UKIP and their leader Nigel Farage managed to get David Cameron to commit to a referendum as part of his election campaign. This was needed to sway some of the UKIP voters his way in some of the closely contested seats. David Cameron has had the chance to negotiate a new deal with the EU which would make it more attractive to voters to wish to stay a part of the EU.
David Cameron has negotiated:
Stay in the European Economic Area (EEA) like Norway, so leave the EU but keep us under EU control and contribute to the EU budget just as much as we currently do. Also we would still have to follow the rules passed by the EU but have no say in making the rules. So this would seem like a step backwards.
The other option would be to replicate Switzerland who are not a member of the EEA or EU, but can still trade through bilateral agreements, so Switzerland have the free trade but at a price as it still has an open labour market and Brussels can force them to still take migrants. The problem is that with the current European immigration problems mean that it would be very unlikely that we would be able to negotiate a deal where we can keep the boarders closed.
The EU is the UKs biggest trade market with 52% of total trade and services worth more than £400bn. With membership we benefit from better competition, removal of trade barriers, reduction of business costs and greater business efficiency.
Businesses in Britain are looking at this from a lot of different angles as it can affect them in all sorts of ways from the free trade they currently conduct with other EU members as well as the ‘red tape’ that Brussels govern them by. The British Chambers of Commerce say 55% of members back staying in a reformed EU as Cameron tries to cut back the ‘red tape’ for businesses. Others say that there are no credible alternatives to staying in the EU. Complete withdrawal would see trade barriers erected, this would cause difficulties for car exports which would have to deal with tariffs they previously didn’t.
However some think the EU is not as important as it used to be to British trade. Coupled with continuing turmoil in the eurozone will make it even less so. Even if Britain did not manage to negotiate a free trade deal with the EU it would not be as disastrous as they claim. The UK would be free to establish bilateral trade agreements with fast growing export markets such as China, Singapore, Brazil, Russia and India through the World Trade Organisation.
We would need to apply for visas to holiday in France, over a million expats in Spain would have to do a Spanish driving test and file tax returns to apply for residence. If the UK were to leave the EU it would make some 2 million British expats across Europe illegal immigrants overnight. The image for most of an illegal immigrant isn’t usually a retired Briton living in Spain, however that is exactly what they would be.
One of the biggest problems that could occur should the vote sway to leave the EU is the Northern Irish/Republic of Ireland border would have to be closed. This will inevitably unsettle the area perhaps to levels that were previously catastrophic. I’m fairly sure nobody wants that.
Therefore from the current standing that we find ourselves in, if the Prime Minister can manage to pull off a real negotiation and deliver on what he has set out to achieve for the UK then I think we would be foolish to walk away from that kind of deal. Obviously we have almost 2 years of debates and campaigns to look forward to before a choice has to be made, so let’s strap in and hope for the best.
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