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EU monsters project fear

The pro-EU campaign continue to rattle through their scary arguments like they’re going out of fashion – notably, doing so doesn’t appear to be producing any movement in the polls, which may explain why they’re not taking a more steady pace.

The latest comes from none other than the Prime Minister himself, who has pointed to the cost of EU tariffs:

‘Before we joined, we faced extremely high tariffs: 14 per cent on cars, 17 per cent on bicycles, 32 per cent on salt, 37 per cent on china. Even, oddly, 20 per cent on gloves – but only 14 per cent on socks.’

Aside from the peculiar logic that costly socks might justify giving an unelected EU commissioner control of all British trade policy, the argument has several fundamental flaws.

First, it in fact highlights one of the most important problems with the EU. It is not a free-trade area, it is a customs union, deploying protectionist barriers against trade in an effort to hide itself away from the competition of global markets. As a strategy, it hasn’t worked – the EU’s share of global GDP has fallen precipitously and is set to continue doing so. Its protectionism demonstrates a troubling ‘little European’ mindset – Remain means locking ourselves into a failing, ailing economic zone, while Leave means trading with the rest of the world.

Second, Cameron’s warning suggests that a Leave vote would mean the EU retaliating with trade barriers. That’s highly unlikely – with elections in France and Germany in 2017, are Merkel and Hollande really going to choose to put their own car workers and vintners out of work simply to spite Britain? To do so would be to harm their own economies and snub their own voters in the most public way at the worst possible time electorally. The pro-EU campaigners who issue these dire warnings also claim that EU member states are our friends and allies, working together for economic security – yet they simultaneously claim they would harm both us and themselves if they don’t get their way. Both can’t be true.

Third, these tariffs are already in place against imports from the majority of the world which is outside the EU. They are applied to cars, to food, to white goods, to industrial parts and so on – and they therefore drive up costs for British consumers and companies right now. Indeed, Professor Patrick Minford’s research for the IEA estimates that upon leaving the EU, import prices would fall by 10 per cent. As the vast majority of the world’s economic growth continues to take place outside, not inside, the EU, that factor will only grow with time.

In short, these tariff threats say much more about the real costs of EU membership than they do about the hypothetical costs of Brexit – particularly as it would be against the EU’s own interests to levy them when we leave.

44 comments for: Project Fear Scare Story of the Week: Cameron’s sock price shock

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