Despite repeated claims that our membership of the single market has been beneficial to the UK economy, no-one ever actually studied the matter or examined the evidence that exists until the Brexit referendum last year.
That the EU was a successful project and that Britain’s continued membership was vital to our commercial success were articles of faith that had never been questioned, let alone studied or tested.
No British government attempted to measure or monitor the effect of EU membership, until the Treasury hastily put together a positive-sounding analysis for publication just before the referendum – a document that has since been found to be both unreliable and untrustworthy by later events, and has since been disavowed by the Bank of England among others.
Now, the think-tank Civitas has used seven reliable, publicly-accessible databases of historical financial facts to test the claims of benefits derived from the EU – and found them to be contradicted by the evidence.
Even more astonishing is the finding – based on hard evidence- that the most advantageous course for Britain is to simply walk away from the EU and adopt World Trade Organisation (WTO) trading rules, rather than trying to negotiate a bilateral trade agreement with Brussels.
The Civitas findings are:-
Countries exporting to the EU under WTO rules dominate the rankings of the fastest growing exporters to it, and their real growth rates exceed that of countries which trade with the EU under bilateral treaties, or as EEA members, or as fellow EU members. This evidence directly contradicts the Treasury estimates of the relative benefits of these three trade relationships for post-Brexit UK. Those exporting under WTO rules have been the most successful exporters to the EU under the Single Market, not the least.
Over the 23 years of the Single Market, UK annual export growth to Single Market countries has been very low indeed (1.0 per cent), and comfortably exceeded by those trading in every other kind of relationship, under WTO rules (1.93 per cent), as EU members (2.28 per cent) under bilateral agreements (3.58 per cent) and as EEA members (3.91 per cent). When ranked among the top 40 fastest-growing larger exporters of goods to the EU from 1993 to 2015, the UK finishes 36th. The fact that many non-member countries’ exports have grown at a faster rate throws doubt on the notion that the UK has benefited greatly from membership, and that non-members have been at a disadvantage.
A view of the goods exports of nations trading with the EU shows that UK exports had more rapid growth than others during the Common Market years from 1973 to 1992. However, it has since experienced slower growth than all the others during the Single Market years from 1993 to 2015, reinforcing doubts about the supposed benefits of the Single Market.
Just how far most of us – including trade associations – have been misled by government claims of the benefits of EU membership is highlighted by a fascinating case study – of whiskey. The Scotch Whiskey Association has been one of the single market’s most enthusiastic supporters for many years. Yet the trade figures show that growth in exports of Scotch whisky to the EU from 1993 to 2014 was only 1.62 per cent, while growth of Bourbon, which exported to the EU under WTO rules, was 8.6 per cent.
Simply put – to paraphrase Donald Trump – the EU has been eating our lunch. And, on these figures, the smartest course of action for our negotiators is to walk away.