Transcript The future of the EU - the case for the UK*s remaining

The future of the EU - the case
for the UK’s remaining in
Michael Johnson
([email protected])
24 November 2015
Issues for this session
• The positive case for UK membership of the EU
• Teaching the issues in a balanced and informed
way avoiding prejudice and rhetoric
– Base arguments on true facts and accurate figures
(1) Britain’s place in the world
(2) EU internal economy and Britain’s place in it
(3) International trade
(4) Need for positive change – better to be inside!
Britain’s place in the world (1)
• The UK is geographically, historically, linguistically
and majority-ethnically a European country
• Britain’s world dominance and ability to go it
alone lasted roughly 250 years – 1700 to 1950
• Our “industrial revolution” industries (coal, steel
and textiles) have largely gone
• We now depend mostly on providing and trading
services
• Can still exert real global influence, but only as a
leading member of a larger unit
Britain’s place in the world (2)
• Issues for consideration by teachers:
– How to identify the realities of Britain’s current
international position in the face of constant and
conflicting media reporting?
– How do we teach the history of Britain as a world
power and distinguish reality from myth?
– What tools can we give to students to enable
them (1) to evaluate what arguments in the
debate are valid and which not; and (2) to balance
arguments so as to arrive at an informed opinion?
EU internal economy and UK place in
it (1)
• UK GDP is £11.3 trillion; UK £1.8 tr., or 1/6
• EU is a Single Market of 505 million people (60%
bigger than USA, much richer than either India or
China)
• EU internal goods trade is essentially free of
restrictions
• 52% of UK total trade in goods is done within the
EU: 50% of exports, 53% of imports
• Some important internal barriers in services
remain, and there is no Digital Single Market or
Single Market for Capital
EU internal economy and UK place
in it (2) - Services
• Services are increasingly important in developed
country economies and in international trade
• The UK provides and trades services on a global scale
• The WTO lists over 150 categories of services
• 80% of the UK economy and 33% of total UK trade
• The UK was Surplus on UK services trade of £85bn. in
2014
• prime mover in the campaign to complete the EU
Single Market from 1986: services liberalisation and
transparent regulation are essential elements of that,
though much more still remains to be done
EU internal economy and UK place in
it (3) – Competition and investment
• EU competition policy safeguards all members against
unfair restrictive practices and reduces prices
• In 2013 UK had just over £1tr. of overseas investment
(FDI) stock, (£447bn. in EU)
• UK is largest EU recipient of inward investment from
non-EU countries: £44bn. net in 2014, total FDI stock in
UK in 2014 £1.065tr.
• Much, maybe most, of this FDI comes to the UK
because we are in the EU and a good entry point. UK
outside the EU would lose at least some FDI and maybe
some major companies
EU internal economy and UK place in
it (4) – Issues for consideration
• What is the structure of UK industry and
commerce in the 21st century?
• How far is the UK economy still independent
on a national basis?
• How far is the economy internationally
integrated (1) within the EU and (2) more
widely, on the basis of global value chains?
• Is there any longer a viable place in the world
for economies conducted on a national basis?
International trade – EU common
commercial policy (CCP) (1)
• The EU is a customs union – there are no internal tariffs
on goods, and non-tariff barriers are prohibited
• All member states apply uniform import tariffs to
goods
• The CCP aims for international abolition of restrictions
on trade and for liberalisation of service activities
• The EU applies common standards for goods and
increasingly for regulation of services
• Trade agreements are negotiated and made at EU level
• Trade policy is developed in constant consultation
between the Commission and member states, both
bilaterally and in regular weekly meetings under the
auspices of the EU Council Secretariat
International trade – EU common
commercial policy (CCP) (2)
• The EU has 50 trade agreements in force and 84
in negotiation or awaiting implementation
• 5 major agreements are under negotiation
including TTIP with US, and an agreement on
investment protection with China
• The EU is vastly stronger if agreements are made
and administered centrally:
– Negotiating strength of a market of over 500 million
– All member states on an equal footing and have equal
opportunities to benefit from agreements if they can
– In case of trade problems affecting one member state,
it can call on whole EU and Commission for support
International trade – EU common
commercial policy (CCP) (3)
• “Leave” campaign claims that UK can make its own
independent trade agreements outside the EU
• The Prime Minister demolished this argument in his
Chatham House speech on November 10:
– Nothing in the EU prevents us from trading with anyone we
wish
– Other countries would have to be prepared to renegotiate with
us advantages which we already have as an EU member
– Even if others were willing, renegotiation would be a huge task
taking enormous resources and many years
– Pending any new agreements, UK goods exports would face
tariffs and other barriers in markets where they do not face
them at present
– USTR Froman confirmed on 28/10 that the UK outside the EU
would face tariffs in the US market; the US would not
renegotiate a new agreement with UK
International trade – EU common
commercial policy (CCP) (4)
Issues for consideration:
• How does the UK determine trade policy priorities in the
modern world and in the face of changing conditions?
• What priority sectors and/or activities should be the
main focus of UK trade policy and promotion?
• Should governments consider non-economic factors such
as human rights when deciding trade priorities?
• Is it easier to take account of non-economic factors at the
level of individual governments or with agreed multistate backing e.g. of the EU?
Conclusion – positive change
• No political structure lasts for ever, and that applies to the
situation of individual countries in and out of the EU
• We must be alert to movements in international political
and economic power and be prepared to adapt positively
to changes
• The UK cannot put the clock back to where it was 50 or 100
years ago – dead-end ambition
• The UK must work positively within EU to make the best
use of the structures we now have and the worldwide
opportunities which they open up
• The EU works imperfectly in many respects. All must face
up to these problems and the only way for Britain to do
that is to work positively on the inside for reform