Myth and Paradox of the Single Market

Attached is a link to an excellent document put together by Michael Burrage of Civitas. It is an expose of the single market and the limited value, to be kind that membership offers. 

Myth and Paradox of 

the Single Market

How the trade benefits of EU membership 

have been mis-sold

Michael Burrage

Link to: Single Market Exposé

Part One: The Myth of the Single Market’s Trade Benefits

1. A doubling of trade? A minister’s claim to parliament 8

2. Reviewing the evidence 15

3. What business told, and didn’t tell, the Foreign Office 34

Part Two: The Paradox of Who Benefits from the Single Market

4. What would have happened

in the absence of the Single Market? 64

5. Is there a single market in services? 89

6. Does ‘helping to make the rules’

in Brussels help UK exports? 103

Part Three: Conclusions

7. Image without substance 114

8. The case for an EU research agency in the UK 125

Appendices

A: BIS reply to the author’s FOI request 134

B: A 2007 report by EC staff

on the impact of the Internal Market 138

The remainers paint the leavers as liars, thieves and vagabonds.  Consider just a few points below and then ponder over the insistence that we must be part of the Single Market.

From the beginning (a fairy tale this is not). Early 70s until 2015 there are just 37 FTA agreements that the EU have negotiated with small countries, in some cases collections of countries. This brings the total to 55 as of 2017. The total GDP of these countries is just $7.7trn.

In 2011 A report was produced by the Department for Business, Innovation and skills (BIS). This report was seized upon, misinterpreted forming astonishing results which have proved to be untrue. The Minister of state took the now fabricated version of this report and informed Parliament. He claimed that: ‘

• EU countries trade twice as much with each other as they would do in the absence of the Single Market programme’.

Under the freedom of information act the report was eventually published. Upon examination, it was shown that this claim was a lie. 

• Sir Edward Jonathan Davey MP FRSA is a British Liberal Democrat politician. He has been the Member of Parliament for Kingston and Surbiton since the 2017 general election, having previously been MP for the constituency from 1997 to 2015.

There were no such findings, there was no such research to prove this theory out. In fact the report was based on a report produced in 2007 by three French Academics. This report was taken compiled together with an EU report which was an attempt to find failings with the single market, to prove a case for more integration and central control.

With the upcoming release of the document the Minister perhaps sensing a discomfort added further reports, produced after his claims. In a vain hope to recover his now tattered image these reports were: 

1. An internal report the department had published, but this showed no reliable evidence on the benefits of the Single Market.
2. A Review of the Balance of Competence between the UK and the EU, which was conducted by the Foreign Office. Inclusive of claims by the bastion of impartiality the CBI, TheCityUK and various trade federations and businesses. They each claimed that UK exporters have benefited by ceding responsibility for trade negotiations to the EC.

No report cited any evidence which supported the Minister's claim, clearly he misled the house.

To come to the 55 trade agreements now in place with various small countries and collections of countries. In total a GDP of$7.7trn.  Michael Burrage of Civitas compares here with those negotiated by Chile, Korea, Singapore and Switzerland, four independent countries which have none of the ‘heft’ or ‘clout’ or ‘negotiating leverage’ which the CBI and many businesses consider essential in trade negotiations. 

The conclusions are:

• By contrast the aggregate GDP of all the countries with which Chile had agreements in force is $58.3tn, Korea’s totalled $40.8tn, Singapore’s $38.7tn and Switzerland’s $39.8tn. However, the agreements of these four countries include their agreements with the EU, which has a GDP of $16.7tn.

• About 90 per cent of the agreements of these four smaller, independent countries include services, whereas only 68 per cent of the EC’s trade agreements do so.

• The EC has therefore opened services markets of just $4.8tn to UK exporters, whereas the Swiss have opened markets of $35tn, the Singaporeans of $37.2tn, the Koreans of $40tn and Chileans of $55.4tn. However, we do not know if the EC agreements secured better terms than these independent countries, since the scope of these agreements has never been compared in detail.

• Analysis of the growth of UK exports of goods before and after EC agreements have come into force, for at least five years, shows that in most cases (10 out of 15) the post-agreement growth of UK exports has fallen. The five countries where the post-agreement growth of UK exports rose were Turkey, Chile, Lebanon, Papua New Guinea and Fiji. These therefore are the clear success stories of 42 years of EC negotiation on the UK’s behalf. Their total GDP in 2015 was $1.1tn, which is significantly less than the $1.5tn GDP of Australia with which the EC has yet to negotiate an agreement.

