Saturday, 13 January 2018

The UK Single Market

The SNP believe that the UK leaving the EU will damage EU/UK trade - this argument has merit.

The SNP argue this means the case for Scotland leaving the UK is strengthened - this argument is ridiculous.

Any argument that Scotland should leave the UK because of trade friction created by Brexit is so obviously flawed it's hard to explain why without sounding condescending - so bear with me;
  1. Scotland exports four times as much to the rest of the UK (rUK) than we do to the rest of the EU (rEU). The information that tells us this comes directly from the Scottish Government themselves (and has nothing to do with which ports goods leave the UK from, because the data is based on customer location)
  2. To argue Scotland should leave the UK because of EU/UK trade friction is to argue that Scotland would be better off in the EU because then we could continue to trade freely with the EU, would avoid the downside of post-Brexit trade friction
  3. But if Scotland chooses to be on the EU side of an EU/UK trade border, we would see that same trade friction impacting our trade with the UK. EU countries don't get to negotiate their own bilateral trade agreements.
  4. So we're choosing between trade friction with the EU if we stay in the UK or with rUK if we leave. The fact that our exports to the latter are four times greater than those to the former makes it obvious that, if we have to choose which side of a post-Brexit EU/UK trade border to be on, the economic argument for staying on the UK side is compelling
So how do the SNP deal with the glaring logical inconsistency in their argument? With the now wearyingly familiar mix of misdirection, obfuscation, deceit and denial.

The flaw in the SNP's logic is most easily explained by describing Scotland's choice as being between the "UK Single Market" or the "EU single Market".

That the UK Single Market exists is self-evident. We have free movement of goods, services, capital and people, we have common customs and excise duties and we have a single currency. But some within the SNP simply try to deny its very existence (SNP MSP Joan McAlpine claims UK single market ‘doesn’t exist’).

They are hampered by the fact that, in the context of Brexit, the "UK Single Market" concept is easy to grasp and widely referred to;
  • The Scottish Governments own Nobel Laureat-laden Fiscal Commission Working Group referred to the fact that "retaining a common currency would promote the single market ..."
  • In The implications of EU withdrawal for the devolution settlement (Scottish Government commissioned, foreword by Joan McAlpine SNP MSP) the author states "Withdrawal could, however, call into question the UK single market ..".
  • The House of Lords European Union Committee records the term "UK Single Market" being used by a variety of contributors and adopt it themselves - for example the term appears 10 times in this report
  • In "Brexit and the Territorial Constitution" Professor Risk Rawlings (a staunch proponent of further devolution) uses the phrase "UK Single Market" no less than 7 times
I could go on, but the next nationalist argument becomes that the UK Single Market can't exist because there's no Single Market Treaty. People who argue that are not familiar with the 1707 Act of Union which explicitly provides for;
"full Freedom and Intercourse of Trade and Navigation [..] the same Customs and Duties on Import and Export [..] Laws concerning Regulation of Trade, Customs and such Excises to which Scotland is by virtue of this Treaty to be lyable be the same [..] the Coin shall be of the same standard and value throughout the United Kingdom"
Those words may be arcane, but they do a pretty good job of defining free trade, free movement, a customs union and a single currency.

At which point nationalist keyboard warriors accuse those referring to a 300 year-old treaty as "living in the past" - neglecting the fact that the provisions quoted above have never been repealed, so represent current legislation.

Next comes "well why didn't you use the term UK Single Market during the indyref?". The answer is, rather obviously, that the UK Single Market only becomes something one needs to distinguish from the EU Single Market as a result of the Leave vote.

Then we get the echo of UKIP's straw-men of "are you saying all trade will stop?" or "but we'll still want to trade with each other!". Needless to say, nobody's arguing trade will simply stop or there there will be a lack of desire to trade - what we're talking about is damage to Scottish/UK trade for the very same reasons that the SNP argue UK/EU trade will be damaged.

The SNP like to distract by quoting figures highlighting the number of Scottish jobs that are supported by EU trade. What they conveniently neglect to mention is that (using comparable assumptions) more than four times as many jobs depend on rUK trade.

Finally (for now) the SNP then resort to simply trying to hide the scale of Scotland's trade with rUK by ignoring it. Hard to believe I know, but in press releases (as detailed here) and published papers (as detailed here) they claim that 43% of Scotland's exports go to the EU, a figure they arrive at by ignoring rUK exports. The correct figure (from the Scottish Government themselves) is that 16% of Scottish exports go to the EU, compared to 63% going to rUK.

I'm happy to keep having this argument though. The more those arguing for independence argue that the UK single market doesn't exist, the more they draw attention to the fact that it does ... and the more they help publicise and expose the flaws in their latest argument for breaking up the UK.


Alastair McIntyre said...

I still don't see any real discussion on The Commonwealth which will become the largest trading block in the world.

Surely Scotland inside the UK will have a great future by doing more business with The Commonwealth countries?

The heads of Government meeting of The Commonwealth is in London this year. Many of those countries are keen to do Free Trade Deals with us and currently that includes Scotland. The Commonwealth is where most of the growth will come from in the years ahead. Like India is forecast this year to overtake the UK to become the 5th largest trading nation and according to the World Bank web site be the 2nd largest trading nation after China and pushing the USA to third place by at least 2050.

Frankly Scottish Independence is a minor matter in what is a declining Europe. The Named Persons Scheme of the SNP was rejected because of EU laws which demonstrates that being Independent doesn't mean you can do what you want. Scotland would still be governed by WTO terms as well.

The UK's soft power is enormous in the world and despite being in the EU and thanks to the Royal Family we've still retained good ties with The Commonwealth.

In history Scotland and Scots did very well indeed from the Union and many Scots led the old Empire overseas. Canada, Australia, New Zealand and South Africa benefited by having the Scots Diaspora. And of course India also benefited enormously by having Scots help build their infrastructure and civil service.

Many countries in The Commonwealth still retain The Queen as their Monarch and hence the reason so many of the Royal Family still visit The Commonwealth countries today. Learn more about some of the Scots that made a difference in the world at:

Anonymous said...

And of course India also benefited enormously by having Scots help build their infrastructure and civil service.

I think, on the whole, the Indians would have preferred the Scots and the other British to have stayed away, don't you?

John Stuart Wilson said...

The Scottish separatists like facile soundbites, and so they say that it is in the rUK's best interests for that cross-border trade to continue as before, and so therefore it will.
But of course it cannot if Scotland is in the EU and the rUK is not, because of course the EU doesn't allow for a la carte deals.
I am aware that Eire is working a special deal for the border with NI. But the economy of England + Wales is 80X larger than the economy of NI. A one-off deal involving NI, if it happens, is not a precedent.
I'm sure most people have no problem understanding that if Portugal and Spain were to withdraw from the EU, it is highly unlikely that the EU would permit France to leave its southern border open.
Well, the economy of England + Wales is 60% larger than that of Portugal + Spain, so it is even less likely that they would approve our request to have our cake and eat it, too.
So there will be massive friction created - not by the perfidious English, but by us, as the price of admission to the EU.