Single Market not so advantageous to Britain
February 2nd, 2016
Letter to the Daily Telegraph, published on 27th January 2016
The letter from the Conservative MPs for Reform in Europe (23rd January) implies that there is something uniquely special about UK access to a tariff-free “trading bloc of 500 million people”.
But for the UK this so-called Single market is not really tariff-free at all. In 2014 we made a net payment of £11,442 Million to the EU to allow £147,928 Million worth of our goods to be imported by the EU from Britain. This makes an average effective tariff on our goods of 7.7%.
This needs to be compared with the EU’s average tariff applied to goods imported from countries outside the EU, including our fellow Anglophone countries in North America and Australasia, of 5.3%.
There is thus nothing especially “advantageous” for Britain’s access to the EU market as the MPs’ letter puts it. If the nonsensical fears that the EU would impose tariffs on British goods entering their markets were ever realised, then our payments to them would be more than compensated by the tariffs we would impose on their exports to us.
Given the enormous £77 Billion goods trade deficit we currently have with the EU we would be nearly £6 Billion better off from this source alone, plenty of scope to reduce business taxation to compensate for any tariff payments they might have to make. But it won’t happen. The Germans, especially, are not that daft!