Is Britain’s EU membership beneficial for it and the EU as a whole?

1.Introduction

The European Union – a political and economic integration project bringing together 28 countries in Europe – is currently facing a major challenge. Great Britain is set to hold a referendum in June to decide whether to remain in the union. Britain’s exit from the EU, commonly referred to as Brexit, may significantly undermine the union’s project of integration.

In this essay, it is argued that Britain’s EU membership will be beneficial for it and the EU in general. To address this, this essay will examine the various benefits for Britain to remain in the union, as well as the fact that Brexit cannot effectively regain UK’s lost sovereign power to the EU.

A United Kingdom flag flying next to a European Union flag. Photo: The Telegraph.

A United Kingdom flag flying next to a European Union flag. Photo: Daily Mail.

2.1 Benefits for Britain to remain in the European single market 

First of all, Great Britain’s economy is better off by remaining inside the European Union. Consisting of 28 member states and more than 500 million inhabitants (European Union, 2015), the EU had a total GDP of USD16.5 trillion in 2015, according to the International Monetary Fund. The European Economic Area, which includes all European Union nations but Croatia, in addition to Norway, Iceland and Liechtenstein – is a single market that allows free movement of people, goods and capital (Kondratenko, 2013). Consisting of a total population of more than 500 million within its boundaries, the EEA provides huge business opportunities for European companies.

Brexit poses an imminent threat of the UK being expelled from the single market. German Finance Minister, Wolfgang Schäuble, has previously vowed that Britain would be shut out of the single market if it votes for Brexit (Lichfield, 2016). If Britain is expelled from the market, it is very likely that British goods will be subject to a high common tariff in continental Europe (Bootle, 2015). This is set to harm British trade and undermine the stability of its economy.

Brexit advocates have frequently come up with the argument that further EU integration will undermine Britain from pursuing its national interests in signing trade agreements with other countries, since all negotiations will have to be based upon the EU macroeconomic policies (Baimbridge, 2010). For instance, Britain will be able to adopt a flexible Commons Customs Tariff that is currently set by the European Union, regulating imports from outside the union (Giles, 2016). Hence, advocates argue that Britain is unable to effectively sign trade deals with countries outside the bloc, especially with Asian countries.

However, this argument is weak because the economic consequences of Brexit are very unpredictable, with many economists predicting that it will actually hamper British trade with other countries (Cadman, 2016). The idea that British trade with China is undermined by EU regulations can also be very easily refuted with the case of Germany.

British empire trade

British empire trade. Photo: http://www.britishempire.co.uk/

According to the German Federal Statistics Office, German exports to China in 2015 amounted to 71.21 billion Euros (Statistisches Bundesamt, 2016). This figure is four times the value of British exports to China, which, according to latest official statistics, was only at 18.12 billion Euros in 2014 (UKTI, 2015). Germany is currently China’s largest trading partner in Europe, and many German companies have been very actively promoting their interests in China (Dempsey, 2010).

In 2014, Germany managed to sign a comprehensive strategic partnership agreement with China (Mu, 2014). The agreement offered favourable terms for companies in both countries to operate in each other’s territories, and confirmed the establishment of regular high-level dialogues to resolve trade disputes. This shows that EU countries are able to extend their trade interests with other countries under the existing regulations.

It is also argued that Britain is one of the highest net financial contributors to the union. Since the EU regulation allows weaker economies to get more money out of the budget than more advanced countries, Britain is the second largest contributor to EU budget. In 2013, Britain’s net contribution amounted to 10.8 billion Euros (Chan, 2014). Thus, Brexit advocates said Britain would be able to retain control over its expenditure if it leaves the union (Johnson, 2016).

However, this notion neglects the fact that Britain would only be allowed to participate in the European single market if it pays into the pot. The Agreement on the EEA stipulated that one of the goals of establishing an internal market is to reduce social and economic disparities in Europe (Grant, 2016). Thus, if a post-Brexit UK wishes to gain free trade access to the single market, it will still have to contribute financially to the rest of Europe.

