Miles Saltiel is a Senior Fellow at the Adam Smith Institue
It is ten years since the Brexit vote and six and a half years since it took effect. The anniversary of the vote has given rise to a mighty wailing and gnashing of teeth from Britain’s latter-day anti-Dreyfusards. Their arguments are invariably economic; their silence on the politics concedes that the argument for sovereignty cannot be gainsaid.
But what about those economic arguments? The most apparently cogent claim—the supposed loss of 4 per cent of GDP growth over 15 years from 2021—accumulates annual figures so tiny that they could be balancing errors. It also relies upon counterfactuals which are, in my opinion, just that: backward-looking hypotheses which de facto assume their conclusions. Six and a half years in, we observe that they overlook the real effect of Brexit: a shock accelerating the pre-existing direction of the British economy towards services and global customers, and away from goods and European markets.
We will do better to observe the policy parameters on international trade presented before the event by international bodies and academics in the field. They show that leaving the EU presented the UK with negligible trade downside, if not paving the way to redress the drawbacks intrinsic to membership.
First, the Customs Union put British exporters of goods to the EU at a consistent disadvantage. This is because the post-war but pre-Donald Trump decline in duties from c.12 per cent to under 4 per cent puts emphasis on non-tariff measures (NTMs), where the EU is a notable offender. In 2019, the OECD’s figures showed that the EU had higher internal NTMs than the UK in 20 of the 22 sectors measured. Such differentials have been present for as long as the figures have been compiled, telling us that other member states could sell goods to us more easily than we could sell to them. Even as EU members, it was not the case that we had completely free trade with the EU. Residual barriers have always existed, before and after Brexit.
Second, in August 2020 the EU’s own analysis of business services showed that internal and external barriers to competition were identical across 104 of 115 measures. This suggests that, by this measure, the Single Market provides little benefit.
Advocates of Britain’s membership of the EU like to dwell on the sheer proximity and size of the European market, following the “gravity model” of trade, but the reality of the EU’s asymmetric or deficient arrangements makes this irrelevant. Indeed, none of those in the wailing and teeth-gnashing contingent have engaged with these metrics. They never will, because they so weaken the argument for being in the EU in the first place and demolish the argument for rejoining.
I am so glad to read that the impact of leaving the EU was negligible because when we joined the Common Market and shafted our Commonwealth we lost some serious trade with Australia and New Zealand in particular almost to the point of not benefitting as much by joining the Common Market after all. Now that we have our Sovereignty back, I cannot believe how blind our Parliamentarians are to the opportunities that being able to trade with our Commonwealth again can give us - having made our fortunes Free Trading around the world, we should start doing that again with energy and delight - after all as Asia is the rising star and we already have done a trade deal with India with an overall Commonwealth market of 2.6billion people seems a no brainer to me and re-attaches us to our ancestors again who have left us an incredible legacy if we have the wit to value and develop it.