Soubry – 90% of UK trade will be free if we stay in the Single Market and the Customs Union

Continued membership of the Single Market and the Customs Union will give the UK free trade with the countries that buy nearly 90 per cent of everything we sell, new research by the independent House of Commons Library has found.

Staying in both the Single Market and the Customs Union, allows free trade not just with Europe but over 50 countries the EU already has free trade deals with and, in future, with the huge markets that the EU is currently negotiating trade deals with, like the United States, Japan and Australia.

Open Britain are campaigning for UK membership of the Single Market and are calling on the Government to provide evidence that leaving the Customs Union would deliver comparable gains to staying within it.

The House of Commons Library research, commissioned by Anna Soubry MP, found that, taking together Britain’s trade with the EU, with countries with which the EU has already signed trade deals, and with which the EU is currently negotiating deals, by staying in the Customs Union the UK would have free trade with countries that buy 90% of our exports, and which account for 69% of global wealth.

Commenting for the Open Britain campaign, Anna Soubry MP, said:

“This research demonstrates the huge advantages membership of the Single Market and the Customs Union has delivered and will continue to deliver for Britain. And it underlines the serious potential perils of pulling out of either.

“Those who argue for Britain to leave the Customs Union have not yet provided any evidence that doing so will make Britain better off. The onus is on them to do so.

“The Government should bring before parliament serious cost-benefit analysis of the potential impact of the leaving both the Single Market and the Customs Union. And whether their benefits can really be replicated outside. This must be done before Article 50 negotiations start.”

Notes

The EU’s Customs Union is the mechanism that provides totally free trade between EU countries, bound by a common external tariff that applies to all goods sold into the Union from third countries. Leaving the Customs Union would mean that Britain would cease to be a signatory to the trade deals the EU has signed with more than 50 countries. These deals would all need to be renegotiated. Likewise, the UK would be “at the back of the queue” for trade deals with countries that are currently negotiating with Europe, such as the United States.

It is not necessary to be a member of the European Union to be a member of the Customs Union. Andorra, San Marino and Turkey are all Customs Union members, despite not being in the EU.

As part of the Customs Union, the UK has trade deals already in place with over 50 countries: http://www.cbi.org.uk/business-issues/uk-and-the-european-union/eu-business-facts/10-facts-about-eu-trade-deals-pdf/

The countries with whom the EU has trade agreements; with whom the EU has an agreement pending; and with whom the EU is negotiating an agreement can be seen in this map from the European Commission: http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149622.jpg

More information on all those agreements can be found in this document from the European Commission: http://trade.ec.europa.eu/doclib/docs/2012/november/tradoc_150129.pdf

Over 50 Labour MPs recently wrote to Liam Fox asking him to demonstrate that the benefits of leaving the Customs Union are outweighed by the costs: http://www.open-britain.co.uk/labour_mps_fox_must_show_we_would_be_better_off_by_leaving_the_customs_union 

In terms of UK goods exports in 2015:

  • 47% of UK exports go to the EU.
  • 11% of UK exports go to non-EU countries with whom the EU has trade agreements.
  • 4% of UK exports go to non-EU countries with whom the EU has an agreement pending ratification.
  • 28% of UK exports go to non-EU countries with whom the EU is negotiating an agreement.

Added together, that is 90% of UK goods exports.

Sources: ONS, Trade Data; ONS, Annual UK Trade Exports and Imports by country 1999 to 2015

In terms of overall share of world GDP in 2014:

  • 15% of world GDP is in the EU (the UK itself has over 2% of world GDP, meaning the EU total with the UK is 17% of world GDP).
  • 12% of world GDP is in non-EU countries with whom the EU has trade agreements.
  • 4% of world GDP is in non-EU countries with whom the EU has an agreement pending ratification.
  • 38% of world GDP is in non-EU countries with whom the EU is negotiating an agreement.

Added together, that is 69% of world GDP.

Sources: IMF, World Economic Outlook (April 2016); HMT, Alternatives to Membership (March 2016), p.45; European Commission, Trade.



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