I understand that there are trade advantages in being in the EU. But are they all that valuable? As yet, I have not seen anything on here, at least, pointing out what Britain will really gain or lose inside or outside the EU.
Japan and Singapore aren’t in the EU or anything like it. Japan isn’t a “continental economy” either, like North America, and it’s utterly dependent on trade for survival. But it does pretty well all the same.
Specifically, what is the advantage, and why is it worth it for Britain other than being able to say it’s part of a big trade organization?
IMHO an exit from the European Union would mean huge economic costs for Britain and no political benefits. For a start, regulatory differences would increase over time, affecting trading volumes and diminishing the attractiveness of the UK for investment. Some business would likely relocate to Eurozone financial centres or Ireland. That’s not counting the uncertainty in global markets. Moreover the UK becomes much less attractive as a gateway to Europe and as a base for corporate HQs, particularly American. Ireland might profit hugely though as a smaller alternative, especially as an English-speaking one for the US.
This would turn other businesses away from investing or trading, although the severity would depend on the ‘model’ adopted post-Brexit. If we took the Norway route and remained in the EEA to keep access to the single market, we would have to pay into the EU budget and apply EU laws but have no say in making them.
This would keep our economy almost as it is but with a heavy price: our democracy would be curtailed. We’d be enacting laws we haven’t made ourselves to keep our economy afloat. That’s what you call a satellite state. That would be a million times worse than any of the problems Brexiters presently have with EU membership - we’d be a vassal. The UK would be in the European Economic Area and maintain full access to the single market, but have to adopt EU standards and regulations without contributing to making them as we do now. Moreover we’d have to join Schegen and thus be unable to impose immigration restrictions - worse than present when we have an opt-out from this.
What if we decide not to have full access to the market? We get to ignore EU standards and regulations but are subject to the EU’s common external tariff, which heavily censors our ability to trade with the EU in goods and services. So no good and we don’t get the benefit of non-tariff barriers to trade having been abolished in Europe through the common system of regulations that member states and those states in the EEA vassalage get. This negatively impacts our economy, as a result, since we have profited from this easy, propitious regulatory environment for decades.
Your analogy with Japan is fair though, since Japan is an island kingdom like Britain.
The first issue I would personally note with Japan is that Japan is not an island located directly next to a continental-wide economy called the “
Asian Union” (AU). If it were an independent state with this Union acting as its primary trading partner and which it was heavily dependant upon, its economy might not be doing so well if it were ‘independent’ from this hypothetical structure.
Take Switzerland. If you read one of my posts yesterday, you’ll know that’s its
de facto in the EEA or ‘single market’ and despite not being an EU member state has to comply with virtual every EU directive and pay into the EU budget - but without any say in how it’s governed.
So let’s imagine Japan is in the same situation (albeit Japan is much bigger) vis-à-vis a humongous continental economy at its doorstep, to which it is tied and has to comply with its legislation to access its single market but has no voting rights to decide the very laws it must enact. Let’s also imagine that like Britain with the EU, Japan needs access to the AU’s fictional ‘single market’ for its service industries. If it becomes independent, that access ends, whereas the AU’s manufacturers are still automatically entitled to unlimited rights to sell whatever they want in Japan under global WTO rules - as would be the case with the EU vis-à-vis Britain.
If Japan rejects these restrictions on national sovereignty, its service industries would be locked out of the AU’s single market and this would adversely affect its economy, which has boomed within the AU.
Would its economy be doing quite so well? You can be as ambitious as you like with trade policy but without leverage, you are not even at the table and your stature is vastly diminished.
The EU is a
sui generis entity, there is nothing else like it in the entire world. As such, its difficult to draw an analogy between Europe and the rest of the world owing to the enormous chasm of difference created by the existence of the single market.
To properly apply the situation to Japan, you cannot take Japan as it is - you have to imagine a very different East Asia from the one we have today.
The single market exists and will continue to exist post-Brexit. The odd thing is, Britain would still want access too it.
But without membership, access to it amounts to vassalage to the EU.
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