The world’s major economic growth is now happening outside the EU. The Commonwealth has 53 countries with 2.2 billion people (one quarter of the world’s population). Many of its nations are among the world’s most dynamic and enterprising economies, regularly recording economic growth rates of 5% – 7% a year (World Economics). By contrast, EU growth has almost ceased with average rates of 0.5% to 1.0% (Eurosat). Many parts of the EU (the southern ‘Eurozone’ countries) are now in deep recession. The EU’s share of global GDP has more than halved in the last 30 years (The World Bank, 2015) and its share of imports and exports is also falling steadily.
During the Referendum, both David Cameron’s ‘Remain’ supporting government and the ‘Leave’ campaign stated clearly to the electorate that a vote to Leave the EU, would be a vote to leave the EU Customs Union.
The EU Customs Union and its ‘Internal Market’ (misleadingly termed ‘Single Market’), have deep political purposes going far beyond just trade. The Customs Union is the political device by which Europe’s nations will be made into one state. By erecting trade barriers against cheaper imports from non-EU countries, it not only denies UK consumers the benefit of lower priced imported goods, it also prevents developing countries from escaping aid dependency by developing their trade with UK and European markets. The Customs Union dictates that all trading relationships with countries outside the EU are determined by the EU alone, requiring the agreement of all 27 member states.
By leaving the EU Customs Union, the UK will be able to resume its seat on the World Trade Organisation, (left vacant since joining the EEC in 1973), regaining the ability to make our own trade agreements. Size doesn’t matter; a tiny non-EU country such as Iceland (population only 350,000), recently signed a trade agreement with China. The UK is one of the world’s largest economies and our exports to the rest of the world have outstripped those to the EU for the last 21 months in a row (Office of National Statistics). Some of the fastest growing economies of the world are now queuing up to do trade deals with us post-Brexit.
A Customs Union (or ‘regulatory alignment’) is not a necessity for free trade. Around the world Free Trade Agreements (FTAs) operate across national borders between countries with different customs systems. Examples include the USA & Canada (NAFTA); Sweden (EU) & Norway (non-EU); Switzerland (non-EU) & France/Italy/Germany/Austria (EU). No longer do national borders need ‘old-fashioned physical customs posts staffed by officers in peaked caps rummaging through consignments of imported goods‘. Many of these countries now operate ‘frictionless’ borders by employing modern technology with digital scanning to register the pre-clearance of exported goods. By the use of such systems, Switzerland sells 5x as much per head to the EU as the UK. Every day, 23,000 container lorries cross the Swiss/EU border moving goods worth over a million euros.
Similar systems already operate in 70% of the UK’s ports, including our biggest container port (Felixstowe), which handles £80bn worth of world trade each year (25x the amount of trade crossing the Irish border). Around three-quarters of its trade arrives from outside the EU, yet with digital pre-clearance, 98% of these goods pass as easily through the port as those from the EU. Most goods are sent on their way to British customers within the hour. These systems are swift, simple, and inexpensive and could easily be adapted to resolve the current impasse over future trading arrangements across the Irish border.
Speaking at an event on 28th March 2018, the outgoing Australian High Commissioner to the UK, Alexander Downer, said: ‘For us in the outside world, Britain would become at least in economic terms, irrelevant to international diplomacy if it remained in the EU Customs Union’. He continued: ‘From Australia’s perspective we would willingly give away any tariff protection and provide improved access to our services market as well as create a better environment for British investors ….‘
Canada’s PM, Justin Trudeau has recently promised that ‘Brexit’ will mean that the UK gets a ‘better or larger’ trade deal with Canada. He said he would be happy to open trade talks with Britain the day after ‘Brexit‘. Similar sentiments have been expressed by the leaders of other major world economies; the USA, Japan and South Korea. So what are we waiting for ? Out of the EU, Into the World ……. !