Gerald Warner: Brave new world beckons in exile from EU Eldorado

SUDDENLY, the Rotterdam Effect is academic. The latest figures show that, for the first time since Britain’s trade became subject to the Common External Tariff in the 1970s, the EU accounts for less than half of UK exports – 49.6 per cent, to be precise. Of course, this statistic in itself is of purely totemic significance. The difference between 49.6 per cent of exports and, say, 50.2 per cent is largely psychological. Any region that is a market for almost half our exports, one can already hear the ­Europhiles sanctimoniously intone, is ­important to us.

The flaw in that claim is that the 49.6 per cent figure, embarrassing as it is for EU propagandists, is just as bogus as all the previous statistics that pretended our exports to Europe exceeded 50 per cent. This imposture was maintained through the EU scam known as the Rotterdam (or, sometimes, the Antwerp) Effect, whereby British goods transhipped at Dutch or ­Belgian ports were recorded as exports to Europe even if their ultimate destination was Antarctica. That is as honest as suggesting that a rail consignment of Cornish pasties (sorry, Prime Minister) transferred at Plymouth on to a mainline train for London makes Plymouth the main market for Cornwall’s celebrated product.

The Rotterdam/Antwerp Effect has been calculated as exaggerating Britain’s EU exports by more than £10bn annually, not in itself a large proportion of total ­exports; but a more serious distortion probably arises from computing exports exclusively in terms of goods while excluding those in the form of services earning income for the UK in non-EU regions of the world. The greatest mischief that has been done to our trade, after our historical break with the Old Commonwealth members such as New Zealand a generation ago, was the relentless brainwashing of business by governments and other agencies into focusing on the European Union as the Eldorado of the future, to the prejudice of much more promising markets elsewhere. Like the single currency, it was an instance of politics driving economics, to the detriment of prosperity.

Recently and belatedly British business has recognised the futility of that course and has struck out more constructively. While, year-on-year, our exports to Europe have declined by 7.3 per cent, those to the rest of the world are up 13.2 per cent – in the case of China up by 26.3 per cent. The slump in Europe is a natural consequence of the still worsening Eurozone crisis, as shown by the sharp falls in exports to Spain (9.2 per cent) and Italy (19.8 per cent). Countries that are bankrupt cannot be large-scale consumers; since the euro crisis has no end in sight and the aftermath of the currency’s eventual meltdown will be even harsher, we cannot realistically look for a market of any significance on the continent for the next decade. It is not a realistic proposition to sell consumer goods in a poorhouse.

The Centre for Economics and Business Research (CEBR) predicts UK exports will increase over the next five years by 30 per cent to Asia, more than 40 per cent to Latin America and at least 60 per cent to Africa. So, how is our leadership, our re-launched Coalition Government, responding to these dramatically changing realities? Last week, with the impeccable sense of timing that has made him the politician he is, Dave pledged never to campaign for an “out” vote in a referendum, citing – yes, you’ve guessed – this country’s vital trade links with the EU: “Britain’s interest – trading a vast share of our GDP – is to be in those markets. Not just buying, selling, investing, receiving investment but also helping to write the rules.”

When did Britain last write so much as a semi-colon of the rules? The United Kingdom’s serial experience of European summits and treaty signings has been of our delegation, surrounded by a hanging jury of European integrationists, struggling to secure a grudging opt-out from oppressive paper-clip regulations. Now that Dave has obligingly told the Brussels enforcers that in no circumstances would he support a British withdrawal from the Evil Empire, what cards would he hold during any negotiations? None whatsoever. His interlocutors would be listening through their headphones not to him but to their favourite girl band.

“If you don’t give me what I want, Britain will remain as it is, a net contributor to the EU with ever-diminishing control over domestic laws” is not a threat calculated to chill the blood of Eurocrats. This sell-out makes any improvement in Britain’s EU settlement impossible – under this prime minister (the important caveat). Neither Dave nor the EU is, in the current argot, fit for purpose. It is time to be quit of both and to develop our trade, ­unshackled by Brussels regulations, with the real world. «