• By contrast most of Switzerland’s agreements (11 out of 15), most of Singapore’s (eight out of 12) and most of Korea’s (four out of five) have been followed by an increase in the rate of growth of their exports to the partner countries. Most Chilean agreements (13 out of 18) have been followed by a decline in the growth of their exports, though they differ from the British in that most of their pre-agreement rates of growth to these 13 countries were unsustainably high.

As you see the obfuscation dates way back, clearly indicating considerable vested interests which are not inline with the UK's or its subjects vested interests.

Attached is a link to an excellent document put together by Michael Burrage of Civitas. It is an expose of the single market and the limited value, to be kind that membership offers. 

Myth and Paradox of 

the Single Market

How the trade benefits of EU membership 

have been mis-sold

Michael Burrage

Link to: Single Market Exposé

Part One: The Myth of the Single Market’s Trade Benefits

1. A doubling of trade? A minister’s claim to parliament 8

2. Reviewing the evidence 15

3. What business told, and didn’t tell, the Foreign Office 34

Part Two: The Paradox of Who Benefits from the Single Market

4. What would have happened

in the absence of the Single Market? 64

5. Is there a single market in services? 89

6. Does ‘helping to make the rules’

in Brussels help UK exports? 103

Part Three: Conclusions

7. Image without substance 114

8. The case for an EU research agency in the UK 125

Appendices

A: BIS reply to the author’s FOI request 134

B: A 2007 report by EC staff

on the impact of the Internal Market 138

The remainers paint the leavers as liars, thieves and vagabonds.  Consider just a few points below and then ponder over the insistence that we must be part of the Single Market.

From the beginning (a fairy tale this is not). Early 70s until 2015 there are just 37 FTA agreements that the EU have negotiated with small countries, in some cases collections of countries. This brings the total to 55 as of 2017. The total GDP of these countries is just $7.7trn.

In 2011 A report was produced by the Department for Business, Innovation and skills (BIS). This report was seized upon, misinterpreted forming astonishing results which have proved to be untrue. The Minister of state took the now fabricated version of this report and informed Parliament. He claimed that: ‘

• EU countries trade twice as much with each other as they would do in the absence of the Single Market programme’.

Under the freedom of information act the report was eventually published. Upon examination, it was shown that this claim was a lie. 

• Sir Edward Jonathan Davey MP FRSA is a British Liberal Democrat politician. He has been the Member of Parliament for Kingston and Surbiton since the 2017 general election, having previously been MP for the constituency from 1997 to 2015.

There were no such findings, there was no such research to prove this theory out. In fact the report was based on a report produced in 2007 by three French Academics. This report was taken compiled together with an EU report which was an attempt to find failings with the single market, to prove a case for more integration and central control.

With the upcoming release of the document the Minister perhaps sensing a discomfort added further reports, produced after his claims. In a vain hope to recover his now tattered image these reports were: 

1. An internal report the department had published, but this showed no reliable evidence on the benefits of the Single Market.
2. A Review of the Balance of Competence between the UK and the EU, which was conducted by the Foreign Office. Inclusive of claims by the bastion of impartiality the CBI, TheCityUK and various trade federations and businesses. They each claimed that UK exporters have benefited by ceding responsibility for trade negotiations to the EC.

No report cited any evidence which supported the Minister's claim, clearly he misled the house.

To come to the 55 trade agreements now in place with various small countries and collections of countries. In total a GDP of$7.7trn.  Michael Burrage of Civitas compares here with those negotiated by Chile, Korea, Singapore and Switzerland, four independent countries which have none of the ‘heft’ or ‘clout’ or ‘negotiating leverage’ which the CBI and many businesses consider essential in trade negotiations. 

The conclusions are:

• By contrast the aggregate GDP of all the countries with which Chile had agreements in force is $58.3tn, Korea’s totalled $40.8tn, Singapore’s $38.7tn and Switzerland’s $39.8tn. However, the agreements of these four countries include their agreements with the EU, which has a GDP of $16.7tn.

• About 90 per cent of the agreements of these four smaller, independent countries include services, whereas only 68 per cent of the EC’s trade agreements do so.

