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Europe or the world? It’s a false choice.

by Ian Shires on 2 September, 2015

“Do you agree that the UK should leave the EU and trade with the world?” That’s the question on the front pageof the UKIP website, and presumably how they want to start framing the referendum debate once they launch their own No campaign later this week. “Out, and into the world,” as it was put in the 1970s.

But that’s a false choice. We don’t have to choose between Europe and the world. We can have both.

Let’s start by emphasising just how important the European marketplace is to British business. Last year, according to figures from the Office for National Statistics, the UK’s exports to the rest of the EU were worth £226bn – 12 times the value of the stuff we sold to China and 33 times what we sold to India. Between 2000 and 2014 the value of our exports to the rest of the EU rose by £80bn; the value of our exports to China rose by £16bn, and to India by just £4bn. China and India are important, growing markets with lots of potential, but let’s not forget just how important Europe is and will remain.

We are in a much better, stronger position in trade negotiations inside the EU than we would be outside. The EU makes up a quarter of the entire planet’s economy. It is bigger than that of China, bigger even than that of the United States. When we negotiate as a European bloc we do so from a position of strength. Of course Britain could hammer out a trade deal with America or China, but we’d not be negotiating with them as equals in a way that we do when we sit down as part of Team Europe. China’s economy is three times the size of ours, America’s is six times larger.

The CBI gets it. That’s why they’ve said that, “We would look to negotiate trade deals with the rest of the world if we left the EU, but we’d be doing so with a weaker hand”.

Roberto Azevedo, Director-General of the World Trade Organization, said last year, “the more that a country or a member is in a position to join with others in defending a particular idea or defending a particular agenda, the easier it is to push through its interests.” His is one of a number of voices in the world, including fellow Commonwealth countries like Australia as well as Japan and the United States, urging Britain to stick with the EU.

And what about the first trade deal we’d have to negotiate if we left, the one with the EU itself? We sell around half our exports to the bloc, but the UK is the marketplace for only around a tenth of their exports. They are a far more important export market to us than we are to them. This is why Poland’s former foreign minister, Radosław Sikorski, said there would be “no prizes for guessing who would have the upper hand in such a negotiation. Any free trade agreement would have a price.”

Anti-Europeans will often argue that free of Europe we can trade with the new, emerging markets. But what’s holding us back from doing that right now? Britain’s exports to Brazil, Russia, India, China and South Africa (theBRICS) amounted to $41bn in 2012, according to figures compiled from the Observatory of Economic Complexity. But Germany managed to sell those same countries goods and services worth $167bn – four times as much. If Germany can do it, it’s not the EU that’s holding us back. As so often happens, we blame the EU rather than holding up a mirror to ourselves.

But this isn’t just about lowering tariffs on selling widgets. By sticking together, European countries avoid a race to the bottom on the social protections that we enjoy.

Take the entitlement to paid leave as an example. In Britain, someone working full time is entitled to 28 days’ paid leave per year. It’s one of the highest in the world. In a recent study by the US-based Center for Economic and Policy Research, 11 of the 12 countries with the most generous entitlement to paid leave are inside the EU. If you look at the G7 member states outside Europe, the entitlements are derisory: Canada and Japan, 10 days per year; and in the United States there is no legal entitlement to any paid leave at all.

Alone, outside the EU, how long before people started to argue that we need to cut the cost of doing business so we can compete in the global marketplace? Without being able to offer investors access to the Single Market, we would need to offer them something else to tempt them back over the Channel, most likely by making it cheaper to hire people and easier to fire them. I have written before about how the No campaign has made clear that this is the kind of Britain they want to see: a Britain of cheaper workers and lower standards.

UKIP’s binary choice – Europe or the world – is a false one. Staying in Europe means we can continue to enjoy unfettered access to the biggest economy on the planet. We can negotiate better trade deals as a part of a powerful bloc. And, as Germany’s experience shows, the EU does not stop us from growing our export markets.

The problem that leaves me with is how to answer UKIP’s question: Do you agree that the UK should leave the EU and trade with the world? Look at it again and you’ll see my problem. They only offer two possible answers: “Yes” and “Undecided”. Democracy, UKIP-style.

* Stuart Bonar was the Liberal Democrat parliamentary candidate in Plymouth Moor View.

photo by: rockcohen
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