June 1, 2016 I By: RISHI SUNAK
n July 2011, to the clink of Belgian beer glasses, the European Commission toasted a momentous day. 54 years after its founding members gave up the power to negotiate their own trade deals, the EU’s Free Trade Agreement (FTA) with South Korea had come into force; its first ever trade deal with a major developed economy.
The fact that South Korea’s economy is only half the size of Britain’s, that it had taken the EU five years longer to sign the deal than Switzerland, and that – after half a century – the EU still does not have a free trade deal in place with a single top 10 economy was, no doubt, sensibly ignored.
As pundits begin to talk sagely about the Remain campaign having “won the economic argument”, it’s worth taking a moment to remember just how dismal the EU’s record of international trade has been.
I’m the son of Indian immigrants and spent my business career working abroad, investing in companies from Silicon Valley to Bangalore. It’s an experience that for me crystallised what EU’s own figures predict: a decade from now, 90 per cent of global demand will be generated from outside Europe.
The scales of the global economy are tipping eastward and, as they do so, the EU’s trade failings are taking an increasingly heavy toll on the UK. The reason for that is this is that Europe’s major economies are primarily focused on the European market. Britain, meanwhile – the only major EU economy that exports more outside the EU than within it – is traditionally far more outward looking, with EU exports accounting for just 13 per cent of our GDP and falling.
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