Daniel Hannan is an MEP for South-East England, and a journalist, author and broadcaster. His most recent book is How we invented Freedom and why it matters.
Britain is the fifth-largest economy in the world. We play a leading role in the G8 and the G20, NATO and the Commonwealth. We are one of five permanent seat-holders on the UN Security Council. We are a nuclear power, with the fourth-largest defence budget on the planet. Our language is the most widely learned in the history of humanity, we host the world’s greatest city and we top every soft power league table. Yet pro-EU campaigners want us to believe that we need to conduct our foreign policy and our trade policy through Brussels.
Who has the parochial mindset here – those who want a global role of the United Kingdom, or those who think that our role must be mediated by Federica Mogherini, the EU’s Foreign Minister? I see no Little Englanders in this debate; I see Little Europeans and Big Worlders.
When we joined the EEC on 1 January 1973, it seemed that Europe was the future. The post-war economic miracle had seen faster growth rates in our immediate neighbours than in the Commonwealth. But things began to switch around almost from the moment we joined. The oil shock of 1974 brought Europe’s growth to a juddering halt, just as the Commonwealth was beginning a surge that is still underway today. In 1973, the nine members of the then EEC accounted for 38 per cent of world GDP. Today, the 28 members account for just 26 per cent, and that figure is diminishing virtually by the week. The economy of the Commonwealth overtook that of the Eurozone in 2013, and is set to overtake that of the EU as a whole by 2018.
Geographical proximity has never mattered less. Freight costs have fallen, and the Internet has made it as easy for a firm in my constituency to do business with Dunedin as with Dunkirk. Easier, in fact. New Zealand uses common law and is English-speaking. Its companies have the same accounting systems as ours, and operate according to the same unwritten codes of business etiquette. Should there be a dispute, it will be arbitrated in a way familiar to both parties. None of these things is true of France, despite 40 years of single market directives.
Yet Britain cannot sign a bilateral free trade agreement with New Zealand. Nor with any other non-EU state. That power was ceded to Brussels on 1 January 1973, along with our right to speak and vote in what is now the World Trade Organisation. The European Commission speaks for us on the WTO – currently in the person of a Swedish former sociology professor – and tends to pursue a far more protectionist trade policy than Britain would adopt on its own.
Last year, free trade agreements entered into effect between China and two EFTA states: Iceland and Switzerland. But Britain can’t sign a similar deal, because Brussels has to give due weight to the protectionist interests of Italian textile corporations and French film-makers and so on. It’s worth stressing that Norway and Switzerland, like every state in Europe except Russia and Belarus, participate fully in the EU market. It’s true that they have no formal say in setting the regulatory standards in the EU, yet they both manage to sell far more into that market, in proportionate terms, than Britain does: Norway two-and-a-half times as much, per capita; Switzerland four-and-a-half times as much.
According to the IMF, every region of the world except one saw meaningful growth in 2014: North Africa, the Middle East, East Asia, Central America. Europe, alone, is sclerotic. This change in balance is reflected in our trade figures. According to the ONS, the EU took 65 per cent of our exports in 2006, but only 45 per cent in 2014. That kind of drop counts, in my book, as a collapse.
Ah, say pro-EU supporters, but even if the share is falling, isn’t it worth keeping our place at the table when the EU’s regulations are agreed? There are three answers.
First, how low does the percentage of our trade with the EU have to be before this argument ceases to be true? We have no say over Japanese regulations, yet must meet them when we sell there. Should we merge with Japan? If, 20 years from now, the EU accounts for less than a fifth of our overseas trade, would it still make sense to contract out our trade policy in return for a say over that dwindling market?
Second, having a say is not the same as having a veto. It’s true that we get a nine per cent say, in practice, in the setting of EU rules; but we must then apply those rules even when the vote goes against us. Switzerland had no vote when the EU decided to ban short selling or over-regulate equity funds through the AIFMD; but it doesn’t much mind, since it hasn’t had to burden its financial services with these idiotic rules.
Third, the real top tables are, these days, not European, but global. EU rules on, say, what assets banks must hold, or food safety, or car components, are usually the regional implementation of worldwide standards. When those worldwide standards are negotiated, Norway and Switzerland sit independently around the table but the United Kingdom (you guessed it) is represented by the European Commission.
As for trade, so for foreign policy more widely. I was struck, on a recent visit to Lima, to find that the EU’s embassy to Peru employed more than four times as many people as the British embassy. As the EU has acquired effective control over trade and aid policy, diplomatic representation has followed.
What’s the alternative? Again, there’s no need to tap the barometer when you can look out of the window. Norway’s diplomats have played a critical role in Sudan, Sri Lanka, South East Asia and – albeit less successfully – the Oslo Accords between Israel and Palestine. Norway, with five million inhabitants, manages to exert a largely benign pull on the affairs of mankind as an independent state.
Could Britain not do the same? A nation of 64 million, a merchant and maritime people, linked by language and law, by habit and history, to every continent and archipelago? A country that sells tea to China and vodka to Poland, that manufactures kayaks for the Inuit? Are we not as capable as the inhabitants of Norway or Iceland or San Marino or Guernsey of living under our own laws? Are we truly so reduced as a people?