July 12, 2017    7 minute read

An ‘Outward-Looking Out’: How Brexit Can Be Used to Help the World’s Poor

Open Arms    July 12, 2017    7 minute read

An ‘Outward-Looking Out’: How Brexit Can Be Used to Help the World’s Poor

  • The Brexit campaign became a debate between a liberal-minded ‘in’ campaign versus a nationalistic ‘out’ campaign – with this now translating into a ‘liberal’ case for staying in the Single Market against a nationalistic case for leaving the single market.
  • This dichotomy ignores an important third option: a liberal case for leaving the single market that would be both economically and morally compelling.
  • Membership of the single market has shown all the good a liberal economic system can do, with evidence showing that this system has made us wealthier whilst vastly lowering instances of conflict.
  • However, the EU has been purposefully exclusive to protect their own domestic markets – something that greatly hurts the developing Third World.
  • Therefore, Brexit is an opportunity to extend all of the benefits of the EU to those who need it most, which would lower prices domestically whilst simultaneously developing the Third World.

During the Brexit campaign, the British public was seemingly presented with a stark choice. The Remain side defended freedom of movement, commitment to free trade within the single market, and a European identity. Conversely, the Leave side promised that exiting the EU would cut immigration, prioritise national workers, and restate national sovereignty.

Sovereignty vs The Economy

It is no surprise, therefore, that in a poll investigating voter motivations it was ‘independence’ that scored number one for Leavers, whilst ‘the economy’ came first for Remainers (https://lordashcroftpolls.com/2016/06/how-the-united-kingdom-voted-and-why/). The fault-lines had been constructed through the discourses provided, with voters choosing accordingly to their own perceived priorities.

Fast forward to the present, and nothing much has changed. Seemingly liberal, ‘Soft Brexiteers’ defend membership of the single market, whilst nationalistic ‘Clean Brexiteers’ highlight the importance of leaving the single market to cut immigration. Liberal discourses gravitate towards the ‘soft’ option whilst nationalistic discourses tend toward the ‘hard’ option.

Now, as a result, voters who wish the UK to remain an outward looking, compassionate, and liberal nation wish for us to remain in the single market – which is understandable.

However, this starkness between an inward-looking ‘out’ and an outward-looking ‘in’ ignore a very important third option: an outward-looking ‘out’ (or, in other words, a liberal case for a Clean Brexit.) An ‘out’ that is not only economically sensible for our domestic economy, but one that can genuinely help the World’s poor – something that the EU has quite frankly held us back from for some time.

Single Market Membership

Defenders of Britain remaining a member of the Single Market argue two things: firstly, that the free movement of goods, services and people within the EU creates prosperity and social cohesion by supplying flexible labour markets and tariff-free access to over 300m consumers; secondly, they argue that membership enshrines cooperation and peace between Western nations through economic and social interdependence. If we look at the evidence, they would be right.

In 1979, the average GDP per capita for the European Union (as it was then) was $20,000 pa. In 2016, the average GDP per capita reached $35,000. In short, evidence supports that membership of the EU (and the single market in particular) has made Europeans more wealthy in the long term. (https://tradingeconomics.com/european-union/gdp-per-capita-ppp)

Similarly, if we also look at the data surrounding conflict and wars in Europe before and after the establishment of the European Union, it stacks up with their claims. In the period in Europe between 1500 and 1950, there averaged around 400 wars and conflicts every 50 years, with any one of the ‘Great Powers’ (Britain, France, Germany, Spain etc.) being at war around 60% of the time.

However, between 1950 to the year 2000 (post-EU creation), there were only 74 instances of conflict, none of which were between the ‘Great Powers’ (https://ourworldindata.org/war-and-peace/). Therefore, it is evident that membership of the EU (and the complex interdependence that the Single Market creates) does allow nations to become more prosperous, and gives them the material foundation for peace.

Free Movement and Trade

The virtues of free movement and free trade are abundantly clear, with the evidence suggesting that they make nations more wealthy and more peaceful. So, why is this exclusive for the European Union? Should Britain, and the rest of the EU for that matter, not wish to extend this hand to developing countries? Or are the ‘three freedoms’ of capital, movement, and goods and services really only reserved for Europe? The answer is a disappointing one.

Unfortunately, the EU has constructed the Single Market purposefully to exclude countries outside of Europe, as to keep European industry artificially more competitive and to protect European employment that otherwise would have been lost (at the expense of developing countries).

The best example of this ‘liberalism for Europe, nationalism for the rest’ approach is the EU’s use of both the Common External Tariff (CET) and the Common Agricultural Policy to artificially exclude Third World agricultural producers from European markets.

The CET is a tariff that is applied to any good that is imported from outside the EU, and for agricultural goods, these tariffs usually average at around 18% (www.reformthecap.eu/issues/policy-instruments/tariffs).

Not only does this help exclude goods from outside the European Union that may be cheaper or a better quality for consumers at home, it also hurts developing nations which, on average, rely on agricultural exports due to their lack of export diversification (https://unctad.org/en/PublicationsLibrary/ditctab2014d2_en.pdf). The CET, in the first instance, is profoundly regressive, privileging wealthy, non-competitive European producers over poorer (and more competitive) non-EU producers.

Common Agricultural Policy

This problem is exacerbated by the EU’s implementation of the CAP. The Common Agricultural Policy is a scheme whereby the EU subsidises European producers of agricultural goods to keep them artificially more competitive in world markets – effectively maintaining domestic industries that cannot stand on their own.

The CAP accounted for 31% of the total EU budget in 2010 (https://publications.europa.eu/en/publication-detail/-/publication/c8206979-cc09-4bd4-9bb6-278f7733d5e9), equating to billions of pounds spent on excluding those outside the EU to trade in our internal market.

The humanitarian impacts of these policies are not justifiable, and simply come down to a ‘Europe First’ mentality. Those who say we must remain in the Single Market to remain open, liberal, and compassionate are speaking only in regards to the rest of Europe. There is no reason why somebody from Poland, or France, or Portugal should experience the protection and benefits of a liberal economic system, whilst those from Ghana, Indonesia or Argentina should not.

Conclusion

Therefore, Brexit is an opportunity for us to leave the single market and extend our hand in trade and cooperation with nations who, quite honestly, need our help more than the European countries. Additionally, the more competitive nature of agricultural output from developing countries would also bring down prices for domestic consumers, making us all wealthier here in Britain.

Finally, the conversation must move away from whether Britain should become a self-prioritising nation outside of the Single Market or an open nation within the single market. A liberal ‘out’ could extend all of the benefits we have long enjoyed within the EU to people in the world who have not yet been given the chance.

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