Tuesday, 2 April 2013

Thinking about Europe Part Three

In the first two parts of my investigation into all things EU I tried to lay out the facts.

I took those who read it through the “how we ended up in” story and how things have changed since we joined the Common Market all those years ago. The Maastricht Treaty which changed it over to the European Union and the way in which it now ‘earns’ its money and where it spends it.

The fact is (as Nigal Farage delights in telling us) that almost all of that stuff weights against the UK and leaves us wondering why we got into this mess in the first place. But the fact is we did, we enjoyed 10 years of amazing growth as a direct result of being in and we slipped into a sloppy routine of relying on the EU to buy our exports and feed us.

So whilst the people of Britain now have a thirst for independence again (not as big a majority as UKIP would have you believe but still a majority) there are some practical things to think about here.

My little investigation was to help me. I like to understand things before I start supporting them and the blind simplicity of the UKIP argument (coupled with the fact they get very close to being racist) meant I couldn’t just jump on their, or anybody else’s bandwagon without thinking it through.

It is no coincidence, therefore, that this third part has taken time to write and publish.

It is undoubtedly true that we don’t belong in the EU; few British people describe themselves as European, we operate very differently (we are instinctively free trade people, they are socialists who seek the collective good) and many Europeans resent the artificially high influence we have on global affairs – derived from our history certainly, but still a big factor in the UK economy.

Little has been said across Europe about the massive efforts the UK has made to refocus its export trade since 2008 either. In 2008 56% of all UK exports were to EU countries; in 2012 that’s dropped to 37% and it’s still going down. True, UK exports as a whole have declined massively and some of that fall is simply by us taking up the slack in our system elsewhere in the world, but the strides made in India and Brazil are quite extraordinary. Britain is preparing to leave and the EU knows it.

But my paper isn’t about what other people think, it’s about where I stand. And that’s a tough one; in fact it’s much tougher now than it was when I started this little exercise.

I believe that both the Conservatives and Labour will finish up putting a referendum in their manifesto’s. I say this because whilst it is certain the Conservatives will do it, I think the issue will so polarise the next General Election, that Labour will realise that if they don’t offer one they’ll lose purely on that issue. What seems certain to me is that by the time of the next General Election things will be a lot closer than they are now and the departure of David Milliband will push the Labour Party more to the left and increasingly unelectable; so they’ll need every advantage they can gain and leveling the playing field on Europe will be one such advantage.

I also think we will vote to leave (as do all our politicians) but I think it will be close. I’d venture to guess as close as 1% either way perhaps. And that’s when the issues start.

So here’s why I’ve been mulling this over. You see if we were to leave and turn our back on the EU we are finished. Our economy would collapse in on itself. There is too much interplay between us and continental Europe and you cannot just walk away from that.

UKIP says we should re-establish the ties with our Commonwealth partners and create a Commonwealth Free Trade Association. Quite frankly it’s bunk. First, it presumes they want to trade with us but more importantly the key question must be if there is anything to trade.

Australia is now part of the Asian Trade Association and has publicly stated that its future lies there. India is making fantastic progress in being the first country to win a free trade agreement with China; what on earth do we have to take to that party. So whilst there is undoubtedly trade there, we will not be at the centre of some huge mothership steering the Commonwealth to greater glory.

But there are two options open to us. Whist Obama sends his Ambassador to tell us that leaving the EU would damage UK/US trade, the Republicans in the Senate have already told our leaders that they want us to be part of NAFTA (The North American Free Trade Association) and have outlined why they want us in and the benefits for us.

On another tack, this thing exists as a loose formation called the NORC (Northern Rim Countries). It includes Russia, Norway, Canada, USA and Iceland). These countries have been quietly, and without conflict, slicing up the Arctic where the largest energy reserves on the planet currently sit. Furthermore, with melting permafrost, there are huge on land reserves in Canada and Russia that can be explored. Energy will be the biggest currency of the next 50 years (just like it was the biggest of the last 50 years) and I don’t care what anybody says, the world has a thirst for oil and gas (not wind) and will continue to do so. The NORC will become the worlds richest area.

The Republicans know this and, when you look at a map of the NORC territory we, the mighty UK sit right in the middle of it; we don’t have any of the reserves but we sit strategically in the middle. And the Americans and the Russians trust us – opportunity knocks!

I said in my last paper that the EU has failed to make any free trade arrangements on the world stage. In fact, the Doha Round which was supposed to open the world up to free trade, was scuppered by the EU. There are many countries within the EU who know they need trade agreements outside their own boundaries but one, France, fears agricultural destruction and agriculture is always a key to free trade. Each time the EU tries, the French kill it and they will continue to do so as they simply cannot afford for their farming industry to be opened to competition. The French grip on the CAP is well known, they promote inefficient farming to preserve their way of life, and expect the rest of Europe to pay for it.

So my conclusion is this.

In qualified form I believe we will be better off out.

We cannot join EFTA like Norway and Switzerland as this is a truly restrictive outfit which is forced to take all EU legislation without any representation in exchange for trade openings. We do need to negotiate with the EU to keep trade entry points but we won’t get much.

As exit is inevitable in my view we need our politicians (behind the scenes I accept) talking to the Republicans in the USA, the Russians and the Canadians. We need to be prepared.

Recent trade visits by David Cameron are opening up China and India but this will never be anything other than a small part of what we need to grow. But imagine if our financial services products were deregulated in the USA, if our foreign exchange became the hub of NORC trade, if our technology could find investment in exploration and manufacture in a favourable market, then we would be cooking on gas (forgive the pun).

There is a future out there, without the stranglehold of the EU where the UK can be great again. Perhaps Scotland will by then be crippled inside the Eurozone, but England has a future outside of Europe.

So, in the words of that detestable Scots Dragon “I’m out”.