Why We Should Leave The EU ‘Single Market’

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Mar 20, 2018 Comments Off on Why We Should Leave The EU ‘Single Market’ John Butler

What Is The EU ‘Single Market ?

The term ‘single market’ is a misnomer, coined by the EU to mislead the public into thinking it’s mainly about free trade. It isn’t. It’s purpose is more accurately described as a ‘Single Regulatory Regime‘.

It’s proper name is the EU ‘Internal Market’, as defined in Article 26(3) of the Treaty on the Functioning of the European Union (TFEU): ’The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured ….’ It contains a number of components, including the EU Customs Union (Article 28 (1), TFEU).

Although ‘Single Market’ rules allow free trade between EU member states (in reality France and Germany still protect certain key industries), it has wide ranging political purposes. These are:

(1) To ensure that all business activity, goods and services within EU countries (regardless of whether they export to other countries or not) is subject to a single ‘harmonised‘, regime of EU regulation,

(2) To create a new European ‘demos’ by allowing all EU citizens the unrestricted right to live permanently anywhere within the EU (often misleadingly described as ‘free movement‘).

(3) To enable the EU’s Customs Union to erect trade barriers against imports from outside ’Fortress Europe‘

(4) To ensure that all trade relationships with countries outside the EU are determined by the EU alone.

    The primary purpose of the EU‘s ‘Single Market’ isn‘t free trade at all; it‘s to develop a political union.

Why Should Britain Leave the EU ‘Single Market‘ ?

(1) Freedom to decide our own regulations will lift the burden on UK enterprise and encourage small firms to grow. EU Regulations impact disproportionately on our small and medium sized business, who produce around three quarters of the UK’s GDP, but are subject to 100% of the EU’s job destroying regulations, even though 95% of them only trade within the UK.

(2) We will regain the power to control our borders against unlimited migration from the EU, and decide for ourselves on a points based system, who should be allowed to live and work here.

(3) We will regain the power to sign our own trade agreements with the rest of the world, and regain our seat on the World Trade Organisation, vacated in 1973.

(4) UK consumers will benefit from lower priced imported goods. Third world countries need trade as well as aid if they are to escape poverty, and desperately need to boost their trade with the UK market,

(5) Leaving the EU but remaining a member of the ‘Single Market’ will mean that we have to abide by all current and future EU regulations, while having no say in them; the worst of all possible worlds.

What Will Happen To Our European Trade If We Leave ?

(1) Having access to trade with the EU’s internal market does not depend on being a member of the EU internal market; they are two entirely different things.

(2) After ‘Brexit‘, UK trade with EU countries will continue in one of two ways:

(a) Free Trade Agreement (FTA): The UK is the world’s fifth biggest economy, its largest financial services centre, and the EU’s biggest export market. We buy far more from the EU than they buy from us. EU countries desperately need agreement with the UK to have continued access to our ‘single market’ once we leave. Free trade is even more in their interests as ours. The EU has no logical reason to impose trade barriers against its biggest and best customer.

The EU currently has over 100 ‘free trade’ agreements (FTA’s) of various kinds with other countries, allowing access at varying levels to the EU internal market. Only four such agreements (mainly the EFTA countries) give rights of residency to all EU citizens.

(b) Trade under WTO rules: Six of the EU’s Top 10 trading countries aren’t in the EU. They aren’t members of the EU’s ‘single market’ and they don’t even have a Free Trade Agreement with the EU. They access its internal market under World Trade Organisation (WTO) rules, by paying a small external tariff. In this way (2012), China sold £290bn worth of goods to the EU; Russia £213bn, the USA £205bn. The goods they sell to the EU have to comply with EU regulations, but those regulations don’t apply to the goods and services sold within their own internal markets, or those that are sold to countries not in the EU. They retain full control over their borders.

There is no reason why the UK could not beneficially access the EU ‘single market’ under WTO rules.

What About Ireland ?

(1) The 1923 Common Travel Area Agreement between the Irish Republic and the UK removed border controls between North and South. This bilateral agreement still stands and is nothing to do with the EU. It enables the free trade of goods and services across the border and gives the Republic’s citizens the right to live and work in the UK. The UK is the Republic’s main export market.

(2) The Agreement was re-affirmed as recently as 2011, by both British and Irish governments further to the 1998 Good Friday Agreement.

(3) Most Northern Ireland ‘exports’ go to the UK. To keep Northern Ireland in the EU ‘single market’ will seriously damage this trade. Part of the UK will still be controlled by the EU and be subject to European Court rulings. ’Regulatory alignment’ is a device to be used by the EU to keep Northern Ireland (and maybe the rest of the UK too), in the EU’s ’single market’.

(4) Free Trade Agreements (FTA) do not need identical rules and regulations governing the internal market of each country, only for those goods and services exported to a country within the FTA to comply with the rules and regulations of the country of destination.

(5) If the UK leaves the EU ‘single market’ some form of customs control will be needed between Northern Ireland and the Republic. Such controls no longer need ‘old-fashioned physical customs posts staffed by officers in peaked caps, rummaging through consignments of imported goods‘.

(6) Modern technology has developed simple systems for the electronic pre-clearance of goods. There are a number of examples of ’frictionless’ and ’virtual’ borders’ between countries with different regulatory regimes (Norway/Sweden; Canada/USA), trading freely with each other under FTA’s. These examples are particularly relevant to the Irish border issue.

(7) Significant migratory pressure from the EU into the UK, via the Republic and the North is unlikely. Should it happen, its consequences will be felt first in the Republic at its various ports of entry. The UK should offer every assistance to the Irish government in dealing with this.

(8) Should that pressure move to the North, the UK government may have to consider an internal control between the ports of Northern Ireland and mainland Britain. However there is no reason why UK and Republic passports holders could continue free access, while passport holders from other EU countries face a simple check before embarkation.

What Would Happen If There Is ’No Deal’ by March 2019 ?

(1) With ‘no deal’ the UK will continue trade with EU countries but under WTO rules, each paying a tariff on the others imported goods. The highest WTO export tariffs are on cars (10%) and wine (32%); types of export to the UK that are crucial to many EU countries.

(2) Based on current trade figures, the UK would pay approximately £5bn a year in tariffs to the EU, while those exporting goods and services from the EU to the UK would pay approximately £13bn. Trading under WTO rules, the EU would be the losers. The UK Treasury would make a net profit of £8bn pa.

(3) We leave the EU, without any ‘divorce’ payments. We could cease immediately any further payments to the EU, saving us at least £20bn a year. There would be no need for an undefined ‘transition period‘ on our leaving the EU.

(4) We could introduce full UK border controls from March 2019, and reclaim our fishing waters immediately.

(5) We would be freed to make beneficial trade deals with the growing economies of the world.


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