https://drive.google.com/file/d/0B6XGVYOX4bRUZDdlcGpPNElJWHc/view?usp=sharingUK - EU TRADE: THE MYTH EXPOSED
Given that:
There is NO CASE that EU membership is good for UK exports or for foreign
direct investment
and;
the UK does NOT need to be in OR have a trade agreement with the EU to trade with
it cost our economy about £185 billion/annum in 2014 to be in the EU, of which
the UK paid £12.3 billion net to the EU budget, (about £450/household)
it cost UK householders £27 billion to be in the EU in 2014, (nearly £1,000/household)
it therefore cost each household about £1,450 to save UK exporters just
This note therefore asks WHY
bearing in mind there is NO CASE that EU membership is good for UK
exports or for foreign direct investment, do politicians and the CBI insist that;
to save our exporters to the EU the equivalent of just £85/annum for each household
all UK households must pay the EU about £1,450/annum each, which is a complete waste
of money and
they want to cripple the UK economy with the overhead cost of £185 billion/annum
(£6,850/household) it costs the UK to be in the EU which,
MUST SERIOUSLY REDUCE THE UK’S EXPORTING PROSPECTS TO THE
REST OF THE WORLD AND THE EU?
the EU
£85/household on EU import duties (about £2.28 billion).
UK - EU TRADE: THE MYTH EXPOSED
1. Introduction
HM Government justifies UK payments to the EU on the grounds (unsupported by any evidence)
that “the UK needs to be in the EU for trade”.1 This note claims that not only is this untrue, but that
the opposite is true, as UK exports to the EU, and the rest of the world, are much more likely to be
penalised due to its membership of the EU.
2. EU membership and trade
The table2
members of the EU’s single market between 1993 and 2011. The table is taken from the report
“Where’s the insider advantage”? by Michael Burrage, published by the think-tank Civitas, except
for the fourth column which has been added by this author. It proves beyond any doubt that;
it is NOT necessary to be a member of the EU to access the EU single market and
export successfully to the EU
it is NOT necessary to have a trade agreement with the EU to export successfully to the
EU and,
the USA, China and Russia are the top three largest non-EU trading partners of the EU,
none of which have trade agreements with the EU or membership in the EU single
market. They trade based on the rules of the World Trade Organisation (WTO).
Hence the UK does NOT NEED TO BE IN THE EU to trade3 with the EU or with other
countries.
This is a complete contradiction of the UK government position
Even worse, all the countries associated in any way with the EU through membership (UK) or
EFTA (Norway, Switzerland,) are generally not doing as well in their export performance to the EU
as many countries outside the EU.
3 UK’s insider advantage?
In his report2
There is no case that EU membership is good for UK exports or
.
The fact that the UK is the second largest net contributor to the EU’s budget clearly does
not grant us any favours when it comes to exports to the EU
The UK has not had a balance of trade surplus in goods since 1981, after just 8 years of
joining the EEC.
Furthermore, out of the EU, the UK must be in a much stronger exporting position with the
rest of the world (ROW) without the enormous overhead cost of being in the EU.
Hence there is a very good case that OUTSIDE the EU the
in Appendix 1 lists the top 35 fastest growing exporters of goods to the 11 founding
, Burrage importantly concludes that;
foreign direct investment
UKwould also increase its exports to the EU!
4. UK Trade with the EU and USA compared
In 2014 the UK had a trade SURPLUS of £26 billion with the USA. In the same period the UK
exported goods and services worth £228 billion to the EU. But the UK imported £289 billion worth
from the EU, giving the UK a trade DEFICIT in goods and services of over £61 billion with the EU.
In order to achieve this vast deficit with the EU the following conditions were applicable:
According to Professor Tim Congdon, (“How much does the European Union cost Britain”?
2015)
The USA cost us nothing
The £185 billion cost included £12.3 billion1 as the net payment to the EU’s budget,
(£450/householder). To the USA, nothing
It cost UK householders an extra £933 on their shopping to pay for the EU’s Common
Agricultural Policy (CAP), VAT and green levies4
the USA, NIL.
UK exporters saved about £2.28 billion on import duties because the UK was in the EU
(average import duty about 1%)5 about £84/household
So to be in the EU it cost UK householders about £1,450 compared to £84/household
saved on EU import duties by UK exporters. Is this a good “investment” for UK
householders and taxpayers? They paid the USA nothing.
Furthermore, it should be noted that the import duty saved goes to the exporters, whereas
the £1,450/annum cost of being in the EU is paid personally by UK taxpayers and
householders out of their taxes and take home pay.. Hence they are all subsidising the
profits of big business. No wonder the CBI insists that we must stay in the EU!