Take the EEA Grant as an example. The three EEA countries that are not part of EU – Norway, Iceland and Liechtenstein – were made to donate money annually to poorer European countries before they are allowed into the internal market. From 2009 to 2014, the donor countries spent 1.8 billion Euros to channel many programmes in other European countries (Helgesen, 2015). The logic is clear: wealthier countries have to subsidise poorer countries in Europe in exchange of the economic benefits of staying in the European market. In fact, studies have shown that all of the five costliest EU-derived legislation that UK are paying will also continue to apply in the EEA (Buttonwood, 2016) – meaning that Brexit cannot save the UK from the financial contribution.

Iceland Reykjavik

The Icelandic capital of Reykjavik. Photo: WikiMedia.

In addition, Brexit will almost certainly shut Britain off the benefits from the proposed Transatlantic Trade and Investment Partnership (TTIP) – a trade agreement currently negotiated between EU and the United States. Opponents to the TTIP have argued that the deal will threaten British sovereignty and undermine public services in the UK (Williams, 2015). However, the UK government has projected that the deal could boost the British economy by as much as 10 billion GBP annually (UK Department for Business, 2014). Hence, Brexit would almost deny the UK of any economic benefits that may arise from the TTIP.

To sum up, Brexit will significantly undermine and bring about uncertainties to UK’s economy. Unless Brexit proponents are willing to risk the uncertainties of not engaging in the single market following a EU exit, Brexit will not be able to reclaim the loss of British sovereignty. This issue is to be further addressed in the next section.

 

2.2 Brexit cannot effectively reclaim loss of sovereignty

One of the reasons fuelling the heated Brexit discussion is the refugee crisis. During the EU summit in February where British Prime Minister David Cameron secured a compromise deal with other European leaders, pro-Brexit UKIP leader Nigel Farage said the reason why UK voters wanted Brexit was because the UK was unable to maintain effective control over its borders, which was a “loss of sovereignty” (Jacobsen, 2016). Brexit proponents said leaving the EU would allow the country to better curb immigration.

Obama European leaders

David Cameron (fifth from right). Photo: WikiMedia.

However, this argument is flawed with respect to the examples of Norway and Switzerland. The latter, a non-EU country that has access to the single market, was forced to accept unlimited EU migration as part of the agreement (Foster, 2016). Norway, like Iceland and Liechtenstein, is also part of the Schengen Area where countries have abolished border controls and adopted a common visa policy.

According to the United States Central Intelligence Agency, Norway was ranked number 16 in net migration in 2015, with 7.25 migrations per 1,000 people. Switzerland was ranked 27 with 4.74 migrants per 1,000 people. But, on the same report, Britain was ranked 40 with 2.54 migrants per 1,000 people (CIA, 2016).

Both Switzerland and Norway had higher rates of migration than the UK, even though they are not part of the union. Since both countries had to accept EU migration to secure access to the internal market, it is unlikely that the UK will be exempted from this requirement.

Furthermore, supporters have incorrectly argued that Brexit can help preserve parliamentary sovereignty. They said that currently, 14 to 17 percent of all UK laws were derived from EU regulations (Miller, 2010). Hence, Brexit can exempt the country from “Brussels overreach”, and Britain will be able to set up its own desirable laws (Johnston, 2016).

However, Britain will still have to continue give up part of its sovereignty and adopt regulations if it wishes to participate in EU programmes. Ironically, Brexit will even further diminish its role in Brussel’s policy-making process, which will in turn hamper British national interests when it comes to incorporating EU laws.

Former Norwegian defence minister Epsen Barth Eide said that Norway had to abide by Brussels’ decisions even though it did not participate in its decision-making process. He said almost three-quarter of EU legislation has been adopted by Norway, adding that not a single western European country could survive without participating in any degree of European integration, like trade and academic collaboration (Eide, 2015). If Britain leaves the EU but wishes to participate in certain programmes, it will be forced to adopt laws that it did not draft, further undermining parliamentary sovereignty.

British parliament

British parliament. Photo: WikiMedia.

Take the agriculture and fisheries industry as an example. Currently, all British fishermen have to follow the EU-mandated Common Fisheries Policy, a quota system that set limits on the amount of fish that can be caught by each country. Even though a post-Brexit UK can decide on its own fisheries policy, British farmers will still have to subject to EU standards if they export fish products to Europe (Foster, 2016). EU leaders can even institute a tariff if they believe the British policy harms the lives of continental European fishermen, indirectly controlling over British legislation.

