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UK in the EU? A Rhetorical Question

Luca Carmosino, LLB student, King’s College London

In 2012, Cohen-Bendit MEP stated that the UK will have to decide whether it stays in the EU or whether it becomes the 51st United States’ State.[1] This quote summarises most of the argument as it illustrates the fact that full independence is, potentially, no longer a solution for the UK. However, I will not restrict my analysis to a citation!

In 1975, the United Kingdom (UK) held a referendum on the (then) European Economic Community (EEC) membership: 67.2% voted in favour.[2] The wind -since then- has apparently changed with the UK constantly ‘threatening’ the European Union (EU) to propose an in-out referendum.[3] This post makes a case for the UK staying in the EU. The first argument will relate to domestic politics. Indeed, the main reason why the UK domestic political parties focus so much on ‘Brexit’ is because it attracts votes by blaming the EU for the politically sensitive issues, namely, immigration, unemployment and many more. Secondly, following the political analysis, an economic perspective is essential. Indeed, the UK largely benefits from the EU as a commercial partner. The third and final part of this post discusses and portrays the globalised context in which we live and argues that the UK is bound by the EU and that political and economic integration is essential in light of the globalisation effect.

Domestic Politics

This post will illustrate what ‘catching votes’ means.  Most UKIP members and MEPs are ex-Tories.[4] This surely pushes the Conservatives in a difficult situation: they lose members and by losing members they lose votes. By such means, UKIP threatens any possibility of election of the Tories on the long run.[5] It is rather hard to imagine a landslide victory by UKIP because its votes are sparse in the UK so the First Past the Post electoral system puts an end to its ascendance.[6] However, they may facilitate a labour victory by taking votes from Conservatives. For the latter, this would be a disaster reducing to dust their prospects of ever governing this country again. Thus, the Conservatives and Mr. Cameron specifically have to show anti-European blood to avoid bleeding out.

Another issue is immigration. “They should pay into the pot before they take out of it.” This is one of the slogans of the eurosceptics.[7] It has been recently demonstrated by an independent study made by University College London, Centre for Research and Analysis of Migration (CReAM) that EU migrants pay more taxes than they actually take in benefits.[8] Between 1995 and 2011, EU migrants contributed for £4.4 billion more than they took in benefits. It is very interesting to compare this with other figures. Non-EU migrants pay £118 billion less than they take and UK-born workers pay £591 billion less than they take.[9] By such means, the EU migrants actually do not come to the UK to benefit from the system, as they are the only ones who actually contribute more than they take from the public purse. Therefore, the fact that EU citizens just come to take money is not true. It is rather a populist argument.

 

Economy and other alternatives

The EU protects competitiveness of its ‘domestic’ companies. Indeed, it is one of the major economic advantages of the EU. This is done either what some commentators have suggested as being the Brussels Effect. By enacting regulations, the EU exports its regulatory framework to other countries thus giving companies in the EU an advantage. This is because they do not need to catch up as they are already EU regulation compliant.[10] This is mainly because the EU is the largest single market in the world.[11] The Brussels effect is observed in the US in areas such as privacy, consumers’ protection, environmental and goods quality standards setting. John Cridland, President of the Confederation of British Industry, argued that an exit from the EU would have significant effects on jobs, growth and international competitiveness.[12] This actually shows how the UK is dependent on the EU for its own economic stability.

On a more economic scale, 48% of the UK’s exported manufactured goods and services go to other EU Member States[13] taking advantage of the customs union. However, the balance is actually negative as the UK imports more from the EU that it exports.[14] The British Pound is stronger than the Euro making it more onerous for Eurozone countries to buy in the UK. Therefore, a refusal to integrate actually brings negative consequences. As much as the UK is the least big EU Member State dependent on intra-EU trade, the latter still represents 53.5% of the UK’s trade.[15] Losing the EU would be losing a big economic partner for the UK.

Other economic relations may exist between the EU and the UK and we shall explore these now.[16] Firstly, the Norwegian/EEA model: they can only export to the EU without paying custom duties on products produced in Norway, they have little influence on EU legislative process and Regulations are binding on them[17] even if they do not get to vote them. They have a compulsory contribution to the EU budget for the areas of participation as a percentage of the GDP and a voluntary contribution if they so wish. By such means, it appears rather clearly that this option is controversial. Secondly, in the Swiss model there is a voluntary contribution, changes to legislation are made bilaterally. The rule of origin that applies to Norway also applies to Switzerland. This may be a solution but this system only came to existence over a long period of time and after several negotiations. Furthermore, the recent expulsion of Swiss students from the Erasmus program by the EU following the Swiss referendum on immigration actually shows that the EU is quite powerful when coming to negotiations.[18] The Turkish model does not fit the UK as it only allows free trade on goods when the UK actually massively exports services (39.7% of UK service exports are to the EU[19]). By such means, none of the models illustrated here would serve the British purpose: they seem to be way better in the EU than outside.

