Countries with current EU trade agreements and ongoing negotations
25th February 2016
So it’s going to happen, and we now have a date as well. On the 23rd June our nation votes on staying or leaving the European Union. What does it all mean?
The first and easiest thing is that the government has delivered on our election manifesto commitments of a Referendum Act, a re-negotiation and then the Referendum itself. Those who said that the Conservatives wouldn’t deliver a Referendum and you couldn’t trust David Cameron have been proved wrong.
Then there is the substance of the re-negotiation. Many said that we wouldn’t be able to get out of an ever closer union, wouldn’t be able to legislate to protect us as a non-Eurozone country, can’t get the EU to focus on business, and couldn’t deliver any changes to welfare benefit or immigration control. The Prime Minister’s re-negotiation has addressed all of those, although there are different interpretations of his success.
Some say the deal is not legally binding: that the European Court of Justice can unpick it all because it’s not a treaty. The President of the EU says no, the deal is binding, the ECJ must take it into account and the deal will go for legal ratification. His and the PM’s view is supported by both our current and former Attorney Generals. No doubt the argument about sovereignty will continue for the next four months.
The renegotiation includes an emergency brake on working benefits (tax credits), which can be banned for four years, and curbs on child benefit, restricted to the rate of the country where the children are living. At the same time the importance of the European Arrest Warrant (EAW) is enhanced by our new ability to control our borders – banning EU passport holders whom we suspect of sham marriages, or of criminal intentions, or even of preventing our policy objectives (which can include, for example, employment goals). Some are cynical about what difference this will make, but these stronger safeguards are why Theresa May, a noted EU sceptic, is supporting the In Europe for Britain team. The campaign is also backed by many generals who all say that leaving the EU now, at a time of great insecurity and heightened risk (especially with Russia), would be a bad mistake: they urge voters to vote to back our membership to protect our national security.
Then there is the trade and diplomacy element. The Prime Minister said we are out of the euro, Eurozone bailouts, the ever closer union, and any European Army, and have agreed the EU should move faster to implement Free Trade Agreements (FTAs). Some who support Leave EU claim that pulling out would stimulate business with the ‘new world’ i.e. the Commonwealth, Asia and Africa: freed from Europe we would forge ahead with a snowstorm of new free trade agreements.
Now I have serious reservations about many aspects of the EU. I do find some EU legislation frustrating, the power of the ECJ tiresome. I’m not convinced of its strategy for our continent. But on trade, I part company with the Leave EU campaign. In three years as a Trade Envoy to SE Asia, and much longer living and working in Asia and Africa in both business and diplomacy, I have not yet met a representative of any of the 10 SE Asian countries who thinks it would help Britain to be outside the EU: or that a bilateral trade deal is waiting to happen as soon as we leave the EU. It is not. In fact, our friends want to see us at the heart of Europe. We already have 33 FTAs via the EU and several more in the pipeline. Leaving the EU would mean going to the back of the queue and patiently re-negotiating a lot of EU deals, let alone other agreements. We would probably get there – but how long would that take? Our bilateral FTA with Jamaica took, from memory, about 14 years.
The US Trade Representative highlighted the risk by saying this week that the US was not in the business of bilateral FTAs and that he wanted to see Britain playing a key role in the FTA with Europe (the TTP) as soon as possible. So, far from holding us back from doing deals with the US, India and China, our role In Europe for Britain increases our ability to get the trade deals we want – and the recent EU FTA with Vietnam is a good example. All of our friends want us to stay in the EU: the only leader in favour of Brexit is Putin. I wonder why.
Meanwhile no country not in the EU has been able to negotiate free trade with the EU without paying for the privilege or accepting free and open movement. What is the model for this that the Leave Campaign recommends? The model of Norway, where they have no seat at the table but have to comply with all EU legislation, is not a good model. The Swedish Conservative leader said “if you want to rule Europe, be in the EU: if you want to be ruled by the EU, leave it”. And I’m not convinced that the reduced free trade between Switzerland, in an agreement which took 8 years to negotiate, while Switzerland has had to accept large numbers of EU immigrants, is attractive either. Those who argue that we import more than we export, and therefore that the EU will obviously want to sign an FTA, are being naïve. They forget firstly that we generate a significant surplus from our services, which many EU countries would like to reduce or prevent, and secondly, the inevitable temptation for the EU to make life difficult for us after we have left the EU. Already the noises from the French about whether the bilateral agreement on refugees in Calais would continue after Brexit highlights potential risks for us.
If there are real risks for us from leaving, I am also clear that voting to Leave means just that. There will be no second Referendum, no chance of another re-negotiation: two years for sorting the details of Brexit, and when that’s over we would be out. For ever.
So this is the most binary vote of our lifetimes. In elections, if we vote for an individual or a party and come to regret either, there is always a chance to vote them out next time round. But this Referendum will settle our membership of the EU once and for all.
As the two sides line up, there is one other voice that will speak – the markets. Already sterling has dropped to its lowest level for seven years, and Moody’s the rating agency predicted a drop in the UK’s credit rating. A shrinking pound means we pay more for our imports and pushes up the cost of living for most, while our credit rating determines the cost of our debt. It leads to the government paying more when it borrows – and we are a gigantic borrower. Paying more interest means less money for the NHS and care, and leads to higher mortgage costs. The bottom line is that markets like stability, not risk and uncertainty, and if it looks as if Britain is going to Leave, markets will get rougher.
So I hope that all my constituents will think hard about the big issues of sovereignty, law making, immigration, benefits and control of our borders: and practical issues of what is better for us – what will make us more secure from terrorists, more likely to succeed in tackling climate change (e.g. floods), more likely to provide jobs for our children and grandchildren, to grow our exports of goods and services, and succeed as a nation.
On all of these issues there are arguments both ways. I will not argue with those who reach the conclusion that it is best for us to leave the EU. But my own conclusion is that we are Better off Together, better in a reformed relationship with the EU that the Prime Minister has achieved (and which many in the Netherlands and Germany are now looking at with envy). So last night I joined the launch of the Europe for Britain campaign.
This referendum is not an election, and it’s not about me. I’ve just tried to frame the questions that I think matter, and offered my own thoughts. From here on this is about YOU. There will be lots written and said, and there is time enough for us all to be very glad when the Referendum is over. The result, nonetheless, will define what Britain is and will be, and I will try to answer any queries as best I can, and as objectively as possible. But I will not be neutral when the time comes,and I hope that all of my readers, whatever your views, do go out and vote on June 23rd.