Open Europe goes native


         Or is Open Europe batting for the Status Quo?

Open Europe have asked me (quite rightly) to clarify their position: they presented four scenarios, two negative, two positive, for Brexit.  They are quite right to point out that it was the choice of the media, and especially of the Telegraph and the FT, to lead on the down-side.  The media could just as well have headlined their articles “Report shows that Britain could prosper outside the EU”.  I apologise to Open Europe if I misrepresented them in the heat of the moment.

I used to think of Open Europe as a half-way sensible, reliable, euro-critical think tank.  Some of their reports were quite helpful, at least for their data if not always for their conclusions.  So it is disappointing just before a General Election to see them going into over-drive as apologists for Brussels.

First there was their report, a few days ago, claiming that leaving the EU would save only a tiny fraction of the regulatory costs of EU membership, so we’d do better to stay in and renegotiate – a proposition that could have come straight from the spin doctors at Conservative Central Office. They said that EU regulation currently costs £33 billion a year (a serious under-estimate, but let that pass).  But if we left, and (say) adopted the Norway model, as many recommend, we should still be subject to EU rules costing 90% of the current figure.  So stay and fight.

What they have done is to make a great case against the Norway option (which in any case UKIP could never accept, since it involves keeping the EU’s “free movement” rules).  They have not, however, made any case at all against Brexit.  And they’ve sought to give credence to the idea that significant renegotiation is possible.  If you can’t take the word of Jean Claude Juncker and other EU leaders that they will not give way on basic elements of the Treaties, then look at the history.  For over forty years British politicians have been declaring that they would win key concessions in Brussels, but they have failed over and over again, and we are ever deeper in the mire.

Then we had Dominic Grieve saying that any post-Brexit Free Trade Deal with the EU would necessarily imply free movement.  Plain ignorant nonsense, Dominic.  The EU has dozens of free trade deals around the world, and is negotiating dozens more, and only a handful — the EEA deals — involve free movement.

Now Open Europe does it again, headlining the news that “Brexit could lose the UK 2.2% of GDP”.  Even the headline is misleading — it cites the worst-case outcome from four scenarios.  The headlines ignore the best-case scenario, in which Britain gains 1.55% of GDP.  This report (say the media) “represents a significant challenge to Nigel Farage’s demand for Britain to leave the EU”.  OK.  So let’s respond to the challenge.

Of Open Europe’s four scenarios, only one bears any relation to UKIP policy, and that (surprise surprise) is the best-case scenario.  Let’s look at the four approaches:

1        “A hostile exit”: Britain would introduce “strict immigration controls and protectionist trade policies”.  UKIP wants managed immigration, not “strict immigration controls” (I assume Open Europe mean “closing the borders”).  And we are a free-trading party, absolutely opposed to protectionism.  This worst case scenario, that the Tory press has rushed to headline, is wholly unrealistic.  Nor do we anticipate a “hostile exit”.  Our trade with the EU will continue to be covered by WTO rules, and it is inconceivable that we should not negotiate an FTA with the remainder of the EU.

2        The Swiss model: According to Open Europe, this would still be negative (despite Swiss government studies showing that if they joined the EU as full members, like theUK, Switzerland would be much worse off).  But we don’t want the Swiss model, for much the same reasons that we don’t want the Norway model.

3        “Britain would begin to benefit if it signed FTAs with countries such as China”.  Exactly.  And that’s what UKIP would plan to do.  Outside the EU, we should be free to do so.  If little Iceland can negotiate an FTA with China, it beggars belief that the UKwould be unable to do so.

4        “Unilateral free trade” with deregulation.  We’re not sure we’d prioritise unilateralfree trade, but free trade and deregulation are a main part of our agenda, and here we agree with Open Europe that the effects would be positive — though we think that they under-estimate the benefits (including the massive competitive benefit of reforming our energy markets free of EU rules).

In summary, the Open Europe report is partly wrong, partly misleading, and wholly unhelpful.

One final point, particularly relevant in the context of my remark about Iceland.  We are constantly told that EU membership puts us in a much stronger position to negotiate trade deals.  It gives us “clout”.  But those familiar with such negotiations know that exactly the opposite is true.  The EU negotiators are ham-strung by the need to juggle the conflicting interests of 28 member-states, whereas their interlocutors on the other side of the table have to focus on just one country’s interests.  The EU negotiates from a position of invincible structural weakness.

I know this from my own experience in Korea in the early 90s, when I was MD of a Diageo/United Distillers subsidiary.  The EU representative office (I won’t call it an Embassy) back-pedalled on market access for Scotch (and Cognac and other European spirits) so as not to queer its pitch in trying to sell French or German high speed trains for the Seoul/Pusan route.  So much for “clout”.

