EU Trade

What exactly was the Brexit manifesto?

Labour Party

The European Parliamentary Labour Party (EPLP) has raised concerns over the future of Britain’s immediate involvement of the European Membership and our current membership following the referendum.

There are, the EPLP warns, “two unpalatable options”. These are currently being contemplated but both of options are problematic. Some believe we can exit the European Union but retain membership to the European Single Market. The issue with this is that in order to gain full access, Britain must accept the common rules, and this means it will no longer have a say over future changes. A further consideration is that one of the central points of many leave campaigners was the issue of free movement of labour.

The free movement of labour, is part of the strict criteria which members must sign up to if they are to enjoy membership to and trade in the single market. It is very likely therefore that the UK would need to accept free movement as part of the terms.

The other alternative advocated by some ‘Brexiteers’ was to leave the single market entirely. In this scenario the damage to the economy will be significant, not least because we would face tariffs on exports to the EU.

In addition, many current trade agreements we have in place globally will need to be replaced because these deals were agreed as part of our relationship with the EU. They were made centrally by the European Union. So the UK would need to rapidly re negotiate trade agreements to replace these.

Although the result of the referendum was to end our membership of the European Union, there is no explicit mandate for what happens next as my colleague Richard Corbett MEP has pointed out.

The problem with the Brexit campaign, as we now know, is that there was no clear plan offered for life post Brexit. Neither was there a clear manifesto and as a result the next steps are muddy and unclear. A full debate in the British Parliament is therefore essential.

Richard Corbett said yesterday: “The idea that the recent referendum has completely settled the issue is surely dead. Referendums are supposed to settle issues. But does the UK look settled and calm?”

The new Prime Minister has a huge task ahead of her (or him) and how s/he directs the narrative and the first stage of negotiations is crucial, but first Parliament must hold a full and in depth debate about the future of negotiations.

Lord Mandelson sets out his ‘Better In’ argument to the City:

Labour Party

Delivering a speech in the City of London yesterday, the former EU trade commissioner, Lord Mandelson, warned of the implications for Britain’s ability to trade in favourable terms with the EU in the event of a Brexit.

He explained how our ability to trade freely would be hindered not only in the European Union but also that it would have wider ramifications affecting our position in the global community and could impact our position as the fifth largest economy.

In his speech, Lord Mandelson pointed out that renegotiating the terms of trade would take a significant amount of time to arrange if we voted to leave. “What is at stake are the terms on which we would trade, especially for the financial services that are a vital part of UK trade. And just how long it would take to negotiate these terms,” he told the audience.

He also pointed out that Britain would have no say in the terms and conditions of trade agreements and would have to comply with European terms in order to get full un hindered access. “In Europe we will only get full, unhindered access if we re-accept all the regulatory rules and standards of the Single Market. Period. It’s a binary choice.”

He explained his experience in trade negotiations (he was the EU Commissioner between 2004-2008) meant he understood just how complicated trade policy is, far more so than the ‘Brexiters’ suggest.

Clearly, by exiting Europe Britain would not be in a strong bargaining position, “a politically-charged negotiation of a free trade agreement with the EU would, in reality, be much harder than this argument suggests,” he said.

Lord Mandelson also pointed out that as a result of the major disruption caused by leaving the single market “there would be a loss of the favourable access our exporters have in other parts of the world as a result of our self-exclusion from the EU’s common trade policy and its international trade deals would have more profound consequences than the Brexit argument admits.”

Recovering from these profound consequences would be difficult, Lord Mandelson warned. Developing a new set of British global deals “will be hard to obtain and won’t even come close to compensating for either of these two setbacks”, he said.

He reminded the audience that the European Union is Britain’s largest market, thousands of British SME businesses join cross-border supply chains and production networks. The effect harmonization and standardization has on businesses means impediments, such as tariffs, to doing business are removed.

You can read more on Lord Mandelson’s speech here:

Inept Cameron sails Britain merrily down the river

Labour Party

The result of last night’s Eurozone summit is a disaster for Britain.

David Cameron has vetoed the proposed treaty on the euro involving all 27 member states because he is so incapable. He failed to adequately negotiate a situation which would ensure Britain is kept in the process.

If the treaty of all 27 member states had gone ahead British sovereignty would not have been anymore affected because British sovereignty was never at threat, the new treaty clause was solely about the euro.

The real consequence of Cameron’s actions for Britain is that our influence will now be severely limited. There is a real danger that we will not be able to protect important British interests especially in the EU single market which is very important for British trade and jobs.

Just one example of our monthly trade with the EU shows how important it is financially to the UK to have such good relations. An example can be found in just one month in the UK’s EU exports which increased by £1.6 billion (13.4%) in a single month from August-September 2011, to £13.6 billion. And compared to September 2010, exports have increased by £1.7 billion (14.8 %).

It’s becoming increasingly apparent that Cameron is despised in the EU, by Merkel and Sarkosy especially. The problems began in 2009 when Cameron pulled Conservative MEPs out of the European People’s Party (EPP), the centre-right political grouping in the European Parliament.  He then formed his own grouping with various fringe parties from across Europe, leaving Merkel and Sarkosy incandescent.

Such a loss of power is not helpful for the UK and it is imperative that we continue to be part of future negotiations with the euro zone. A two tier Europe, which may well result from this, would be disastrous for the UK and as a result we will not be able to fully protect British interests, as Sarkosy has already pointed out.

Domestically there are going to be fallouts. Nick Clegg, is as we know, very pro-European and yet the Deputy Prime Minister is also part of a government which has loosened ties with the EU and lost the respect of European heads of state. This will undoubtedly have implications for the survival of the coalition. And globally there are massive implications; markets have fallen and during this uncertain time it will continue to hit the already fragile global economy.