• The EC has therefore opened services markets of just $4.8tn to UK exporters, whereas the Swiss have opened markets of $35tn, the Singaporeans of $37.2tn, the Koreans of $40tn and Chileans of $55.4tn. However, we do not know if the EC agreements secured better terms than these independent countries, since the scope of these agreements has never been compared in detail.

• Analysis of the growth of UK exports of goods before and after EC agreements have come into force, for at least five years, shows that in most cases (10 out of 15) the post-agreement growth of UK exports has fallen. The five countries where the post-agreement growth of UK exports rose were Turkey, Chile, Lebanon, Papua New Guinea and Fiji. These therefore are the clear success stories of 42 years of EC negotiation on the UK’s behalf. Their total GDP in 2015 was $1.1tn, which is significantly less than the $1.5tn GDP of Australia with which the EC has yet to negotiate an agreement.

• By contrast most of Switzerland’s agreements (11 out of 15), most of Singapore’s (eight out of 12) and most of Korea’s (four out of five) have been followed by an increase in the rate of growth of their exports to the partner countries. Most Chilean agreements (13 out of 18) have been followed by a decline in the growth of their exports, though they differ from the British in that most of their pre-agreement rates of growth to these 13 countries were unsustainably high.

As you see the obfuscation dates way back, clearly indicating considerable vested interests which are not inline with the UK's or its subjects vested interests.

The EU Is No Longer Fit For Purpose - Hell, Recalling Ambassadors!?

Go to Hell

Oh, dear we seemed to have rattled the EU Lords and Masters. I suggest they put this deal to bed in a sensible way, before they implode. Italy and France are fractured, France is faced with industrial strife that will ensure they are relegated to the Southern league of countries. As the economies continue to splutter under the regulatory burden then France's ability to mask their non-compliance with regulations, that they produce will become more visible, fractures will deepen. What on earth France to recall its EU ambassador to Italy. 

The EU is not fit for purpose! Mrs May made clear, WTO rules In her Lancaster House speech are better than a ‘bad deal’. This was widely interpreted as meaning that the UK would be prepared to walk away from the negotiations if an agreement can not be reached. We will rely on WTO rules as a framework under which to conduct trade. This was supposed to strengthen the UK’s negotiating hand because it implied that if the EU did not play ball with the UK there was a perfectly acceptable fall-back position. Then came remainers, doom sayer's creating many synonyms: Crashing Out, Cliff Edge, Falling off a cliff, falling into the clutches of WTO etc. This of course suited their narrative. But it's wrong, its pure sensationalism to distort the facts. For a start the UK was a founding member of the WTO and still holds its seat at the table. 

Only Stupid People Call People Stupid

Such sound bites have in fact influenced the outcome, but not in a way the EU expected. On one hand the EU have taken comfort that the powers will prevent a no deal. Therefore, the EU offered the worst deal possible. Probably encourage by Blair in order that the people of Britain will see the folly of their way and overturn the vote. On the other hand, people have seen through this and reacted to being labelled as stupid little Englanders. The EU should of known, when we are backed into a corner we rarely emerge in a way the opposition expects. Has history taught these guys' nothing. 

WTO as a proposition is perfectly acceptable.

However, that didn't stop eminent vested parties expressing their fear of a no deal outcome. In October 2016, the heads of four industrial lobby groups, the CBI, the EEF, the ICC and techUK, published an open letter to the Prime Minister saying: …

“Every credible study that has been conducted has shown that this WTO option would do serious and lasting damage to the UK economy and those of our trading partners. The Government should give certainty to business by immediately ruling this option out under any circumstances”. 

Again project fear. At no time have they identified what these ‘credible studies’ were. It's as though they want to portray the WTO is some sort of monster organization that consumes its members — especially juicy new ones like the UK. As I said before it is our brainchild, and we have our place at the WTO table.

USA trades with the EU under WTO

US - EU trade under WTO

For the monster that it is the EU trades with 111 countries including China (and Hong Kong), India, Russia, Brazil, Indonesia, Singapore, and the United States they do this perfectly well under WTO. In fact, they do it better, since the formation of the Single Market in 1993, the growth rate of UK exports to these ‘WTO Only’ countries has been four times faster than the growth of UK exports to the EU. Meanwhile, over this same period, the growth rate of exports from the 14 top ‘WTO Only’ countries to the EU has been 27% higher than exports to the EU from the UK. 

