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.