Brexit Part III, The Case for Remaining
On October 27th, 1806, French troops under the command of Napoleon Bonaparte entered Berlin shortly after defeating the Prussian armies at the Battle of Jena. The Grande Armée plundered the city, beginning a long occupation of German territory, as Napoleon incorporated the former Holy Roman Empire into his growing French Empire.
65 years later, Prussian troops returned the favor, laying siege to Paris in the Franco-Prussian war. After four months of bombardment and with their capital city on the brink of starvation, France capitulated. Prussia’s ‘Iron Chancellor’, Otto von Bismarck, then declared the establishment of Germany as a united nation right there on the spot at the Palace of Versailles — Germany as a country was literally birthed among the smoldering ashes of its perennial rival. The bitter French simply bided their time for the inevitable next round. At the end of World War I, with millions dead on both sides, France finally secured a Pyrrhic victory and forced the German High Command to sign an armistice on the dining car of a passenger train in the Compeigne Forest. 22 years later Adolf Hitler, ever the master propagandist, brought the exact same dining car to the exact same spot after the Fall of France to have the French this time sign their own surrender. Was this bloody game of proverbial ping pong going to go on for ever? For 200 years — and in fact we could much further back than Napoleon — each generation had endured its own variety of Franco-German enmity, every one more bloody than the last, with no prospect of the rivalry coming to an end.
Today, however, conflict between Germany and France is unthinkable, largely due to powerful economic and diplomatic ties that bind them via the EU. If the European Union achieves absolutely nothing throughout its existence besides the establishment of a permanent peace between these two great warring nations, it ought still be regarded as the greatest political creation in diplomatic history, and more than deserving of the Nobel Peace Prize it won in 2012.
Moreover, France and Germany haven’t been the only beneficiaries — Europe as a whole, a continent whose history is pretty much dated in terms of wars, is more at peace now that it has ever been. Peace, of course, is a good thing in and of itself; but even if that doesn’t move you and you only care about Britain’s interests, the absence of major conflict has been a desirable outcome — the last two rounds of Franco-German fighting saw Britain dragged into them at considerable cost of lives and money. We should commend and want to remain a part of any political organization that has brought such stability to the continent, not weaken it (as we certainly will do) by breaking away. This is not to say that Brexit will precipitate World War 3 — it won’t. Yet by removing one of its most powerful members, the EU will undoubtedly become weaker, making it less effective in its aim of resolving disagreements between countries diplomatically rather than adversarially. Britain would be the first country to leave the EU but if it did so it is unlikely it would be the last. Other member states are musing their own exits — some even have already taken the all important step of selecting a catchy nickname: ‘Italeave’ (Italy), ‘Frexit’ (France), and, perhaps my favorite, ‘Czech-out’ (Czech Republic). A divided Europe would not only be prone to internal fracture, but would also find itself less capable of standing up to other less gentle superpowers, such as Russia and China. It’s no wonder that Vladimir Putin himself is cheering on Brexit from his Kremlin dugout, perhaps even tipping the scales whenever he thinks he can get away with it.
Even if we dismiss — at great risk — the peace and stability argument, there are several much more concrete and immediate harms Brexit will bring about that make it a terrible idea for the country.
Economics
While much has changed about the EU since the first incarnation of the organization in 1952 (European Coal and Steel Community), it is still at its core an economic arrangement. The two pillars of that economic arrangement are the Single Market (formerly the Common Market) and the Customs Union. While the Customs Union sets a common external rate of tariff on all goods emanating from outside the union, the Single Market ensures the free circulation of goods, services, capital, and labor inside the union. ‘Free’ here is understood to mean not subject to taxes, customs duties, quotas or discrimination based on country of origin. The Single Market and the Customs Union are linked — it’s difficult to have the one without the other, since a country that was in the Single Market but not a signatory to the Customs Union would open itself up as a potential ‘back door’ into the Single Market¹.