5 Total UK - EU trade deficit & cost
Since joining the EEC in 1973 the total accumulated current value to 2014 of the UK’s balance of
trade with the EU is a DEFICIT of over £1 trillion, (see Appendix 2). How has the UK paid that
amount? Through our current national debt which is well over £1.6 trillion? This is financially
incompetent, bearing in mind that since 1973 to 2012 the current accumulated value of the UK’s
trade with the ROW was a SURPLUS of £245 billion!
In addition, the total accumulated current value of the cost to our economy of being in the EU since
1973 could be in the order of £8.6 trillion. This is based on assuming an annual increment in the
cost of the EU of £4.4 billion every year since 1973 to Congdon’s figure of £185 billion for 2014.
Each years assumed cost is corrected to 2014 value by using the economic status value from the
“measuringworth” web site (see Appendix 2). It is stressed that this figure of £8.6 trillion is NOT,
repeat NOT, being suggested as the definitive cost of being in the EU. It is merely being included
as an example of how much better off the UK could be now if we had never joined the EU in 1973.
In fact it could be seriously low, as capital costs of EU regulations are ignored. For example, the
£48 billion cost of the EU’s water directives, worth nearly 11 years of increments, is not included.
6 Reasons for staying in the EU?
The CBI, Conservative, Labour and Lib Dem parties all insist that the UK stays in the EU, citing the
“need” to be in the EU “for trade”. This is quite clearly a complete fabrication which has cost our
economy, taxpayers and householders dearly, not to mention all the political and social problems
that EU membership inevitably entails. There appear to be three main reasons why EU
membership suits big business exporters to the EU. These are:
the UK faces an annual burden of £185 billion to be in the EU, (£6,850/household).
4
Big business can afford to pay for thousands of lobbyists in Brussels to promote its
interests in any new regulations, etc. This is often to the detriment of SME’s which do not
export to the EU and do not have access to the same level of coercion.
Big business welcomes mass uncontrolled immigration from EU countries with a low
standard of living. This helps to depress wages in the UK. It also limits the jobs market for
native born British citizens.
Big business saves on average about 1% on import duties due to being in the EU. In 2014
this only amounted to about £2.28 billion, a pitifully small amount compared to the personal
costs to UK householders and the UK economy due to being in the EU.
None of the reasons given above are beneficial to the UK population as a whole, but as the three
political parties referred to earlier rely on big business for funding they all support staying in the EU
to earn their money. They use the spurious statistic that “3 million jobs depend on our being in the
EU”. This is clearly a deliberate distortion of the fact that jobs depend on our trade with the EU and
not our membership of the EU. Also, there are about 31 million employees in the UK. So by their
own admission about 28 million employees have NOTHING to do with exports to the EU, yet they,
plus the 33 million other UK citizens are still penalised by the cost of EU overheads.
7 Comment
Obviously, the UK’s exports to the EU are important for the UK economy, but remember
THERE IS NO CASE THAT EU MEMBERSHIP IS GOOD FOR UK
EXPORTS OR FOREIGN DIRECT INVESTMENT
UK EXPORTS TO THE ROW AND THE EU ARE MUCH MORE LIKELY TO
INCREASE THAN DECREASE WITHOUT THE EU ANNUAL £185 BILLION
OVERHEAD COST OF EU MEMBERSHIP
So WHY do the CBI and politicians insist that we stay in the EU when it is obvious that
THE QUICKER THE UK COMPLETELY LEAVES THE EU THE BETTER,
FOR OUR EXPORTERS, OUR INDUSTRIES, OUR BUSINESSES, OUR
J G Wraith
6 Jan 2016
[email protected]1 Ian Milne, Global Britain British Trade, Briefing Note No 108, published Nov 2015
2 M Burrage, “Where’s the insider advantage?” Civitas, 2015, (except last column which has been added by
this author).
3 Lord William Dartmouth, MEP, EFD Coordinator on International Trade Committee, “Out of the EU, into
the world”
4 Prof. T Congdon, “How much does the European Union cost Britain?”,2015.
5 House of Commons Library, “The economic impact of EU membership on the UK”, Standard Note
SN/EP/6730, September 2013. (Quoted in Brexit Magazine No 2, published by the Better Off Out
Campaign.)