 

2.3 Brexit may trigger Scottish independence sentiments

From a domestic level of analysis, Brexit can also potentially instigate Scottish independence sentiments.

Polls have shown that the Scottish population is generally pro-EU, and Scottish leaders have vowed that they will press for another independence referendum if the UK as a whole votes to leave the union (Carrell, 2016). Scottish first minister, Nicola Sturgeon, is leading the pro-European Scottish National Party in an anti-Brexit campaign.

In fact, a poll conducted in March 2016 revealed that an overwhelming majority – 65 percent – of Scots supported staying in the EU (STV, 2016). Even though David Cameron has said after the 2014 Scottish independence referendum that Scots will not be able to hold another independence referendum, Brexit will surely stir up independence sentiments. Hence, on a domestic level, Brexit will heighten the possibility of Scotland leaving the United Kingdom.

Scottish flag

Scottish flag. Photo: WikiMedia.

 

2.4 Specific areas that Britain benefits from EU membership

There are many areas in which Britain benefits from its EU membership, for example, British scientific research funding and the Erasmus scheme.

According to the UK National Academy of Science, The Royal Society, the UK is one of the largest recipients of research funding from the union. From 2007 to 2013, it received 8.8 billion Euros on research and development – the fourth largest share among EU member states (Royal Society, 2016).

Stephen Hawking, a fellow of the society, has warned that Brexit will significantly hamper scientific research in Britain, as money subsidy will decrease and new immigration policies will reduce the inflow of talents (Hirschler, 2016). Even though the British government may be able to provide the same amount of scientific research subsidy following its exit from the EU, the new immigration restrictions as suggested by Brexit proponents can be harmful.

Also, a Member of Parliament for Cambridge argued that the existing academic collaboration of British universities inside the EU network – especially with German, French and Italian universities – will be cut off if the country leaves the European Union (Zeichner, 2016). This can also undermine British universities from its collaboration projects.

Among European universities, the Erasmus scheme is also a network that fosters exchanges between tertiary students. The scheme subsidises students to go on an exchange in another European university, promoting cultural understanding and academic collaboration (Proudfoot, 2016). Leaving the European Union can also possibly shut the UK out of the network, or, as is the case of Norway, Britain may have to pay to remain part of the network*. It is not even certain if other European leaders may allow the UK to remain inside the system, adding uncertainty towards the wellbeing of British universities.

*It has later been pointed out that Erasmus scheme is open to all European countries.

The Erasmus scheme

The Erasmus scheme. Photo: WikiMedia.

 

2.5 Britain staying in EU strengthens the integration project

It remains obvious that Britain remaining inside the EU will benefit the union.

The whole project of European integration to create an “ever closer union” has been born of the motive to preserve a common European identity and create longlasting peace in the continent. Even Boris Johnson, who is vocally supportive of Brexit, understands this fundamental idea (Johnson, 2016).

The project can be understood with regards to the liberalist school of thought in international relations. Economic liberalism dictates that increasing trade between countries can raise their opportunity costs of starting wars (Griffiths, 2011). Hence, states will have the tendency to pursue peaceful relations once their trade volume increases.

This is an effort to combat the unstable balance of power, known as realpolitik, which dictated European politics prior to WWI. Some political scholars have argued that realpolitik effectively gave rise to the outbreak of the First World War, and this has to be replaced (Bew, 2014).

A British stay in the system can reaffirm the project’s unity. Even though Britain has been exempted from the ideal of creating an “ever closer union” following the negotiations (Jacobsen, 2016), the whole EU project will, at least, not fall apart. This can preserve European solidarity and constitute peace.

 

3.Conclusion

In all, this essay has identified and explained on the reasons why Britain remaining in the EU is both beneficial to the country and the union as a whole.


Submitted for HKU course: EUST3010.

Copyright © 2016 Eric Cheung. All rights reserved.

Please note that copying without proper acknowledgement (plagiarism) is a very serious offence in the academic world.

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