So now George Osborne, putative successor to David Cameron as British Prime Minister (at least in his own eyes), has brought to an end his trip to Berlin to tell the Germans what Britain wants from a “new relationship with the EU”. Except he didn’t tell them what the British public wants, and basically all it wants, which is the freedom to impose on EU citizens immigration controls similar to those it applies to the rest of the world.

This the EU has repeatedly said it will not grant while Britain is a member of the EU.

What on earth does Cameron think he is doing in dragging himself (and Britain) round 27 EU capitals to persuade them of the impossible, and for what exactly?

Britain pays what is effectively a tariff of 8% on its merchandise sales to the EU

Per annum Britain sells into the EU “Single Market” around £145 billion of goods (which includes nearly all our oil exports) and £75 billion of services (which includes tourism into the UK and air fares paid in the UK).

For this so called “Single Market” access, we make around £12 billion payments net per annum to the EU.  This is equivalent to an 8% tariff on all goods sales (services don’t usually bear tariffs), effectively a binding tariff which is set to increase very markedly by 2018.

The USA sells around £148 billion worth of goods to the EU, almost exactly the same as the UK, and pays an average of about 5.5% in tariffs[1] (which both sides – the EU and the USA – are committed to eliminating). The USA, like every other country outside Europe, and Russia, pay absolutely nothing for their access to the “Single Market”.

Britain is thus well on the way to paying the EU an effective tariff which is double what the USA, China, Korea, etc. currently do, without the opportunity to impose reciprocal tariffs on EU imports into Britain. Of course the firms supporting the CBI’s “stay in the EU” stance don’t care because it is the British taxpayer, not the exporting companies, who pay the effective tariff and the British government who forgoes the duties on EU imports.

Only a Trade Agreement between an Independent Britain and the EU 27 will meet the needs of today and tomorrow

The only “new relationship” worth negotiating now is a Free Trade Agreement between an independent UK and the EU. This the EU would have to negotiate, given their public commitments at the last World Trade Organisation conference on reducing trade barriers (at Doha in 2012) and indeed the provisions of their very own Lisbon Treaty (Article I and Article III).

Why don’t Cameron, Osborne, Rose et al bring their humiliating “renegotiation” charade to an end, bring forward the referendum to May 2016 with a government backed recommendation to leave the EU, rejoin EFTA, and negotiate a proper UK-EU Treaty embodying the present tariff-free trading arrangements with the Single Market?

Can Cameron and his CBI supporters not see that resuming the UK’s independent place in the World Trade Organisation where international trading power increasingly resides, will more than compensate for the nebulous loss of influence in the councils of the EU, and will give a £12 billion reduction in both our external current account and internal fiscal deficits.

End Note

[1] World Trade Organisation publications on tariffs between countries 2014, 2015.

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