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Originally Posted by Chris
Less than 50%, and dropping - despite 40 years of policies explicitly designed to reorientate our trading patterns away from the world as a whole and inwards towards Europe. And we have a trade deficit with the EU - they sell more to us than we sell to them. To assume that there will be punitive tariffs for UK exporters is to fly in the face of common sense. The EU stands to lose a lot more than we do out of a tariff war.
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But this suggests that it will continue to drop and not that 'less than 50%' is actually a temporary low percentage caused by the Eurozone crisis. It's not as if Europe will just fade away with less and less economic activity happening. As it heads out of a crisis, probably still a number of years away, there is no reason to doubt that they will start to import more again. This is all leaving aside the fact that 45%-50% is a massive number when dealing with a single bloc.
No one is saying it will be a trade war but what exactly are the terms in which will we continue to do business with Europe? Even if we have it all our own way, which is unlikely, we will still be subject to some EU regulations. We still won't be export products which do not meet EU standards to the EU. We just won't be able to shape those regulations.
If we end up like Norway, part of the European Economic Area (which is the likely concession the EU would make to us) then we're subject to all sorts of trade and business regulations only we have no veto and no power to sway them. We, like Norway, would simply have to say 'fine'.
The global nature of financial services also means that London's banks will still have to abide by regulations and reports required of them by the EBA. Although the financial sector is occasionally upset with Europe our membership of the EU is a benefit, not a hindrance, to them setting up here.
http://www.thecityuk.com/research/ou...he-eu-economy/
http://www.thecityuk.com/blog/why-ou...opportunities/
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Hezza is merely regurgitating all the same scare stories that were put about by those that wanted us to join the Euro. We didn't join the Euro. The world didn't end. The British economy didn't end. In fact, now the Euro has landed hard on its rear end, the British economy is doing rather better than comparable Eurozone economies like Spain and Italy, which are crippled and facing endemic unemployment, despite having balance sheets which on paper are healthier than ours, because the Spanish and Italian governments have surrendered control of the policy controls necessary to sort the problem out for themselves.
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It's quite easy to have scare stories when the alternative route is not well defined. We cannot assume that our trade relationship with Europe will be in the event we leave. Some of our 'partners' will have a special interest and not giving us the terms we want. They all have a vested interest in getting car factories placed in their countries, not ours. Berlin has gone been gunning for the technology start-up industry and we're starting to do ok there with the creation of the Silicon Roundabout community. If you go to one of the many meetings they have there you'll see just how many Europeans work in it. In the absence of the EU right-to-work then this too will be hit, no longer will they be able to recruit from across the continent. I don't have much faith in our immigration laws compensating for that either.
It seems to me that in the bast case scenario we'll have no hit at all in our trade but we'll have to abide by EU regulation, ala Norway, with no power to shape them. The worst case scenario is that we are hit, especially in manufacturing. The holy grail of complete access to the European Market with no strings attached looks a pipe dream. Maybe it isn't. However as Heseltine points out, we're talking about a referendum and we know nothing of what it will be about.