With an annual GDP of $18 trillion, the EU represents 16% of global purchasing power — second only to the United States in terms of economic might. Membership of this club, therefore, far from being a burden or a form of economic oppression, is in fact a great boon. With countries begging to join the EU all the time, precisely because of the economic boost it provides, it screams pure folly for British people to willingly give up that advantage. An assessment of the tremendous financial benefit EU membership provides (and, consequently, tremendous risks of leaving) can be made by examining Britain’s exports and imports.
Being in the Single Market gives British firms access to an extra 450 million consumers beyond their own borders. While Brexiteers are correct that a majority of our exports are to countries outside Europe, still 46% of them go to EU nations. Using this figure, the UK Treasury office estimates that 3.25 million British jobs are “related to EU exports.” It’s easy for economic figures like that to be dismissed airily (though, for some perspective, the Great Recession of 2008–09 saw only 1.3 million job losses), but each one of those jobs represents a man or woman’s livelihood — a livelihood contingent on the current free access we have with the EU. Of course, it would be absurd to suggest that all 3.25 million jobs would disappear overnight after Brexit — after all it’s not like we are going to stop trading with Europe entirely. However, it’s fair to say that whatever our arrangements with the EU end up being post-settlement, they will not be as generous as 100% tariff free access — the EU is going to put some duties on British goods — suggesting that a good deal of those jobs are at risk. Economic forecasts are notoriously tricky and should always be taken as probabilities rather than certainties, but the Bank of England, a non-partisan institution, expects that 75,000 jobs will be lost in the financial services sector alone as a result of Brexit.
The outlook for imports is, if possible, even bleaker. Unlike with exports, a clear majority of our imports do come from within the EU, and membership thereof allows British consumers to buy European products easily, quickly, and at comparatively low prices. All of that is at risk after Brexit. Take fresh fruit, for example: Britain imports huge amounts of it everyday and, due to its perishable nature, the entire supply chain is critically dependent on not having to go through tedious customs checks or stop at border crossings. A grocer can “order in the morning at 8 o’clock” and have the produce “on somebody’s dinner plate” by evening. It’s hard to see how there won’t be disruption to those supply chains once fruit importers have to stop one by one at Calais to fill out reams of paperwork get all of their strawberries meticulously inspected. Then there’s the question of what to do about import taxes. World Trade Organization rules prohibit a country from giving preferential tariff treatment to another country in the absence of an explicit trade agreement — you either apply a tariff to everyone equally on a certain good, or you don’t apply it at all. In other words, once we leave the Single Market, we can’t preserve the status quo of putting tariffs on goods from non-EU countries while maintaining no tariff on goods from the EU. By default, if no action is taken, taxes on imported EU goods will rise to match Britain’s current tariff schedule for non-EU nations. That schedule includes, for example, a 14% duty on televisions and a 24% duty on jams, jellies, and marmalades. Those quite considerable price hikes will be passed directly onto the end customer — that’s you and me. A laissez-faire committed government might elect to go the other route, and instead level the field by dropping all tariffs on non-EU goods. This would address the problem of higher prices but at the risk of flooding Britain with cheap goods from all over the world, which could wipe out local industries. Either way there would be some kind of jolt to the economy, with an outcome that is unlikely to leave all parties — consumers and producers — unscathed. The financial risk is as real as it is wholly unnecessary to incur.
Putting all of these costs, both direct and indirect, together and Brexit looks like a big own goal we would be scoring on ourselves out of spite. Brexiteers love to bemoan the high costs of EU membership, and it’s true that the net £7.8 billion we pay into EU coffers is not nothing. However, on a per capita basis, it’s a mere £2.30 ($3) per week. Economic analysis indicates that leaving the EU without some replacement trade agreement in place would add an extra £12 to the price of the average weekly grocery basket.
It should come as no surprise that nine out of ten economists believe that Brexit will have a deleterious effect on the British economy. Farage of course will gloatingly point out that “economists have been wrong in the past”, which is true, but so has Farage. Who would you rather believe?
What Have The R̶o̶m̶a̶n̶s̶ EU Ever Done For Us?
