Good at business. Dodgy on politics.


Stephen Odell, presumably in his Volvo days

I have a vague recollection that I had dinner with Stephen Odell, now CEO of Ford Europe, in Brussels a few years ago. If memory serves, he was extremely bright, switched-on and agreeable, but clearly also a big fan of the European project.

He’s reported in the Sunday papers as saying “All countries should have their sovereignty, but don’t discuss leaving a trading partnership where 50% of your exports go”. Let’s leave aside the obvious oxymoron — you can’t have your sovereignty and be a member of the EU. And leave aside also the rather large error in his numbers. Allowing for the Rotterdam effect, only around 40% of UK exports go to the EU, and that’s declining rapidly, as the EU’s share of global GDP declines.

The statement contains lazy thinking, implicit assumptions that are clearly false, and frankly a naïve approach to the EU question. I have no doubt that Mr. Odell (and Ian Robertson of BMW, who made similar comments) are exceedingly good auto executives, or they wouldn’t be in their jobs. But they don’t really seem to understand how the EU works. There’s an implicit assumption that you can’t do business in the EU unless you’re a member. Yet a moment’s reflection shows the plain downright absurdity of that assumption.

Switzerland is not an EU member, yet it does double the exports to the EU that we do, pro rata. China, the USA, Canada, and many other countries, export very successfully to the EU. I’ve said it before and I’ll say it again: if the UK were to leave the EU and have no special trade arrangements, the duty we should pay on British exports to the EU would be only about a third of our net EU budget contributions. But of course we should indeed have a free trade deal. We are the EU’s largest export market, and they need us. And the EU treaties require the EU to negotiate such trade arrangements with a member-state which leaves.

So tell us, Stephen, how exactly will the UK be disadvantaged when we leave the EU? Mr. Robertson, do you think your colleagues in Munich would be minded to ban BMW exports to the UK if it were outside the EU? Somehow I doubt it.

Lord Wolfson of Next takes a much more pragmatic view. Nevertheless, he is still wedded to this “Single Market” idea. He says “what business wants is the Single Market, not a federal Europe”. But he adds “If we exited, the barriers of duties and other restrictive practices would eventually take their toll on UK trade”.

Like many commentators, Lord Wolfson seems to mean “Free Trade” when he says “Single Market”. But they’re not at all the same thing. He’s suggesting that maybe we can have the Single Market without the onerous and costly EU regulation. Yet from the Brussels viewpoint, the regulations are fundamental to the Single Market. They are part of the deal. You can’t be in the Single Market and out of the regulatory structures. But you can (and we should) have market access through a free trade agreement, without the regulatory burden. We should compare ourselves not to Switzerland and Norway (as Europhiles love to do) but with the USA and Canada. Or to countries with an existing free trade agreement with the EU, like Korea and Mexico. These countries do not suffer from the “regulation by fax” which so exercises pro-Europeans. But they do have market access. That is the model we should pursue, and neither the auto industry nor the retailing sector has anything to fear from it.

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4 Responses to Good at business. Dodgy on politics.

  1. If only we could clone you, Roger. A politician who is a realist when it comes to the United Kingdoms future as a normal trading country and not propping up those £120-per-bottle bureaucrats that infest the EU upper echelons.
    We cannot afford this flawed system, the deeply flawed and over-paid managers racking up expenses and huge pensions, and certainly not their myth-based ‘green energy policies’ that are covering Scotland and mid-Wales with part-time windmills at vast expense to the consumers.

  2. DougS says:

    Why would the EU not want to trade with the UK if we left (as soon as possible please) the club.

    They’d lose many more jobs than we would because of the trade imbalance in their favour.

    They’re greedy, undemocratic, authoritarian and power hungry – but they’re not stupid!

  3. rfhmep says:

    In my experience, Doug, they frequently ARE stupid. But you’re still right — they won’t cut off their noses to spite their faces.

  4. Stephen Richards says:

    The % is actually irrelevent it’s the balance that counts and at the moment the UK has a -£50B annual trade deficit with the EU. That’s why the likes of BMW etc are putting out the scare stories. You can see the parallels with the AGW scam. Put out scare stories and hope that the people vote in your direction, Just Classic.

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