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PRESERVING TRADE, PRESERVING JOBS? |
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The UK could soon
swap being in the EU for a neighbourly relationship based on trade and
cooperation.
One question
asked is “How would we maintain trade
with the EU and the rest of the world?” EU supporters raise the threat of our
motor exports being penalised, and even a trade war.
Fortunately, both
the UK and the EU are members of the World
Trade Organization (WTO), a wider trade body that has slashed world trade
barriers during the last 50 years. One of its principles is that once trade is freed
up, it stays free, and it is looking to further grow trade by reducing
barriers.
With the
continental economies in difficulty, the EU supports these WTO goals. The other
27 EU members sell us more than we sell them, so would come off worse in a
trade war. But nobody wants hostilities that would cost jobs and send the
world’s stock markets sliding.
Apart from
freeing up trade in Europe, it has already free trade agreements with countries as varied as South
Africa, South Korea, Israel and Mexico – we
don’t need to be in the EU to trade with it.
In fact, the
EU has committed to ‘the freest possible
trade’ with neighbouring countries - free movement of goods, services and
investment - and peaceful co-operation. So there is every indication that we’d
be able to carry on trading with the Single Market.
So what if
the UK left the EU? There are two other important issues.
Existing
World Trade Agreements
Because the
EU has negotiated several trade deals on our behalf, they would
technically need to be transferred into our name. Our joint involvement with
the WTO could help manage this, and ensure the stability of the world trading
system. The WTO can resolve disputes and insist on compensation where the rules
have been broken.
New Trade
Agreements
As an
independent country, and one of the world’s biggest economies, there is also
nothing to stop us co-operating with the EU (and others) to secure wider trade deals
- if and when our needs coincide. So any free trade deals in the pipeline, such
as possibly with the USA, need not be dropped.
This page compiled: 25 May 2014; links updated: 1 January 2018.