ER Editor: Rodney Atkinson references articles by Phil Radford at Brexit Central. We list them here:
The pointlessness of the EU Customs Union exposed – April 1, 2019
In two decades, EU Customs Union membership has not delivered clear benefits for any major UK sector – March 6, 2019 (cited in the article below)
46 YEARS OF DESTRUCTIVE EU MEMBERSHIP
From the fundamental betrayal of the British constitution by the Heath Government (Ted Heath pictured) in 1972 to the devastating consequences of EU trade, economic and industrial policies on the United Kingdom, the case for leaving the European Union after 46 years is undeniable.
After EEC entry, numerous “treaties” signed under Crown prerogative powers granted by the Queen (which drew ever more areas of political, economic and social life within the growing jurisdiction and polity of the “nation called Europe”), the EU proceeded to destroy 19 national sovereignties through the Euro, and is establishing a European Army and defence industrial complex. The political takeover of democratic nations by the European Superstate is, in 2019, almost complete.
This article will concentrate on the economic and trading losses for the United Kingdom and the devastation of our basic industries after 46 years of membership of the European Union. The Nazis and fascists who helped to plan (e.g. Funk), found (e.g. Globke) and initially manage (e.g. Hallstein) the European Union in the 1950s could not have dreamed that by 2019, so much of Fascist Europe’s plans for the destruction of Britain would have been achieved.
“The French and Italian statesmen seemed interested in the prospect of the encirclement of England on all seas and all countries facing her shores which, they were assured, would lead to British collapse if the community of which the Fuehrer had spoken was achieved.” Gordon A. Craig, Germany 1866-1945, Oxford. 1978, page 725.
THE INITIAL COST OF JOINING
We know for a fact what happened just before we entered the EU on the 1st January 1973, and know for a fact what happened afterwards (just as we know what happened after we voted to leave in June 2016 compared to what Remainers said would happen!):
In the 5 years before entry, average annual growth was 3.7% but 5 years after it was 2.08%
In the 5 years before entry, average inflation was 6.5% but the next 5 years averaged 16.7%
In the 5 years before entry, overseas trade averaged a surplus of 1% but in the next 5 years there was an average deficit of -2.5%
In the 5 years before entry, average unemployment was 2.5% but in the next 5 years unemployment averaged 5%
In 1975, two years after we joined the EU, Prime Minister Harold Wilson (pictured) was warned that Britain’s economy faced “possible wholesale domestic liquidation”, newly released Cabinet papers have revealed. In the autumn of 1976, the Pound collapsed and the Chancellor Denis Healey went begging to the IMF for a $3.9bn loan – granted on condition the Government cut spending by £2.5bn a year!
I recall a detailed comparison of the wealth enjoyed by the average Briton in 1972 compared to the far less average wealth of EEC “citizens” (more washing machines, more televisions, more home telephones, etc). Particularly striking was the difference in home ownership compared to the EEC countries. When we joined the EU (then EEC), we had the highest level of home ownership in Europe. Today 46 years later we are in the bottom 5.
In 1973, when the UK joined, the EEC comprised around 35% of the World economy, so joining the Customs Union then, though a very bad decision, was not as injurious as it is now, when the EU countries account for just 15% of the World economy, a share shrinking daily. Growth in a region also depends much on population, and here the EU is projected to lose some 49m by 2080 – with Germany the biggest loser with minus 14m – about the same number by which the UK will increase its population (13.6m)!
Today some 12% of the UK economy is dependent on trade with the EU, but ALL our economy is subject to EU rules, taxes and regulations. And the massive goods trade deficit of £95bn per annum is an annual drain on the UK’s finances and jobs.
A CONTRAST WITH WORLD WIDE FRIENDS
The website “Guido Fawkes” has produced some recent figures on the comparative growth of the EU and the Commonwealth countries (whom we abandoned in 1972 to become captive to EU trade rules and laws). Since the European Union was created in 1992, the size of the combined Commonwealth economy has ballooned by 258%, whereas the EU’s combined economies have grown by just 119%. Added to this, the average EU growth rate is today just 1.4%, less than half of that of the Commonwealth’s 3.3%.
Freenations own calculations showed recently that while the EU accounts for only about 15% of world GDP, the UK, Ireland, USA, Canada, New Zealand and Australia account for 34%. Only a fool would sacrifice that trade with friendly nations (and compatible language, law and customs) to be constitutionally, politically and economically captive of the highly protectionist, State corporatist EU.
WHAT ABOUT THE SUPPOSED BENEFITS OF EU MEMBERSHIP?
The UK has handed over about £600bn in budget contributions to the EU since 1973 and received as our reward a cumulative trade deficit of a similar amount. What a grotesque “deal”!
THE EXPORT RECORD
A series of brilliant analyses by Phil Radford at Brexit Central of decades of UK trade from inside the EU and its single market and customs union debunk all the myths of the “enormous advantages” we supposedly got for sacrificing our country, economy and democracy on the altar of the unelected bureaucratic hierarchy of the EU.
For a country which has always imported raw materials and food, the EU customs union has been an expensive failure for the UK. But it has been an even greater failure if we look at exports to the EU compared to exports to the rest of the world.
