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PRESERVING TRADE, PRESERVING JOBS?

 

 

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Short article

 

 

The UK could soon swap being in the EU for a neighbourly relationship based on trade and cooperation.

 

One question asked is “How would we maintain trade with the EU and the rest of the world?” EU supporters raise the threat of our motor exports being penalised, and even a trade war.

 

Fortunately, both the UK and the EU are members of the World Trade Organization (WTO), a wider trade body that has slashed world trade barriers during the last 50 years. One of its principles is that once trade is freed up, it stays free, and it is looking to further grow trade by reducing barriers.

 

With the continental economies in difficulty, the EU supports these WTO goals. The other 27 EU members sell us more than we sell them, so would come off worse in a trade war. But nobody wants hostilities that would cost jobs and send the world’s stock markets sliding.

 

Apart from freeing up trade in Europe, it has already free trade agreements with countries as varied as South Africa, South Korea, Israel and Mexico – we don’t need to be in the EU to trade with it.

 

In fact, the EU has committed to ‘the freest possible trade’ with neighbouring countries - free movement of goods, services and investment - and peaceful co-operation. So there is every indication that we’d be able to carry on trading with the Single Market.

 

So what if the UK left the EU? There are two other important issues.

 

Existing World Trade Agreements

Because the EU has negotiated several trade deals on our behalf, they would technically need to be transferred into our name. Our joint involvement with the WTO could help manage this, and ensure the stability of the world trading system. The WTO can resolve disputes and insist on compensation where the rules have been broken.

 

New Trade Agreements

As an independent country, and one of the world’s biggest economies, there is also nothing to stop us co-operating with the EU (and others) to secure wider trade deals - if and when our needs coincide. So any free trade deals in the pipeline, such as possibly with the USA, need not be dropped.

 

 

 

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This page compiled: 25 May  2014.