Leaving the European Union
Key Facts and Data for the General Election 2015
What will happen to our trade with the EU when we leave and rejoin EFTA?
The answer is: “Nothing”.
Despite the windy talk by assorted corporate bosses, including foreign firms like Siemens, who have no business intruding into British politics, the EU is bound, like Britain, by its membership of the World Trade Organisation (WTO).
The WTO requires its members not to raise tariffs against other individual countries. If it raises tariffs against one, it must raise them against all.
Will Britain be “alone” in the World as some commentators suggest?
The answer is: “Of course not”.
The UK is a member of more groups than any other country[1] and will remain so, with EFTA – the European Free Trade Area replacing the EU in the list. It is currently the sixth largest economy out of 194 in the world, the fifth largest by population of the industrialised countries, the fourth in the world by military expenditure.
What Advantages will membership of EFTA bring?
Through its EFTA membership the UK will not only retain tariff-free trade in industrial goods with the EU, as now, it will also become a participant in the 26 trade agreements with other countries which EFTA already has. These include two of the three NAFTA countries – Canada and Mexico – where we urgently need to increase our exports to. Britain will also be free to negotiate its own agreements with Australia, New Zealand and South Africa, among others.
What Agreement will an independent UK seek to make with the EU?
There are two basic objectives for UK negotiators:
(1) There should be no adverse change in the regulations attaching to the flow of goods and services between the UK and the EU. In particular the current VAT forms could be retained for EU-UK trade.
(2) The annual costs of EU membership(£10-15 billion net) to be tapered off to zero over a four-year period[2].
There are a number of other objectives, of which setting up a UK-EU Council is probably the most important.
UK-EU Council
This Council would have as its basic objective the resolving of any problems faced by our mutual trade which could arise from future wishes of either party to introduce new or modified standards for the quality of products. The Council would have no legislative role.
How much clout would the UK have in post-Brexit negotiations?
The UK will have huge clout deriving from its position as the single largest market for EU goods (bigger than the USA)[3] and the equal second largest supplier after China.
In the UK-EU Council, once set up, Britain would have 50% of the influence in negotiating future changes in our trading relationships. In the EU the UK has at most 12% of the vote in the European Commission and Parliament.
What legal processes are involved in Britain’s leaving the EU?
Within the UK, the basic instrument of change will be the Repeal of the European Communities Act (ECA) 1972.
This has been interpreted by the judiciary as giving legal cover to every directive and regulation imposed on Britain by the European Union and its predecessors, the EEC and the EC.
Repeal of the ECA is the essential means of recovering Britain’s independence, but it will not mean repeal of all the European directives and regulations imposed since 1973. But future governments will be free to amend, repeal, or replace any such instruments as they see fit and submit the changes to the British people and Parliament.
Within the EU, the chosen legal instrument for negotiating the exit of a member country is Article 50 of the Lisbon Treaty. This sets a limit of 2 years for conclusion of negotiations, but requires all 27 other members to agree. Britain could invoke the 1980 Vienna Convention on Treaties if some members tried to spin out negotiations.
What particular targets would be among the first that a British government would wish to achieve with its new-found freedom?
Clearly there will be a variety of views, but the following priorities are unlikely to be politically contentious in Britain:
(1) Apply to EEA citizens the same immigration controls as the UK applies to all non-EEA citizens. This could include offering EEA[4] citizens visa waiver agreements as currently applied to the JACANZ countries[5].
(2) Re-establish UK control over fishing in that 70% of the Continental Shelf which International Law assigns to Britain, and ensure that new investment into the British fishing industry becomes a priority.
Endnotes
[1] The UN Security Council and all other UN agencies, the World Bank, the World Trade Organisation, NATO, the Commonwealth, and many others.
[2] This corresponds to the typical EU programme cycle which Britain makes a contribution to, including the most expensive – the regional growth funds, and the Common Agricultural Policy.
[3] Imports plus exports 2011: UK-EU £495 billion; EU-US £403 billion; UK-US £206 billion.
[4] EEA = EU plus Norway, Iceland, Lichtenstein.
[5] Japan, the USA, Canada, Australia, New Zealand.