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22 Responses to Open Europe goes native

  1. they dare not bite the hand that feeds them

  2. Flyinthesky says:

    I’ve always seen OE as, thinly veiled, native. It has tried to keep a foot in both camps. It has floated itself as an independent auditor, it isn’t and never has been. It’s yet another illusion mechanism to make people, and by people I mean the populace of Europe not vested interests and bureaucrats, think they can influence changes in legislation. Democratic influence is an anathema to the eu. Until we can get people to recognise this and what the eu actually is there will be no confrontation.

  3. David says:

    Surely we can impose tariffs back on the eu if they get nasty with us. (Well they already are nasty)
    Tit for tat, no winners.

  4. ian wragg says:

    Open Europe is not and never has been even a mildly Eurosceptic organisation. Just look at its patrons and sponsors. It always peddles the Brussels line albeit finely tuned to give a reasoned impression.
    OE and the likes are the ones who will spread the FUD in any referendum campaign.

  5. Spinwatch says:

    Open Europe are sometimes good on finite detail, but perverse on the overall picture – if you like “Penny Wise, Euro Foolish”.

    They preach pessimism on Brexit without a proper appreciation of the wider world trade dimension, and they will have egg on their face in 2017 when the Swiss conclude a new EU trade and cooperation agreement without uncontrolled free movement of people.

    I suspect that a big factor in trade continuing virtually undisturbed will be mutual membership of the World Trade Organization (WTO), which involves a commitment to liberalisation of trade. Indeed there are EU treaty provisions for the freest possible trade with neighbours, something which would also apply to us. (See ‘Preserving Trade, Preserving Jobs link under Spinwatch name).

    Don’t accept any scaremongering that the EU doesn’t do ‘bilateral arrangements’ – it has been planning further liberalisation on services with at least 20 other countries (TISA agreement) and wants the biggest ever bilateral trade agreement yet, with the USA.

  6. Leon Wolfeson says:

    In the coming referendum (If the Conservatives win and that seems very unlikely to me), then your position seems to be to obtain an immediate referendum, then use the results to pass a law or something ion parliament and just walk out. After that, you would negotiate with Europe for a free trade agreement like, say, Libya has at the moment.
    Is this right?
    You dismiss the Norwegian and Swiss options.
    I would really like to know the answer to this question – as would many other voters.

    • Not sure I follow your question. We want an in/out referendum. If we win that, we leave the EU, become an independent country, and negotiate an FTA — like many other third countries have with the EU. But remember the three biggest exporters to the EU — China, USA, Russia — seem to trade very well in Europe with no special trade deal at all. You don’t have to submit to political union in order to trade.

      • Mika says:

        You are an extremely good political thinker as your remarks on AGW and climate change show week after week. And I am impressed by the cultural asides too!
        We cannot just pass a law and leave because we are hemmed in by the Lisbon Treaty which is now international law. We have to work within that. Hence the remarks about Articles 48 and 50.
        We also need to loose the economic FTA arguments too – I say loose not lose! – We can easily do this by joining EFTA and the EEA and then negotiating. Most of the trade is anyway also under international agreements nowadays, as you say on this post.
        If we cannot present a decent argument we shall fall into the same trap as Alex Salmond did with Scotland. He couldn’t do detail. He couldn’t say how independence would work in fact. We must be able to have a cast iron argument. And we have – the Norway Model as a starter.
        EUReferendum blog is, I know, very hostile to Mr Farage personally, but its research is by far the best I have encountered.

  7. Richard111 says:

    Well Roger, how long before your twitter account is suspended?

  8. Roger you are right Open Europe have gone native. I attended one of their events a few weeks ago in London when in conjunction with Ladbrooks and YouGov they tried to tell us that the opinion poll they had conducted showed only 17% in favour of exiting the EU. Now no reasonable thinker would think that. The speeches came at us with determined “authority”. My conclusion is that Open Europe has no membership constituency and as we see from their email alerts and blog they constantly self publicise their media contributions. Who are they.

  9. Roger. Open Europe appears to be looked on as a body with authority and influence. I attended one of their events in London a few weeks ago which was held in conjunction with Ladbrooks and YouGov. They tried to tell us that only 17% were in favour of exciting the EU. No reasonable thinker can think that. Their email alerts and blog are promoting their self publicising media coverage and we should question who dreams up their comments. Yes they have gone native rather to protect their existence as much as anything else.

  10. Sean O'Hare says:

    Hi Roger, Let us assume we get a referendum and that the vote is for out. I understand UKIP would then immediately invoke Article 50 TEU giving around 2 years, extendable by mutual agreement, in which to negotiate a FTA with the EU. If, at the end of those negotiations, we were unable to agree due to a sticking point about free-movement of workers, we would then certainly be in a less advantageous position trade-wise than we are now, not least because we would no longer be able to benefit from existing FTAs between the EU and 3rd countries.

