Liberal Democrats stand up for British trade & jobs; UKIP and Eurosceptic Tories pretend you can have your cake and eat it

Following a number of Twitter exchanges about trade with Eurosceptics (mostly UKIP supporters), I decided I needed a bit more than 140 characters to properly address this crucial topic.

As a Liberal Democrat, I am a supporter of UK membership of the EU for many reasons including the benefits of being part of the world's biggest single market. Being inside a huge borderless market of 500m consumers is good for British companies, British jobs and British consumers. The UK also benefits from over 70 trade agreements that the EU, negotiating as the world's most powerful trade bloc, has secured with countries across the globe. 

Right now, when the UK economy is beginning to turn a corner, the last thing the country needs is to jeopardise this recovery by pulling out of the EU. In this respect, the Liberal Democrats are the only party standing up and fighting for EU membership and what it means for British jobs; the Tories are too divided to take a position, Labour lacks the courage of its convictions, and we all know where UKIP stands.

Eurosceptic trade myth no 1: no jobs are linked to EU membership so none would be lost if we left

A study published a few weeks ago ( shows that over 4 million jobs are linked to Britain's membership of the EU, which given that 50% of our exports go to other EU countries, isn't entirely surprising.

This doesn't mean that if we leave the EU, all those jobs disappear overnight, but it means those jobs are directly linked to our ability to trade (buy and sell) with other EU countries as part of the world's biggest single market.
In particular, the UK is very good at attracting international companies to set up here as a springboard to the EU single market, for example the Japanese car companies Nissan, Honda and Toyota.  

These companies may not go as far as leaving the UK in the event of the country exiting the EU (although we cannot be sure of that), but uncertainty about future EU market access would at the very least push them to slim down their UK operations to serve only the UK market rather than producing for export across the EU. 

I want the UK to remain an attractive destination for foreign investment of the kind that has just seen Siemens announce plans to create over 1,000 jobs in Hull in the renewable energy field.


Eurosceptic trade myth no 2: we can leave the EU and retain the same trading relationship because "we buy more from Europe than they buy from us"

This is where it's easy to expose a gaping hole in Eurosceptic rhetoric. While the UK buys more goods from the rest of the EU than we sell, the opposite is true of services, which represent 80% (!) of the British economy. The UK exports far more services to the rest of Europe than they sell to us.

This is why our financial services sector (among others) is very worried about a potential EU exit as they fear the massive loss of business that would result from being locked out of the single market in financial services ( ).
UKIP and Eurosceptic Tories are doing their best to hide this rather vital fact by repeating the "they sell more to us" line without explaining that they only mean goods and not services. Only the week before last on the Sunday Politics show, UKIP candidate Patrick O'Flynn was made to look rather foolish when BBC journalist Andrew Neil had to spell out the facts of British trade in services to the rest of the EU to him; O'Flynn gave no answer. I have since tweeted him several times about this, but he doesn't respond; one suspects either because he cannot or because a truthful answer reveals the weakness of his party's arguments on trade.
China also sells more (goods) to the UK than we do to China, but I don't think anyone would be foolish enough to claim this would give the UK the upper hand in trade negotiations with China. However, Eurosceptics would have you believe the UK (1 country, market of 60 million) would be able to hold the rest of the EU (27 countries, market of over 440m) to ransom. Pretty had to believe isn't it? Well unless you are living in the past and think the British empire still exists....

Eurosceptic trade myth no 3: we can have a free trade deal with the EU

It is possible to trade with the EU without being a member country through a free trade deal. The most recent deal that came into force was the EU - Canada trade agreement, which removed a number of tariff and non-tariff barriers, for example in the food sector, which was good news for the British food industry.  

However, what UKIP/Eurosceptic Tories do not want people to know is this: no EU free trade deal ever negotiated gives full access to the EU single market. Nigel Farage mentioned Mexico's trade deal with the EU in the Nick versus Nigel debate; a trade deal which excludes specific sectors and products, such as dairy, grains and sugar, but of course he didn't mention all these exclusions, wonder why? 

The EU-US trade deal (TTIP), which is likely to be the most significant trade deal ever negotiated, will not come close to allowing American companies full access to the single market. Even the Swiss with their 120 (!) bilateral agreements with the EU do not have access to the single market in services.  

So which sectors of the economy do UKIP and Eurosceptic Tories want to let down by locking them out of the world's biggest market? Does they think the British people are foolish enough to believe you can have your cake and eat it? I credit the British public with far more common sense than that!

Eurosceptic trade myth no 4: we can join the EEA; trading with the EU, but free from Brussels rules

Some UKIP supporters and Eurosceptic Tories claim that we can join the EEA (European Economic Area), which are countries that are part of the single market, but outside the EU like Norway, thus allowing us to trade with the EU as freely as we do now, but with no "interference" from Brussels. Sounds too good to be true doesn't it?  

The UK may be able to join the EEA, but what would the implications be? As an EEA member, the UK would have to: 

   contribute to the EU budget (the "small contribution" Nigel Farage says Norway pays is actually over 80% of the British contribution per head of the population), but have no say in how it was spent; 
   implement EU laws that would be decided without British MEPs and British government ministers at the table in Brussels shaping those laws. 
Or in other words the EEA option means "out of Europe, but run by the EU". As Guy Verhofstadt, leader of the Liberal group in the European Parliament and former Belgian PM once said "You're either at the table in Brussels or you're on the menu". I know where I would prefer the UK to be.

