The Brexit debate: a historical context

THE current debate on Brexit appears to be completely devoid of any historical context on where the single market came from.

During the the late 1980s and early 90s the major issue were the so called “Costs of Non Europe”. Tariff barriers had disappeared on trade between member states during the 1960s.

The problem was that as fast as they disappeared they were replaced by Non Tariff Barriers. States did this of course in an attempt to protect their domestic industries. These barriers were often worse than tariffs as they went beyond merely raising prices, often having the effect of stopping trade altogether. These restrictions were collectively known as the Costs of Non Europe and were measured in some detail in the Cecchini Report.

As these barriers disappeared they transformed the economic landscape by creating the Single Market.

Wales in particular was successful in attracting Foreign Direct Investment as a base for supplying European markets.

International supply chains developed across Europe particularly in the automative and aerospace sectors so important to Wales.

The UK economy thrived in this new environment, becoming the fifth largest in the world.

All this of course is extremely relevant to the current Brexit debate.

The tragedy of Brexit is that the benefits of the Single Market were not apparent to those communities that were “left behind”, in Wales of course in the former coal mining communities in which I was born and brought up. The EU was not to blame in this, though it ultimately took the heat in the referendum.

The blame lay in domestic policies both in Westminster and Cardiff Bay. Getting this complex message across was difficult when the simplistic slogan of £350m extra for the NHS appeared on the side of a bus and nonsense about straight bananas was peddled.

Pointing out the help from coming from Brussels in such initiatives as RECHAR, Objective 2 and Objective 1 was lost in the xenophobic noise.

As we leave the Single Market and the Customs Union economic reality, not fantasy, will bite.

A free trade agreement can lead to tariff free trade in goods. However without mutual recognition of technical standards etc, frictionless trade becomes impossible as borders have to be policed, a costly and very time consuming business.

What about our ability though to

forge new trade deals as we leave? As we leave we may lose trade deals that have been negotiated through the EU. So called “Grand Fathering” these deals so we still hold them after Brexit is by no means certain. Financial services will be a massive issue as so much of tax revenue comes from this source.

In this sector tariffs are basically irrelevant its all about regulatory alignment.

When May said Brexit will make life “different”, I think she meant “difficult”.

We are about to become poorer. No amount of wishful thinking can alter this.

Going back to a past before the EU is simply not possible, it simply doesn’t exist anymore. Dr Robert Morgan Efail Isaf