Europhiles love to tell us that 50% of the UK’s trade is done with Europe, and that this is a good reason for EU membership.
Of course they’re wrong on both counts. If you take account of re-exports and the Rotterdam effect, our exports to the EU are a bit over 40% of our total exports (so less than 10% of GDP). Let’s be generous and say 45% And this trade is not a good reason for EU membership, since there is no reason why quitting the EU should adversely affect our trade.
But they’re also wrong in a much more fundamental sense. The EU is (roughly) 20% of global trade and global GDP. Instead of saying “We do 50% (or 45%) of our trade with the EU, so that’s good”, we should be asking “Why are we doing only just over half our trade out in the other 80%?”. It’s not that we’re doing brilliantly in Europe. It’s that we’ve let ourselves down in the bit of the world where the growth is. As John Cridland of the CBI said this morning: “We’ve concentrated too much on Europe — we need to get out and build export markets in the rest of the world”.
The growth, today and for as far as we can see into the future, is with the BRICS — China, India, Brazil and so on. One of these, India, is in the Commonwealth, as are Singapore and Malaysia (key players in the dynamic ASEAN group in South East Asia). It is scandalous that in recent decades we have ignored the Commonwealth — to our own detriment.
How have we made this mistake? Locked inside an inward-looking, protectionist, over-regulated European Union, we have allied ourselves primarily and preferentially with the world’s slowest growth area, and turned our back on the dynamic markets elsewhere.
It gets worse. While the EU is currently only around 20% of global GDP, it’s actually projected to decline steadily until that figure is halved, to 10%, by 2050. The EU is facing a demographic time-bomb with drastic declines in population over time, which itself undermines GDP growth. We’re in a bad situation in the EU, and it’s getting steadily worse.
Nick Clegg warns us that we shall be “isolated and marginalised” if we leave the EU. He’s looking at it backwards: we’re isolated and marginalised in the EU. It’s time to get out of this doomed club and rejoin the real world, where the growth potential is. Or as William Hague put it, “The EU is a 1970s solution to a 1950s problem”.
Let’s give the last word to economist Roger Bootle: “In global terms, the EU is most assuredly in the slow lane. If we weren’t in it already, surely this is a club we shouldn’t want to join”. Amen to that.