Another recent letter in The Telegraph (the newspaper of choice if you're slightly batty) has a reader telling we remainers that staying in the customs union would relegate us to the sidelines of a massive global trade expansion. A Mr McKay cites a report by McKinsey Global Institute from 2013.
SIR – I wonder if those arguing for Britain to remain in the customs union after Brexit have read the McKinsey Global Institute report. This predicts that, by 2025, 229 Fortune 500 companies will be based in markets outside Europe – an increase from only 23 in 1980.
Given that, in the last 40 years, the EU has not been able to conclude free-trade agreements with most of the major players in emerging markets, it is vital that Britain is in a position to negotiate directly with non-EU countries. The constraints of the customs union would relegate us to the sidelines of massive global trade expansion in the developing world.
Barrie McKay
South Cerney, Gloucestershire
The MGI report is HERE. It's true (or almost true) that the report forecasts over 229 companies in the Fortune 500 will be based in markets outside Europe by 2025 (table on page 13) but does this really mean we have to leave the customs union? Will some of these new mega businesses want to trade with Europe? I assume so. And will they regard a country outside the customs union as a gateway in to the EU? I doubt it.
And Mr Mckay's conclusion that we have to leave the customs union is his own interpretation. Nowhere do McKinsey suggest countries in the EU should break up the customs union in order to take advantage of new opportunities in emerging markets. To do so would be insanity.
As for being relegated to the sidelines of global trade expansion if we remain in the customs union, HERE are the 2017 export numbers for counties inside the EU now:
Germany $1.341 Trillion
France $488.9 Billion
Italy $461.5 Billion
Holland $444.9 Billion
UK $411.5 Billion
Belgium $398 Billion
Bear in mind Holland has 17 million people (about a quarter of the UK) and Belgium 11 million (about a sixth of the UK).
If we could achieve half of what Germany manages, or half of what Holland and Belgium manage per head of population we would boost our share of global trade by about 50%. What is it about the EU customs union that prevents us doing this NOW. The answer? Nothing. It's a complete red herring. It's the Brexiteers excuse for our lack of productivity and innovation.
