one area that has changed my mind – Trade.
I’ve spent my whole career negotiating, trading and dealing in markets. Demand and Supply, that has to be a seller, to be a buyer. Even as a child on the playground trading football player cards, (got, got, got, need, got, got, need, got, got and then swap) Trade, give and take. Britain is historically great at trade, when the British first went to Asia, Britain wanted their Silk and Tea but didn’t have anything the Chinese wanted, so ended up trading Opium. In the end the Chinese government confiscated 20,000 chests of opium without compensation, blockaded Trade and confined European Merchants. The British government objected to this seizure and used its naval and gunnery power to inflict a quick and decisive defeat. The British had our outpost, Hong Kong and the drug wars ended on the basis we took a 99 year lease on the island. https://en.wikipedia.org/wiki/First_Opium_War
Anyway, my point is Trade. There are only 3 outcomes with our relationship with the EU.
One, A condition of access for the single market from the EU is ‘Free Movement of People’ & ‘Membership fee’. The Norwegian Model, being in the single market without actually being in EU, is rubbish. Zero influence, zero power and no voice. To have access to the free single market, they have to do everything the EU says, without having a say or voice AND accept free movement of people AND pay a massive membership fee. Firstly, Britain wouldn’t want this BUT the EU wouldn’t offer it to us anyway because it would be conditional to have free movement of people and a membership fee.
So goodbye Single Market.
(The single market is the legal framework with regulatory barriers and numerous different rules to regulate goods or services. The point of the single market is to remove regulation for Trade.)
Britain is a major player within the EU and has enormous influence, brokers and builds deals, sets out political agendas, negotiates alliances but also we have to compromise. We have been clever at brokering deals by using other countries assets throughout the EU to negotiate the deals we want. For example. Say Britain wants to sell financial services in South Africa but South Africa is not interested in this and we have nothing else to trade with. They want lower tariffs for their wine they produce. France may dis-agree with this because they are a major European player when it comes to wine but will allow this, however, if Britain allows a higher tariff on Swiss (American) cheese, France can sell more cheese around EU, South Africa can sell more wine and Britain can sell more financial services in South Africa, for example. I know this is boring, stay with me now.
We bargain using other countries economies to get what we want.
Britain is the 5th largest manufacturing country in the world. Correct but why? As a car parts manufacturer, I can make car parts in the UK and freely export them around the EU. ‘A gateway into Europe’. This is a reason why manufacturing in the UK is doing so well.
If I am a manufacturer and we vote leave. I can ONLY supply the UK domestic market and am now inundated with regulation and red tape exporting to the EU – the only choice available is to open a factory in France. Britain is a open economy with low restrictions anyway. MANUFACTURING WILL DECREASE with a vote leave.
Also, the EU if not going to be friendly to Britain, if we divorce them. They have to make it clear to all other member countries, life on the outside is not going to be better.
This only leaves two remaining options.
a) A Bi-lateral agreement with EU (Like Switzerland, South Korea and Mexico)
b) No agreement and trade with EU like the rest of the world under the WTO
In both A & B scenario’s, its going to be extremely hard for businesses to be based in the UK with zero competitive advantages. The business here, will only have the UK’s domestic market. We will face being restricted with higher tariffs, no longer having access to this large free market.
The only real choice available, is probably a bi-lateral agreement.
However, other countries around the world will not want to enter into a bi-lateral trade agreement with the UK, until they first know what their agreement will be with the EU. The EU could easily place pressure on a country saying, we do not think its in your interests to give the UK this deal, otherwise the EU will have to increase the tariffs on XYZ. There is no way, the EU will let Britain be more competitive than them and with a larger market, the power is theirs. The genie is out of the bottle and he is not going back in.
If we leave, the UK will not have a single trade agreement around the world. All the agreements are in partnership through the EU.
The EU treaty states we have two years to sort out our divorce (I guarantee the EU will make this as awkward and difficult as possible).
Once this is complete, and we start our new free single life. It is likely the grass in not greener on the other side and we are missing the 27 kids or can see them with heavy restrictions and other countries come with their own baggage and complications.
We then will have to sort out a new relationship with the EU. This is going to take circ. 8-10 years and the 27 kids have different needs and wants, difference ages and sizes and its going to be very difficult to sort out.
Britain is powerful within the EU, we have influence and power being IN the EU.
We are one of the big 3 – UK, France and Germany – between us, we provide the EU with political, economic and diplomatic leadership. Nothing happens in the EU without the co-operation of the Big 3. We have control, influence and power. The EU far from perfect but we can only make a difference from the inside.
Vote Leave = Less Trade
There is no question, this referendum has shown there are deep fundamental issues with the EU and reform will be round the corner.
Vote Remain = Making the EU work for us. Retaining power and influence on our continent and the opportunity to make a difference.
Some other points.
Turkey – There are 35 steps for Turkey to join the EU, they have completed step one. They are a million miles away. The reason our PM and politicians say nice things about Turkey is to keep them on side, to help the EU and build relations. We needed a solution and Turkeys help for the migrant crisis and to stem the flow. Britain achieved this. The Germany leader said, our door in wide open, thank goodness Britain was there to save the day and help sort the mess out. The EU needs Britain.
Immigration – There has been heavy immigration because the UK has lots of growth and jobs. This is changing as France, Spain and other economies are now growing, the immigration to and from will change in time.
In conclusion, the cost of leaving the EU is too high.
Britain has a special status in the EU, holding a strong voice.
Reform is next on the Agenda, if we vote Remain. We have to just keep trying.
Posted: 20th June 2016