Is there actually anything inherently wrong with giving up a bit of sovereignty in exchange for making your country safer, more prosperous, and more effective on the world stage? Aren’t those the reasons we wanted sovereignty in the first place? It’s true that many laws originate from Brussels today, but by and large they are laws that the British public have received positively, including, for example, a robust framework for personal data protection, caps on data roaming charges, and strong support for workers rights. The average Brexit supporter will struggle immensely to name a single EU directive that she actually wishes to repeal. For those proposals we genuinely do disagree with, the democratic response would be to rally opposition to them and try to vote them down in the EU Parliament, not throw your hands in the air and declare the whole process illegitimate. If Farage and his gang spent half as much time scrutinizing and assessing legislation (you know, the job they are paid to do as parliamentarians) as they did engaging in childish, theatrical stunts to fire up their base, the British public might not find itself as alienated from EU proceedings as Farage tries to convince us we are. Furthermore, for the really big constitutional changes, such as the accession of a new member into the Union or the proposed establishment of an EU Defence Force (another proposition Farage claims we should all be terrified of), Britain actually gets an outright veto, which means we are quite guarded, legally, against getting swept up in a political project we don’t want a part of.
Whether the British government chooses to exert those checks and balances is a separate matter. The immigration explosion in 2004 serves as an illustrative example. You may think it was a good thing or you may not; but what it certainly wasn’t was a surprise. Poland, for example, submitted its formal request for accession in 1994, a full decade before it officially joined. In the intervening years, other member states made appropriate plans and accommodations in their law to deal with the potential influx of new migrants — Britain did not. Why blame the EU for this oversight, and in doing so let our own incompetent politicians off the hook? By the way, why do we so quickly accept the premise that the surge in immigration was such a regrettable outcome? Economically speaking that’s certainly not the case. Notwithstanding the nativist narrative that immigrants come here to leech on welfare benefits, the fact is that each EU migrant will on average contribute £78,000 to the public treasury over his or her lifetime. Britain has an aging population and it is the arrival of healthy, young migrants that has helped fund Britain’s public services.
Nowhere is our reliance on immigrant labor more apparent than in Britain’s most beloved public institution, the National Health Service (NHS). A full 10% of doctors and 7% of nurses in the NHS come from EU countries, and in some specific hospitals the proportion of EU workers is as high as 30% of total staff. Already stretched to breaking point as is, it is no exaggeration to say that the NHS would suffer a staffing crisis if EU nationals were no longer able to come and work in the UK as easily as they are currently able to do. A healthcare system that is free at the point of use is one of Britain’s greatest 20th century accomplishments. EU migrants have helped keep that accomplishment going as our population ages. Is it really worth jeopardizing the care our sick and elderly desperately need just because Farage “felt awkward” hearing foreign languages on a train?
It’s also worth pointing out that the principle of free movement is a two-way street, and one that 785,000 Britons have taken full advantage of. Many of those are pensioners enjoying a sunny retirement in Spain, but others are students completing a degree in Sweden, or engineers furthering their career in Germany. The ability to study, work, and live in any of 27 different countries completely freely and for as long as you want is an enormous privilege. Ask anyone who has had to deal with the Kafkaesque nightmare of visa applications and they will tell you that free movement is not a political right to be surrendered lightly.
So there you have the case for Remaining in the EU, thinner on vague appeals to patriotism and British identity, but harder on the facts, the figures, and the concrete impact that withdrawing from the EU will have on your day to day life. Whatever happens, the wealthy Brexit vanguard — Nigel Farage, Boris Johnson, Jacob Rees-Mogg — will be fine, but it’s the average working family who will suffer. It is that family’s jobs that will disappear once businesses pick up shop and move to another EU country; it is their weekly grocery shops that will become more expensive; it is their waiting times at the NHS that will skyrocket once EU doctors and nurses are forced to leave because of reinstated work visa requirements. The European Union is a complex and, yes, imperfect political institution. There are costs and benefits to being a member but on balance, most experienced policy makers would tell you that the benefits outweigh the costs. That’s especially true for Britain, which has managed to engineer a pretty great bespoke deal for itself. Leaving means trading that position in for a poorer, more isolated future.
[1] Though some countries — most notably Norway — do pull this off.
