After we Vote Leave, British businesses will trade freely with the EU. Many countries around the world trade with the EU without accepting the supremacy of EU law.
Only 6% of UK firms export to the EU and the EU has been a declining market for UK exporters over the past decade.
The UK is the EU’s largest export partner. It is overwhelmingly in the EU’s - particularly Germany’s - interests to agree a friendly UK-EU free trade deal.
The EU is a shrinking market for the UK. Over the last decade, the EU has become less important to UK exporters, with exports of goods and services to the EU falling from 54% of the total in 2006 to 44% today.
Even these declining EU figures are significant over-estimates, as they include goods that are destined for non-European countries which are first re-routed at European ports (the so-called ‘Rotterdam/Antwerp effect’). Thanks to the EU’s relative economic decline it is reasonable to assume that this downward trend will continue.
Official figures show that over the last ten years the EU’s net investment into the UK has declined. Recently, the EU as a whole has disinvested from the UK. Today the USA is a more important source of investment in the UK than the EU is.
While the table above shows the annual flows of investment to the UK, the table below shows the cumulative stock of investment to the UK. The cumulative investment from the US has increased over the past decade, while investment from the EU-3 (Germany, France, Italy) is flat.
The EU is also becoming less important for British outward investment. The UK is disinvesting from failing Eurozone economies, where the rate of return has fallen by half over the last four years (by contrast, US earnings have remained broadly constant).
This shows the importance of taking back control of the power to strike trade and investment deals with countries that have greater prospects for British businesses.
While non-EU countries are becoming increasingly important to the UK, Britain lacks the power to strike free trade deals with its trading partners outside Europe. Being in the EU means that Brussels has full control of our trade policy. We don’t even have an independent voice in the World Trade Organization - Brussels negotiates everything on our behalf and does a bad job. EU trade representatives have to deal with an unresponsive 1950s bureaucracy and 28 sets of competing special interests. This undermines the EU’s ability to strike trade deals.
With such a broken system, it’s no surprise that the EU still doesn’t have a free trade agreement with major economies like China and India. Smaller countries, like Iceland and Switzerland, which are outside the EU and don’t have to deal with all of its bureaucratic problems, have been able to strike free trade agreements with China. If we Vote Leave and take back control, we will gain the power to strike our own trade deals, creating new business opportunities and creating more jobs.
The ‘Single Market’ is a poor substitute for having control over trade policy. Single Market rules include disastrous regulations such as the Clinical Trials Directive that badly delayed the testing of cancer drugs. ‘Single Market’ rules control how we build schools and hospitals adding billions to costs and favouring huge multinationals over small and medium sized businesses. Even on the Commission’s most optimistic figures of its benefits (which should not be believed), the costs of its regulations are higher.
Despite all the hype, there is no clear evidence that it has improved economic growth or even promoted intra-EU trade. The EU’s own figures show that since 1999, intra-EU trade has even slightly declined. Further, there is very wide variability in the amount of investment into all the different EU member states, which shows that this investment is driven not by the ‘Single Market’ but by other factors.
After 40 years of membership, only around 6% of British companies export to the EU, but all have to comply with the full burden of EU law. Polling shows that about 7 out of 10 businesses think Britain should take back control of trade policy. They reject the facile argument that common EU rules are needed to trade with Europe. They think that the EU is bad for jobs.
‘Single Market’ rules recently led to the high-tech company BASF leaving the EU for America because of damaging regulations. The Minister for Life Sciences recently warned that EU regulation risks putting the EU in a ‘dark age’ regarding the development of high technology.
We will negotiate a new UK-EU deal based on free trade and friendly cooperation. We will carry on trading with Europe but we will also be able to negotiate trade agreements with other countries. This will help our economy grow and create more jobs.
Some claim we will not get a trade deal but there is a European free trade zone from Iceland to the Russian border and we will be part of it. The idea that Britain will be the only country in Europe not to be part of this zone is silly. The IN campaign claims that ‘three million jobs will be lost if we vote leave’. The economist who did the research on which they base this claim describes their claim as ‘pure Goebbels’.
Many countries around the world trade with the EU without being members of it. You obviously do not need to be a member of the EU and accept the supremacy of the European Court in order to trade with Europe.
The UK is the EU’s single largest export market in goods, taking a larger share of EU exports than even the United States. It is in everyone’s interests, particularly Germany’s, to negotiate a friendly UK-EU free trade deal.
A vote to remain is a vote to make EU control of British trade policy permanent and a vote for Britain to have no independent voice in world trade negotiations.
If we Vote Leave and take back control of our trade policy, we can speak for ourselves and sign new deals with countries all over the world, creating new jobs and new investment opportunities.
