Wilson - Fantasy figures underline weakness of case for leaving the Customs Union

Responding to the claims from Change Britain that thousands of jobs could be created by the UK leaving the Customs Union, Phil Wilson MP, leading supporter of the Open Britain campaign, said: 

“These misleading, fantasy figures underline the weakness of the case for leaving the Customs Union. They take no account of the unavoidable costs that would arise and look at the UK’s supposed share from EU trade deals we will not be part of. 

“Negotiating alone, rather than in a bloc of 500 million consumers, the UK would be unable to negotiate trade deals of comparable depth to the EU.

“The EU helps increase the UK’s global trade links, giving our economy access to over 50 other global markets. We should be looking at ways to protect these benefits, not sacrificing them on the basis of made-up, misleading numbers by anti-EU ideologues.” 

/ends 

Notes to editors

 

Change Britain’s figures are based on European Commission projections on the benefits new EU trade deals could bring. The UK would not be part of these trade deals if we were to leave the Customs Union and would instead have to seek to negotiate bilateral agreements with these nations. Such bilateral agreements would not be as comprehensive as EU agreements, given the far-larger size of the EU’s market, so any new gains would likely be lower than those projected by the Commission.

Change Britain’s calculations include South Korea, which already has an FTA with the EU, and Canada, which has an FTA that is yet to come in to force. When the UK leaves the EU we will have to negotiate to continue to be party to these FTAs, which, if successful, would mean retaining the benefits we have as a result of EU membership, not ‘new’ benefits.

The EU opens up global trade for the UK, which we should be seeking to protect. Research has 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.

Change Britain point to press reports claiming countries want to negotiate trade deals with the UK, but overlooks the fact the EU is already negotiating deals with Japan, the USA and India.

Change Britain factor in a trade deal with India, but the Indian Government has said this would be reliant on an increase in student visas. This is incompatible with Change Britain’s desire to cut migration.

Change Britain’s calculations ignore any costs associated with leaving the EU’s Customs Union, whether the costs of Rules of Origin regulations or the Government’s own figures which show this could lead to a 4.5% drop in GDP.   

The importance of the Customs Union was highlighted by the Japanese Government, who said that “maintenance of the current tariff rates and customs clearance procedures” was their number one request of the UK Government. They also said: “The imposition of customs duties anew could suppress the revenues of businesses, which in turn could affect the sales prices of their products and their international competitiveness ... Changes in customs clearance procedures for exports to the UK and the application of complicated procedures due to the introduction of inconvenient rules of origin could delay and increase the costs of logistics operations, which would have a significant impact on business operations.”

Change Britain wants the UK to leave the Single Market. This would harm the economy and cost jobs. The National Institute for Economic and Social Research’s ‘The Long-Term Impact of Leaving the EU’  contrasted the projected impact on trade, FDI, GDP and wages from differing trade arrangements, covering the WTO, FTA and EEA. They looked at evidence published from HMT, LSE/CEP, OECD and NIESR. They found that in each instance the UK being in the EEA – in the Single Market - was the most favourable outcome. The IFS has said: “Maintaining membership of the Single Market as part of the EEA could be worth potentially 4% on GDP – adding almost two years of trend GDP growth – relative to World Trade Organisation (WTO) membership alone”.