    Dr Richard North’s Flexcit work proposes the Norway Option as an interim solution on the basis that adopting this off-the-shelf EFTA/EEA solution would minimise the amount of negotiation necessary. I believe he envisages that in a timeframe of somewhat less than two years, we could be in a position of retaining full access to the single market, with all relevant EU regulation still in place, but free of all the political nonsense that goes with EU membership. Most importantly we could start negotiating FTA’s with the rest of the world much sooner than if we spend 2+ years in trying to negotiate a bespoke agreement with the EU that proves fruitless. Admittedly we would have to retain some elements of free-movement during the EFTA/EEA interim period, but there is apparently an ’emergency break’ mechanism that is not available to EU member states. This would allow us to call a halt in a situation where we were becoming overwhelmed with EEA migrants.

    I’m not sure how long Dr North envisages this interim EFTA/EEA period would last, but take it that it would be intended to last long enough for us to reach agreement with important non-EU trading partners, after which we could safely leave the EEA.

    It strikes me that UKIP are not well placed to counter this FUD from OE or from the likes of British Influence and other EUPhile groups determined to keep us in. The only way that we can possibly win a referendum is by being able to destroy their scare tactics utterly and North’s work is the only Brexit plan I have come across that achieves that.

    • Leon Wolfeson says:

      Roger – you must reply to this. If there is no exit strategy, Ukip is dead in the water – and so are all of us who want out (I love the Norway Model, especially Googling it! Very pretty – and clothed too.)

    • This is very easy to reply to. The worst case you envisage is if we leave the EU and have no deal in place. But we would be Better Off Out simply as an arm’s length independent nation than we are as EU members. Consider: the three largest exporters to the EU — Russia, USA, China — have no special trade deal. And the duty we would pay on British exports to the EU would be merely a fraction of our net membership contribution — never mind the cost of regulation, and the damage that EU energy policies are doing. But of course we will have a free trade deal — do you imagine that continental companies like BMW would be prepared to accept tariffs on their exports to the UK? No way. There will be a massive economic imperative to agree an FTA, and that imperative will be bigger on the continent than in the UK. This demand that “we must have an exit strategy” is a red herring. The exit startegy is to get out. Of course I can’t tell you in advance exactly what deal we’ll be able to do, but I am confident that an FTA will be achieved — and without free movement. UKIP cannot accept any deal, even an interim deal, that doesn’t give us control of our borders — as any independent country must have.

      • Spinwatch says:

        I’m sure you’re right about getting a FTA as the UK and the EU(27) would all seek to keep trade liberalised as active WTO members. The Commission is amazingly keen on freeing up trade. But I can’t agree that we don’t need an exit strategy – there are things like aviation agreements to sort out, and UKIP can’t just assume it’ll be all right on the night as in showbiz, or there will be chaos. UKIP wouldn’t go into a general election or by-election without careful preparation like fund-raising, would it?

        The UKIP Deputy Chairman said that she had a plan and she sounds a very sensible lady. I would be very interested to see how this covers the various practicalities and contingencies. Sean is right that the evolving Flexcit plan is a good model – maybe UKIP can improve on it?

      • Sean O'Hare says:

        This demand that “we must have an exit strategy” is a red herring.

        If it makes the difference between winning and losing a referendum I can’t see that it can be classed as a red herring. Have you not noticed that the Pro-EU side has already geared up to instil fear that Brexit will devastate the economy and that they are winning the argument. The latest EU in/out polls suggest that we have already lost it. At least in 1975 we started off with a 70% lead and still managed to lose it.

    • P.S. And of course we will grandfather the existing EU FTAs — that will be in everyone’s interests.

      • Mika says:

        I am always worried when politicians use jargon.
        With the Norway Model, we do not have the economic argument at all. It is simply not there. This will cut the ground from under Europhile feet. Everyone knows that, anyway, world trade agreements are the thing nowadays, and the EU represents our country as they are agreed. Norway makes her own decisions as a free country within the meetings – and chairs one very important one too. We could do that.
        As to the rest – Article 50 a.s.a.p. – or Article 48. This puts a two year time limit on.
        our work after that is to get the best deal possible. The Norway Model is a useful start to negotiations, that is all. Without it, we haven’t got an opening.
        I am very surprised that this answer is not trotted out by every politician as it is by far the most convincing. And Ukip seems to be the only party promising to leave the ghastly mess of the EUSSR.

    • Spinwatch says:

      I think a referendum is unlikely under either Cameron or Miliband. However if there was an in-out vote, the EEA option is worth considering as a fallback position to hold up to business who might otherwise vote to stay in.

      But note that its proponents only see it as an interim measure. It is not free of ‘political’ measures, membership means obeying outstanding EU rules on environment and social policy (e.g.). In the EEA, but outside the EU, EU ‘citienship’ rules would still apply. The European Court of Justice would not police them, but they would still be enforceable under international law.

  11. Pingback: EU referendum: losing it before we even start - Screu.EU | Have Your Say

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