If trading under WTO is so scary then let's just rename it to the ‘American Version’ — because America trades with the EU, including the UK, extremely well. In fact, as umpteen countries do. Suddenly it doesn’t sound so disastrous. Indeed, when you examine the facts about different trading relationships, as collated by the redoubtable Michael Burrage,19 ‘WTO Only’ (Micheal Burrage Senior Research Fellow at Civitas) does not sound unappealing at all. Trading on a ‘WTO Only’ basis rely on the rules of the WTO for their trading arrangements and to settle any disputes. The WTO rules dictate only the maximum tariffs that may be applied. It is perfectly possible for a member country to reduce these tariffs or, indeed, to abolish them altogether. 

It shows that ‘the WTO clutches’ are not at all clutch-like.

Go to Hell

Oh, dear we seemed to have rattled the EU Lords and Masters. I suggest they put this deal to bed in a sensible way, before they implode. Italy and France are fractured, France is faced with industrial strife that will ensure they are relegated to the Southern league of countries. As the economies continue to splutter under the regulatory burden then France's ability to mask their non-compliance with regulations, that they produce will become more visible, fractures will deepen. What on earth France to recall its EU ambassador to Italy. 

The EU is not fit for purpose! Mrs May made clear, WTO rules In her Lancaster House speech are better than a ‘bad deal’. This was widely interpreted as meaning that the UK would be prepared to walk away from the negotiations if an agreement can not be reached. We will rely on WTO rules as a framework under which to conduct trade. This was supposed to strengthen the UK’s negotiating hand because it implied that if the EU did not play ball with the UK there was a perfectly acceptable fall-back position. Then came remainers, doom sayer's creating many synonyms: Crashing Out, Cliff Edge, Falling off a cliff, falling into the clutches of WTO etc. This of course suited their narrative. But it's wrong, its pure sensationalism to distort the facts. For a start the UK was a founding member of the WTO and still holds its seat at the table. 

Only Stupid People Call People Stupid

Such sound bites have in fact influenced the outcome, but not in a way the EU expected. On one hand the EU have taken comfort that the powers will prevent a no deal. Therefore, the EU offered the worst deal possible. Probably encourage by Blair in order that the people of Britain will see the folly of their way and overturn the vote. On the other hand, people have seen through this and reacted to being labelled as stupid little Englanders. The EU should of known, when we are backed into a corner we rarely emerge in a way the opposition expects. Has history taught these guys' nothing. 

WTO as a proposition is perfectly acceptable.

However, that didn't stop eminent vested parties expressing their fear of a no deal outcome. In October 2016, the heads of four industrial lobby groups, the CBI, the EEF, the ICC and techUK, published an open letter to the Prime Minister saying: …

“Every credible study that has been conducted has shown that this WTO option would do serious and lasting damage to the UK economy and those of our trading partners. The Government should give certainty to business by immediately ruling this option out under any circumstances”. 

Again project fear. At no time have they identified what these ‘credible studies’ were. It's as though they want to portray the WTO is some sort of monster organization that consumes its members — especially juicy new ones like the UK. As I said before it is our brainchild, and we have our place at the WTO table.

USA trades with the EU under WTO

US - EU trade under WTO

For the monster that it is the EU trades with 111 countries including China (and Hong Kong), India, Russia, Brazil, Indonesia, Singapore, and the United States they do this perfectly well under WTO. In fact, they do it better, since the formation of the Single Market in 1993, the growth rate of UK exports to these ‘WTO Only’ countries has been four times faster than the growth of UK exports to the EU. Meanwhile, over this same period, the growth rate of exports from the 14 top ‘WTO Only’ countries to the EU has been 27% higher than exports to the EU from the UK. 

If trading under WTO is so scary then let's just rename it to the ‘American Version’ — because America trades with the EU, including the UK, extremely well. In fact, as umpteen countries do. Suddenly it doesn’t sound so disastrous. Indeed, when you examine the facts about different trading relationships, as collated by the redoubtable Michael Burrage,19 ‘WTO Only’ (Micheal Burrage Senior Research Fellow at Civitas) does not sound unappealing at all. Trading on a ‘WTO Only’ basis rely on the rules of the WTO for their trading arrangements and to settle any disputes. The WTO rules dictate only the maximum tariffs that may be applied. It is perfectly possible for a member country to reduce these tariffs or, indeed, to abolish them altogether. 

It shows that ‘the WTO clutches’ are not at all clutch-like.