Annual average growth in goods and services UK-EU from 1998 to 2017
Services to non-EU countries rose by 5.6%
Services to EU countries by 5.2%
Goods to non-EU countries rose by 3.3%
Goods to the EU countries rose by 0.2%
As Radford says, the growth of goods exports is precisely the area where the EU customs union should be beneficial to the UK. But it has been catastrophic!
The fastest growth is to countries where we are free from the EU’s single market and customs union. AND 73% OF NON-EU TRADE WAS CONDUCTED ON WTO TERMS! The Government is, of course, striking trade deals with more and more of those countries so that in future, the terms of trade will be even better.
THE IMPORT RECORD
On the UK import of EU goods and services, the record of EU membership has been dreadful. Even in 1998 goods trade with the EU was at a modest deficit of -£5.6bn in current prices. (Before we entered there was an an average annual surplus of 1% of GDP.) Today that deficit is – £95bn. We maintain a £36bn trade surplus with the rest of the world.
Radford points out that the two sectors of trade which are the most loss-making for the UK are motor vehicles, and food and agriculture – where the customs union is most protective of EU producers. Bradford rightly concludes:
So, on the basis of the UK’s own 20-year trade data, there is not one, single major sector of trade in which the Customs Union has delivered clear, demonstrable benefit to UK since 1998. …..What’s troubling – for UK consumers, at least – is that the Customs Union appears to be turning the UK into a series of tightly controlled captive markets for EU producers.
And it is precisely this disastrous Customs Union which the Labour Party wants to remain within – suffering massive trade losses, unable to strike non EU trade deals and perpetually controlled by EU external tariffs.
UK CAR INDUSTRY AND THE EU
One of the most fanatically pro-EU industrial groups is the “British” car industry, which today consists of 90% foreign-owned car plants that export 80% of their production (while importing 60% of the parts and exporting 100% of the profits!). UK-EU trade in cars was worth £67.5bn in 2017. It has the highest protection in terms of EU tariffs on non-EU car producers but produces the biggest UK deficit (£28bn).
Between 1998 and 2017, car exports to the EU rose by a mere 0.4% per annum while exports to non-EU countries rose by 7.9%. As Radford summarises:
Zero tariffs; zero market barriers; zero growth
Once again, it is the rest of the world which provides a healthy market for the UK – with high value cars exported principally to China, the USA and the Middle East. The £28bn car trade deficit is the equivalent of 40,000 jobs exported to the EU!
This job loss is accelerating as Jaguar Land Rover has moved production of two models to Austria and Slovakia, and BMW produces the Countryman in the Netherlands. All these decisions were taken before the 2016 referendum.
FOOD AND AGRICULTURE
70% of food and agricultural product imports come from the EU as tariffs prevent us from importing cheaper produce (e.g. 60% on beef!) from elsewhere while the CAP restricts UK farmers by limiting production. As Radford asserts,
By imposing ultra-high tariffs on non-EU food and quotas on imports, the EU forces UK consumers to purchase food from EU producers, who just happen to be the highest-cost food-producers on the planet.
UK BENEFIT FROM SINGLE MARKET AND CUSTOMS UNION?
Michael Burrage (https://www.civitas.org.uk/content/files/itsquiteoktowalkaway.pdf) calculated that the growth rate of UK goods exports that are traded tariff-free into the EU’s Single Market from 1993–2015 was lower than for 35 other countries, many trading under Word Trade Organisation (WTO) terms.
Radford tests the so-called advantage of the EU market and customs union by measuring the performance of the UK compared to the USA from 1998 to 2017.
1998 UK goods exports to the EU: £91.7bn
1998 USA goods exports to the EU: £99.9bn
But since then, US exports to the EU have grown 2.11% per annum and the UK’s exports by only 0.22% per annum. So much for the trade advantages of being in the EU! And the USA has still NO free trade agreement with the EU!
Customs Union confers no commercial advantage in sectors where the UK is highly competitive (aerospace, defence, jet engines, pharmaceuticals), and gives EU companies preferential access where the UK typically isn’t (mass-market cars, food, agriculture, machinery).
The result of this 46 year imprisonment in the EU is that our trade deficit with the EU is (at $1,216 per head) greater than the massive US trade deficit with China (at $1,050 per head).
EU UNFAIR TRADE
One of the big myths about the European Union and its “single market” is that trade between member states is free, frictionless and fair, and free of government manipulations and subsidies which artificially benefit home production against foreign. But none of this is true. There have been big German, French, Spanish and Italian subsidies for aviation, cars, steel and of course agriculture and fishing – from all of which the UK has suffered the consequences. Industrial production has been lost on a vast scale. Behind artificially boosted profits, French and German industry has taken over vast swathes of UK industry including our infrastructure and defence industries. Look at this table of subsidies in the EU:
State industrial Subsidies as % of GDP
The European Union as a whole is also the biggest infringer of World Trade Organisation rules and has by far the most cases laid against it.
But the industrial destruction of the UK by unfair practices is a subject for another article when yet more clear evidence of the horrendous consequences of the UK’s EU membership over the last 46 years can be demonstrated.
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