Daniel Hannan MEP: Nine myths about the EU
The second myth in the article above is "The EU is the world’s largest free trade area". Daniel Hannan MEP says:
"Actually, it isn’t a free trade area at all, it’s a customs union. This may sound like a technical distinction, but it’s of critical importance. A free trade area is a common market, within which goods, services, capital and sometimes labour can circulate without hindrance. Examples are NAFTA in North America, EFTA in Europe and ASEAN in South East Asia. A customs union, by contrast, surrounds itself with a common external tariff, and conducts all trade talks on behalf of its member nations."
"Why does this matter so much? Because every continent on the planet is now experiencing economic growth except Europe. Individual EU states can’t sign bilateral free-trade agreements with, say, China or India; they have to wait for Brussels to do so on their behalf. For a country as naturally inclined to open commerce as Britain, this is a real disadvantage, since we are in effect dragged into a protectionist common position by French film-makers, Italian textile manufacturers and what have you."
In his book "Why Vote Leave" Hannan points out that 79 per cent of business activity in the UK is "whollly internal", with most firms trading "only within a 10-mile radius of where they are sited." He continues "Of the 21 per cent of our GDP that depends on overseas commerce, 10 per cent is accounted for by trade with the EU, and 11 per cent by trade with the rest of the world.
"In other words, for the sake of the 10 per cent of our economy that is linked to the EU, we must apply 100 per cent of EU rules to 100 per cent of our businesses. And as we shall see, even that 10 per cent figure will soon be out of date. Our trade with the EU is in deficit and falling, while our trade with the rest of the world is in surplus and rising."
Later he says "European integration was supposed to make people wealthier, but the EU has fallen further and further behind in relative terms, from 30 per cent of the world economy in 1980 to 17 per cent today".