Even the Norwegian Foreign Minister himself has warned the UK against leaving the EU, saying his country had to put up with "regulation without representation".


Eurosceptic trade myth no 5: we can be like the Swiss

The other option for the UK (advocated by Tory Eurosceptic MEP Daniel Hannan, who is at least honest about the impossibility of a mythical have-your-cake-and-eat-it free trade deal promoted by UKIP), is the Swiss option of negotiating sector by sector/policy area by policy area cooperation with the EU.  

This has so far resulted in Switzerland signing some 120 (!) bilateral agreements with the EU. Each time there are significant changes in relevant EU policy areas, Switzerland needs to update its bilateral accords with the EU or initiate new ones. Despite hundreds of agreements with the EU, Swiss companies are not free to buy and sell services in the single market; imagine what impact that would have on the UK which has a trade surplus in services with the rest of the EU. I would rather not thanks! 

To monitor EU developments, the Swiss government and Swiss business and civil society representatives are present in Brussels following virtually everything the EU does in order to adapt themselves to it. The Swiss lobby the EU institutions when decisions are being made that will affect Switzerland, but without the benefit of having Swiss MEPs and Swiss government ministers to fight their corner, unlike the UK whose MEPs and ministers are on the ground doing just that. Well, except UKIP MEPs who don't bother with the hard graft of standing up for British interests day in, day out.  

I was amazed to find Swiss government representatives attending a meeting in the European Parliament on alcohol policy. I was informed by one of them that "any changes in EU alcohol policy will affect us, so we need to monitor the situation". This is a policy area where the EU has very little legislative power!
This sounds like the worst of both worlds to me; having to follow what the EU does and change your own policies accordingly without benefitting from full access to the single market.

Eurosceptic trade myth no 6: EU membership hampers the UK in global trade

The argument goes something like this: the UK is "not free to trade with the rest of the world" due to being part of the EU. This argument seems to assume firstly that EU and global trade are mutually exclusive; ie you cannot do both, which is somewhat economically illiterate. Selling to customer A does not prevent a business from selling to customer B too.  

Whenever I ask Eurosceptics why German companies manage to sell far more to emerging markets like Brazil than British companies apparently unhindered by the same EU membership that is "holding back" the UK, I don't get any coherent answers.
UKIP talk about trading more with the Commonwealth and even go as far as claiming that joining the EU destroyed trade with Commonwealth countries. The truth is that trade with Commonwealth countries had been declining for many years before the UK joined  what was then the European Economic Community in 1973.
Commonwealth countries set free from British colonial rule naturally started to trade more with their neighbours than the more geographically distant UK. It is no surprise that Australia's biggest trading partners today are China and Japan ( I do not know how anyone could seriously suggest that Britain leaving the EU would reverse this 50 year old trend.  

In addition, the vast majority of Commonwealth countries have trade deals with the EU and Commonwealth governments  such as Australiaand Canadasay they want the UK to remain part of the EU. UKIP and Eurosceptic Tories are so backward looking, they cannot see that our relationship with the Commonwealth has changed, and we cannot go back to being an imperial power on whose empire the sun never sets.  

Another false claim is that the trade deals the EU makes with the rest of the world with its huge negotiating strength as the world's biggest trade bloc somehow disadvantage the UK. Britain's leading exporters would tell you a very different story - UK exports to South Korea have increased substantially since the EU-SK trade deal, for example.  

In addition, the UK is very good at getting British trade priorities reflected in EU trade policy, for example, one of the products targeted in the EU - India trade negotiations is whisky! Roberto Azevêdo, Director General of the World Trade Organisation stated that Britain risks losing influence in trade negotiations if it left the EU ( and you would expect he knows a bit about global trade. 
Even the winner of the "Brexit" essay competition, much fêted by Eurosceptics, says that outside the EU, the UK would be able to negotiate global trade deals, but this would not be from a position of strength. Or look at it this way; the USA is currently negotiating a free trade deal with the EU which will require both parties to adapt to each other's trade rules, while the US - Chile free trade deal requires Chile to adapt to US trade rules, but not the other way round. 

And finally... 

Another argument that UKIP and Eurosceptic Tories put forward is that the UK should leave the EU because the EU's share of world trade is declining, so it's an outdated concept. It is true that as large emerging markets like Brazil, India and China grow, the share of world trade of the EU (and other industrialised countries like Japan) is shrinking.  

However, there are two huge caveats here. Firstly, this is not a quick process of change, which means that the UK still currently sells more to Belgium (!) than Brazil, so it would not be sensible to turn our back on our EU trade partners right now.  

Secondly, and even more importantly, if current trends continue, then some estimate that 30 years time, there may be no European country in the G8,  but the EU will remain the world's largest single market. So in fact, the Eurosceptic argument against the EU is actually one of the biggest arguments in favour!  

In the future, European countries can retain a strong voice in global trade by acting togetheras part of the EU. I do not want the UK to be on the sidelines without a voice at that moment, but a leading member of the EU. 
As a Liberal Democrat I want to look to the future, protect Britain's economic recovery, retain a strong British voice in global trade and fight for British jobs. The Eurosceptics want to hark back to an imperial past long gone that can never be recovered, ignore the realities of the modern world and put Britain's economic recovery in jeopardy.  

The choice is clear for anyone who cares about the future of the UK; it's In Europe In Work with the Liberal Democrats or out Out of Europe Out of Work with UKIP and Tory Eurosceptics.


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