Tim Tozer, Chairman and Managing Director, Vauxhall Motors: ‘If this country would vote to leave the EU, would that trouble or concern us? There my answer is no because I don’t think that in that event there would not be a trade agreement with what was left of the EU’ (BBC Radio 4, Today Programme, 15 September 2015, link).
Kevin Rose, board member, Bentley: ‘We made our plans, we've announced the investments ... and they were in full knowledge that there was a referendum so we believe in the UK … Regardless [of the outcome], we think that the UK is a good place for investment’ (Reuters, 17 September 2015, link).
Fabrice Bregier, Chief Executive, Airbus: He has said he has ‘no intention’ of pulling manufacturing out of the UK if the country votes to leave the European Union (BBC News, 16 June 2015, link).
Jeff Immelt, Chairman and Chief Executive, GE: ‘It’s important the UK has good relationships around the world, but I don’t really think that its place in the European Union makes that much difference’ (The Daily Telegraph, 3 October 2015, link).
Karl-Thomas Neumann, Chief Executive of Opel: 'We have plants in Luton and Ellesmere port. We will not turn our back on England... life would carry on... We would continue to find ways to invest' (Reuters, 17 September 2015, link).
Trevor Mann, Chief Performance Officer, Nissan: 'If there was a future trade agreement between the UK and EU then it wouldn't make a lot of difference' (Financial Times, 11 January 2016, link).
Takahiro Hachigo, Chief Executive of Honda: 'Honda remains firmly committed to car production in the UK and Europe. Our production activity in the UK plays a key role for our business in terms of providing products to the European market… and beyond' (AutoExpress, 1 October 2015, link).
Akio Toyoda, Chief Executive of Toyota: 'We want to deepen our roots to deliver ever better cars, so when that capsule is opened after 100 years, all can see we’ve built a truly British company.... I think a strong manufacturing workforce and parts supply chain are characteristic of the UK... I understand it was judging on those factors that we choose to put our first European plant in Britain' (FT, 11 January 2016, link).
Paul Polman, CEO of Unilever: 'The effectiveness of my research centre is the quality of the people I have there and the ideas coming out in terms of the innovations that we produce. We don’t make a decision on moving research centres around depending on if you are in the EU or not... I am in every country basically, in any trading zone, in the EU, out of the EU. People need to buy shampoo, people need to eat their Knorr or Cup-a-soup, and they want to buy their Coleman’s and they want to buy their Magnum ice cream. They are not going to say that is function of if I am in the EU or if I am not in the EU' (Guardian, 25 January 2015, link).
International investors have been clear that they want the UK to have looser links with the EU. In a 2013 survey 72% of US investors and 66% of Asian investors said that the UK should have looser relations with the EU.
In 2014, 44% of UK goods and services exports went to the EU (£228.9bn), while the remaining 56% of UK goods and services exports went to the rest of the world (£286.3bn). The UK imported £290.6 billion from the EU in 2014 in goods and services and imported £259.1 billion from other countries around the world.
The UK is the EU’s largest export destination: 16% of EU goods exports go to the UK. This makes Britain a more important export destination to the EU than even the United States. It is overwhelmingly in the EU’s interests to agree a friendly UK-EU trade agreement. Why would our friends in Europe want to have a destructive trade war that would hurt their own companies?
Even leading figures in the campaign to keep Britain in the EU at all cost have had to admit that, if we Vote Leave, we will get an excellent trade deal. Even Tony Blair admitted ‘Of course, Britain could survive outside the EU... We could probably get access to the Single Market as Norway and Switzerland do.’
Most people and businesses want a UK-EU relationship based on free trade and friendly cooperation but not the supremacy of EU law. The overwhelming majority (74%) of Britain’s SMEs think that the British Government, not the EU, should control the UK’s trade policy. Most entrepreneurs also think the EU and ‘Single Market’ are a net cost.
Global investment comes to Britain because of assets like our brilliant universities and science research, not because of EU membership.
The EU-funded Britain Stronger in Europe (BSE) campaign is trying to scare you by saying that three million jobs depend on being in the EU. They don’t - the economist who wrote the original research described this claim as ‘pure Goebbels’ and economic reports have shown that this claim is completely baseless.
The BSE campaign is trying to scare you by saying that, unless we are in the EU, we will not be able to strike trade agreements with growing economies. The EU has failed time and time again to strike trade agreements with the major world economies. By contrast, Switzerland and Iceland - which are both outside the EU - have managed to strike trade deals with China.
The BSE campaign is trying to scare you by saying the EU invests £24 billon a year into the UK. These numbers are dodgy. In recent years the EU has been disinvesting from the UK.
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