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Fact Checking British Influence: Wildly Inaccurate

Jonathan Lindsell, 4 March 2013

British Influence have been at it again: presenting opinion as objective fact. In the aftermath of UKIP’s recent vote surge, Peter Wilding attacks UKIP with so wide a scattergun that the entire Eurosceptic project is targeted. He writes,

Leaving the EU would not be an economic liberation. It would resolve none of the domestic failings that are the main constraints on Britain’s long-term growth. It would do little to lighten the regulatory burden on British business.”

This is simply unknowable. Mr Wilding cannot predict the future. However, it is absurd to deny the possibility of richer pastures outside Europe. Depending on how a future government acts, leaving the EU certainly could be an economic liberation. This would be true in literal terms, in that the government would have full control (‘competence’) of its own tax, economic, banking, employment and trading affairs. It might be true in specific terms, too – independence would allow the government to contemplate much greater State Aid and UK-preferential procurement procedures, which are currently prohibited on the basis of common market competition. Greater funding for small and medium enterprises, cheaper ‘government loans’, investment in infrastructure projects above and beyond the mythical third runway and HS2 –  all of these would help ‘resolve the domestic failings’, as indeed would substantial research & development grants.

Leaving certainly could lighten the regulatory burden – a priori, without a supranational power directing Whitehall, it is perfectly conceivable (if somewhat unlikely) that regulation is eliminated entirely. Given that Michael Fallon, Minister for Business, has been pruning back red tape back as far as his EU secateurs will allow him, we might reasonably surmise that much more could be cut with a Westminster strimmer.

Foreign Policy

Wilding next brings up the example of Mali to explain why we need to be in the EU to keep up defence capability. This is rubbish. The forces deployed in Mali were not an EU Battle Group. Francois Hollande spoke to David Cameron, and they agreed what to deploy where bilaterally, just as allies do across the world without needing to be in a prohibitive customs union together. As for the threats Russia, the Middle East and North Africa, Wilding would do well to note that the Foreign Office, usually the pillar of Europhilism, is squeamish about relying on European military power. Why? Because the Americans might feel NATO is being snubbed, and pull out. Then we’d know what a threat looked like.

Growth

Wilding sings the single market’s praises in entirely abstract terms (unlike Vince Cable) and notes that Swedish Finance Minister Anders Borg is demanding an expansion of aggregate demand across the EU. This is all very well, but doesn’t seem to contain any argument against leaving the EU – at present Spain and Greece are teetering on failed statehood, France looks a bit wobbly, Germany is profiting from the deflationary Euro, and the headline economic policy is to stop bankers being paid too much. I am not aware of a continent-wide plan for a demand stimulus.

The prospect of a Free Trade Agreement (FTA) between the USA and EU is the next carrot with which Wilding tempts readers. He seems unaware that this particular carrot is extremely old, rotten, and unlikely to satisfy.

You may know of the ‘success stories’, South Korea and Mexico. What you probably don’t know is how many other FTA negotiations have been dragging on for years and years. The EU has been negotiating ‘CETA’ with Canada since 2007. Talks with the GCC (Gulf Co-operation Council, i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) have been ongoing since 1991 and haven’t moved since 2003. As Cameron and Hollande’s visits subtly reminded wonks like myself, an Indian FTA has remained elusive since 2007.

Indeed, the one FTA is seems to be making real progress is with Singapore. Don’t be fooled, though: the original intention was a grand FTA between the EU and ASEAN (Burma-Myanmar, Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam) which stalled so comprehensively that the commission realised it would need to deal with these states individually. [All of this can be read on the EC’s website.]

What’s the lesson here?

Simply, as I argued last month, that EU Member States have too many idiosyncratic pockets of protection to effectively negotiate FTAs with large economies. An FTA with the United States, with its bizarre doublethink regarding the benefits of Free Trade, but hatred for outsourcing, agricultural or automotive competition, will not happen in the foreseeable future. A UK-USA FTA, which agreed to the protection of specific sectors but galloped onwards without needing to convince 27 other partners, is far more realistic.

Wilding throws in one last mistake towards the end:

The UK would not be covered by the EU’s FTAs were we to leave and it would take many years before it could negotiate and implement its own FTAs.

This is presented as concrete fact. It isn’t. Nobody knows whether the UK would be covered by the EU’s FTAs. I have communicated with the World Trade Organisation, the European Economic Area, the Commission, the Department of Business, Innovation and Skills, and of course the Foreign Office. None of them know. It is not included in the treaties. So Wilding presenting the loss of Korean and South African free trade as absolute fact is a pessimistic, negative deception.

If you’re going to criticise UKIP and Euroscepticism, get your facts right. If you can’t get your facts right, at least admit your uncertainty.

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