And if these should be subject to tariffs. Forgive my stubbornness over this, but we remain one United Kingdom and Parliament should decide how things happen in our country. They even want to decide how we should spend our own taxes in relation to state aid. All this idiocy isn’t just about getting the best economic deal for the EU, it is about making an example of what happens to a member state that refuses to play any longer, one that wants to determine its own destiny.
My contention is that the future of the EU is inevitably tied to its economic success and things are not looking good on that front. It has become increasingly protectionist, an economically faltering customs bloc.
The EU’s share of world GDP has already declined to just 16% from 30% in 1980 (normalised for current membership), and the trend is downward. The EU is not a democratic institution.
It believes in centralisations rather than freedom. Its parliament is banned from creating legislation while the unelected executive imposes decisions, regulations and directives.
Today the UK is at the forefront of the internet revolution and an entirely new pattern of economic power which has evolved since we joined the EU.
Now we are outside the EU we can truly embrace global trade rather than rely on an outdated failing model of trade that inherently favours countries such as Germany. Our trade deficit in goods is an eye watering £107.9 bn (ONS May 2020).
This is unsurprising really because the current agreement very much favours goods markets, rather than services markets. Guess which has been the real growth market for the UK in the last two decades? Yep, services.
Thankfully we have positioned ourselves to take advantage of where most of the growth for the next two decades is likely to occur, anywhere but Europe, and where much of the wealth is going to be generated to finance the capital projects the world needs, including those in the debt ridden EU.
During these economically challenging times it leaves key members of the EU in a weak position – they do not have the ability to strike new, timely trade agreements to bolster their vital exporting businesses, which are key drivers for their economies. Take Italy…
In Italy there is growing disapproval of the EU, in a recent survey 42% of respondents said they would leave the EU, up from 26% in 2018 (BBC). This disapproval will be further fuelled by a rising debt-to-GDP ratio which will rise to over 150%.
There is no doubt their economy will be unable to return to growth if they do not have the flexibility to make substantial changes to their economy combined with the freedom to explore new markets.
Italy currently has a UK Trade surplus with the UK of £9.6bn (July 2020). Therefore, it is in Italy’s interests for a trade agreement to be reached. If the EU continues to block a future trade deal with the UK it could fuel a catalyst for member states to start exploring bilateral agreements with the UK.
Many challenges face Italy and other member states: the migrant crisis, rising debt and faltering economies and with the EU turning its back on Italy during the latest crisis (only 4% of Italians cited the EU as a most useful ally during the darkest days of the Covid crisis according to the Guardian).
Could these lead to Italy exploring the option of economic freedom outside the EU and follow the UK’s lead?
No doubt the Commission would look to block such moves, although it has no democratic mandate to do so.
This would shine a light on the Commission’s legacy of failures to strike trade deals for its members. For economically vulnerable countries that are dependent on trade for their recovery it will strengthen the growing Euroscepticism amongst voters.
As Euroscepticism builds across Europe, nation-states such as Italy should not fear the prospect of opening to the global economy.
Just as the UK has done it should trust its comparative advantages and unleash them on the global markets rather than relying on a stagnant economic bloc, which is suffocating its very own economies, as well as holding back developing nations.
Countries such as Italy should take confidence and push at least for bi-lateral agreements with the UK if the EU does not negotiate a sensible deal with the UK; it would be wise for the EU to do a deal, but the Commission seldom acts to protect its more vulnerable members.