 

UK Outside the EU

The UK, similarly to other states maintain several political/economic relations with other States of the international scene. It is evident that, even if the UK decided to completely exit of the EU, it would still be a member of other organisations, for example, the United Nations (UN), the World Trade Organisation (WTO) the Security Council, the Council of Europe etc. Being a contracting party to these organisations already deprives the UK of some of its sovereignty: case law of the European Court of Human Rights is binding on the UK.[20]

At the WTO, EU Member States actually understand that they do not count enough alone. Indeed, the EU speaks for the 28 Member States even though each has its own seat.[21] On an economic footing, the EU has a strong international influence and power. On top of that, as Bradford illustrates it, the EU has a very strong extra-territorial power to affect businesses through what is defined as the ‘Brussels Effect’. These effects range from competition laws to privacy and also environmental protection or food health. They also affect the chemicals.[22] Furthermore, at the WTO where there is no right to veto as in the Security Council, the EU would have stronger power than the UK.[23] Therefore, the EU would still be able, through the Brussels Effect, to affect the UK’s decisions at a global economic level.

 

Conclusion

The UK’s potential intention to exit the EU seems a rather wobbly intention. And the approaching general elections may clarify such intention. Indeed, as it was illustrated, a reason for the relevant debate concerns internal UK politics dynamics. Furthermore, it was demonstrated that the UK’s membership to the EU is beneficial in economic terms and exit from the EU will not stop the EU having strong effects in a variety of fields on which the UK will have to adapt.

 

[1] D. Cohen Bendit and G. Verhofstadt, ‘FOR EUROPE’ (CreateSpace Independent Publishing Platform, 2012). See report on the launch LSE at URL <http://thepotterblogger.blogspot.co.uk/2012/10/great-britains-future-must-lie-within.html>

[2] See the following link for a clearer description of the results by administrative county <http://en.wikipedia.org/wiki/United_Kingdom_European_Communities_membership_referendum,_1975#National_.26_regional_results>

[3] N. Watt, ‘EU referendum: In-out choice by end of 2017, Cameron promises,’ The Guardian, 23 January 2013

[4] For example, see recent election of the first UKIP MP: ‘Profile: Douglas Carswell MP’ at URL= <http://www.bbc.co.uk/news/uk-politics-28967101>

[5] B. Riley-Smith, “UKIP will threaten Tory chances of winning in 100 key seats next elections, researchers predict,” The Telegraph, 3 Oct. 2014

[6] Indeed, as the recent EU elections show, when the polling system is more proportional, then they win more seats (26.6% of the votes made them win 24 seats)

[7] UKIP’s proposals at < http://www.ukip.org/issues>

[8] C. Dustmann and T. Frattini, ‘The Fiscal Effects of the Immigration to the UK’, [2014] The Economic Journal Vol. 124 Issue 580 F593-F643

[9] ibid at at F618, Table 6

[10] A. Bradford, ‘The Brussels Effect’, [2012] Northwestern University Law Review Vol. 107(1) 37-8

[11] ibid at 5

[12] T. Helm, ‘EU exit will harm UK, says leading British group,’ The Guardian, 28 June 2014

[13] S. Booth and C. Howarth, ‘TRADING PLACES: Is EU membership still the best option for UK trade?,’ Open Europe, June 2012 at 8 <http://archive.openeurope.org.uk/Content/Documents/2012EUTrade_new.pdf>

[14] ibid

[15] ibid at 9

[16] ibid at 5

[17] An EEA committee decides which Regulations are binding on the EEA Member States and then Norway has to implement them.

[18] A. Bradford, ‘The Brussels Effect’, [2012] Northwestern University Law Review Vol. 107(1) at 5

[19] S. Booth and C. Howarth, ‘TRADING PLACES: Is EU membership still the best option for UK trade?,’ Open Europe, June 2012 at 8 <http://archive.openeurope.org.uk/Content/Documents/2012EUTrade_new.pdf>

[20] Human Rights Act 1998, s3

[21] ‘The European Union and the WTO’ at <http://www.wto.org/english/thewto_e/countries_e/european_communities_e.htm>

[22] See fn 10 at 19-35

[23] ‘Whose WTO is it anyway?’ at <http://www.wto.org/english/thewto_e/whatis_e/tif_e/org1_e.htm>