HOUSEHOLDERS AND OUR TAXPAYERS
TOP 35 FASTEST-GROWING EXPORTERS OF GOODS TO 11 FOUNDING
MEMBERS OF THE EU SINGLE MARKET
Rank % growth Exports/month in 2011 Cost of Being in EU
in US $(1993) In US $bn(2011) in £ Billions
1 Vietnam 544 0.4 0
2 Qatar 496 0.3 0
3 Ukraine 446 1.1 0
4 China & Hong Kong 429 15.3 0
5 United Arab Emirates 402 2.8 0
6 Russia 377 7.8 0
7 India 367 3.4 0
8 Brazil 357 3.4 0
9 Turkey* 295 6.2 0
10 Nigeria 250 1.1 0
11 Australia 243 2.6 0
12 South Africa* 224 2.1 0
13 Chile* 198 0.6 0
14 Korea* 197 3.0 0
15 Mexico* 176 2.1 0
16 Morocco* 170 1.5 0
17 Singapore 163 2.3 0
18 New Zealand 147 0.3 0
19 Canada 142 2.3 0
20 Bangladesh 129 0.1 0
21 Bahrain 129 0.1 0
22 US 126 22.2 0
23 Switzerland* 114 11.8 ?
24 Saudi Arabia 114 2.3 0
25 Norway* 114 2.7 ?
26 Kenya 99 0.1 0
27 Egypt* 96 1.1 0
28 UK 81 23.9 1853
29 Israel* 51 1.5 0
30 Japan 51 4.7 0
31 Taiwan 50 1.5 0
32 Iceland* 48 0.1 0
33 Thailand 48 0.9 0
34 Kuwait 21 0.3 0
35 Indonesia 12 0.6 0
Source:
www.oecd-ilibrary.org.OECD database Monthly Statistics of International Trade
* Countries with trade agreements with the EU.
The table above is taken from the report “Where’s the insider advantage”? by Michael Burrage,
published by the think-tank Civitas, except for the fourth column which has been added by this
author
CUMULATIVE ANNUAL COST OF EU BASED ON CONGDON (£ BILLIONS)
CUMULATIVE UK – EU BALANCE OF TRADE (£BILLIONS)
YEAR t y=4.4t 2014 ACCUM UK-EU 2014 ACCUM
1973 1 4.4 87.31 87.31 -1.674 -33.22 -33.22
1974 2 8.8 155.7 243.01 -2.592 -35.38 -68.6
1975 3 13.2 188.4 431.41 -2.831 -40.41 -109.01
1976 4 17.6 212 643.41 -2.536 -30.55 -139.56
1977 5 22 227.4 870.81 -2.215 -22.89 -162.45
1978 6 26.4 234.9 1105.71 -2.92 -25.98 -188.43
1979 7 30.8 231.8 1337.51 -2.995 -22.54 -210.97
1980 8 35.2 226.3 1563.8 0.815 5.24 -205.73
1981 9 39.6 230.1 1793.91 1.694 9.84 -195.89
1982 10 44 233.1 2027.01 0.813 4.31 -191.58
1983 11 48.4 234.1 2261.11 0.041 0.2 -191.38
1984 12 52.8 238.1 2499.21 -1.029 -4.64 -196.02
1985 13 57.2 235.4 2734.61 -1.496 -6.16 -202.18
1986 14 61.6 236.1 2970.71 -8.832 -33.85 -236.03
1987 15 66 228.1 3198.81 -12.889 -44.54 -280.57
1988 16 70.4 217.2 3416.01 -18.175 -55.54 -336.11
1989 17 74.8 209.1 3625.11 -20.811 -58.16 -394.27
1990 18 79.2 204.2 3829.31 -18.393 -47.43 -441.7
1991 19 83.6 205.6 4034.91 -5.793 -14.25 -455.95
1992 20 88 209.1 4244.01 -11.823 -28.1 -484.05
1993 21 92.4 209 4453.01 -13.207 -29.88 -513.93
1994 22 96.8 208.5 4661.51 -12.523 -26.97 -540.9
1995 23 101.2 208 4869.51 -12.5 -25.7 -566.6
1996 24 105.6 203.8 5073.31 -5.485 -10.58 -577.18
1997 25 110 202.5 5275.81 -4.845 -8.92 -586.1
1998 26 114.4 201 5476.81 -5.923 -10.41 -596.51
1999 27 118.8 200.8 5677.61 -9.812 -16.58 -613.09
2000 28 123.2 196.6 5874.21 -6.823 -10.89 -623.98
2001 29 127.6 197 6071.21 -13.403 -20.69 -644.67
2002 30 132 194.6 6265.81 -23.603 -34.79 -679.46
2003 31 136.4 189.5 6455.31 -27.261 -37.88 -717.34
2004 32 140.8 186.5 6641.81 -30.34 -40.2 -757.54
2005 33 145.2 183.4 6825.21 -37.372 -47.21 -804.75
2006 34 149.6 179.8 7005.01 -29.616 -35.6 -840.35
2007 35 154 176.9 7181.91 -35.235 -40.47 -880.82
2008 36 158.4 178.9 7360.81 -28.582 -32.28 -913.1
2009 37 162.8 189.7 7550.51 -27.957 -32.63 -945.73
2010 38 167.2 186.8 7737.31 -28.5 -31.84 -977.57
2011 39 171.6 186.2 7923.51 -21.7 -23.55 -1001.12
2012 40 176 176 8099.51 -39.5 -42.17 -1043.29
2013 41 180.4 180.4 8279.91 -56.5 -57.17 -1100.46
2014 42 184.8 184.8 8464.71 -62 -62 -1162.46
TOTALS 3973.2 8464.71 -646.33 -1162.46
