A British exit from the EU would be “deeply harmful” for industry, the boss of one of the UK’s largest manufacturing firms has warned.
Nigel Stein, the chief executive of GKN, which supplies parts to the global car and aerospace industries, said uncertainty over the issue was already having a negative impact on Britain’s ability to compete globally.
“From a GKN perspective the prospect of the UK talking itself into an exit from the EU would be deeply harmful to our industries, where we are part of a European footprint, not a country in isolation,” Stein told the EEF national manufacturing conference in London.
“Competition for investment is intense. And if there is one thing investors hate, it’s uncertainty. Be sure, even now the uncertainty over the UK’s position in Europe is being used against us.”
The business secretary, Vince Cable, and Kenneth Clarke, a minister without portfolio, said Britain’s influence with the US and in the world was dependent on EU membership.
“The EU has clout. The EU has a seat at the table. The EU can do a deal. Britain can still have a leading role in the world, but that role is based on continued membership of the European Union,” said Clarke.
Cable said: “We’re now in a much better economic period. It is absolutely essential that we don’t now create a new level of uncertainty around membership of the European Union.”
Stein highlighted the aerospace and automotive industries as areas where the UK would be at risk of losing investment if it lost its position of influence in European policymaking.
“In aerospace, the UK makes all the wings for Airbus a’ircraft … assembled in the European Union. In automotive, much of the output from the car plants here goes to the EU.
“With less than 2% of the world’s car output and with no British-made large commercial aircraft, we cannot expect much UK influence on standards or policy in either automotive or aerospace.”
Stein also highlighted the skills shortage in UK engineering and said the manufacturing industry, as well as the government, was not doing enough to encourage school or university leavers to join.
He argued the UK needed to look to other countries for opportunities including in China, where planned growth in the automotive sector is “equivalent to adding the whole UK car industry, every year.”
He added: “We saw in automotive the battering our industry took in the 70s, 80s and 90s before fighting back. So watch we don’t let the same happen in aerospace as China, Japan, Korea, Brazil and now the Middle East look to grow their aerospace businesses.”
The founder of the Labour Party Keir Hardie once said of international trade that it meant “the dykes which separate man from man are broken down, and the waters of their common humanity begin to intermix and commingle”. This internationalist idealism, combined with hard-headed national interest, led Clement Attlee’s post-war Labour government to sign the General Agreement on Trade and Tariffs, the forerunner of the World Trade Organisation. In the great depression of the 1930s, it took a Democrat President, Franklin D Roosevelt, to overturn the protectionism of his right-wing Republican predecessor, Herbert Hoover, and help drag the US out of the great depression.
There’s a strong progressive tradition of support for international trade which is worth recalling today when we look at the groundbreaking EU-US trade deal currently being negotiated – the Transatlantic Trade and Investment Partnership (TTIP). This would be the biggest bilateral deal in history because together the EU and US account for 30% of global trade and almost half the world’s output. It’s rightly getting more attention than any previous trade agreement, with critics saying it could put safety standards, public services and national sovereignty at risk.
It’s plain that the UK badly needs this deal. Our economy is still 1.3% smaller than before the global financial crisis, with production 10% less, while economic growth since 2010 has been based too heavily on consumer borrowing and spending, and not enough on exports. Back in 2010, the government said that we needed an ‘export-led recovery’ but last year, the UK bought an eye-watering £30bn more goods than we sold.
However, if we are to build support for an EU-US deal, we must remake the progressive case for trade, and use it to hold negotiators to account. Trade agreements can be acts of transnational co-operation – setting rules and standards that govern the world-wide flow of goods and services, not merely a race to the bottom – and to ensure TTIP meets this aspiration I proposed four tests in the House of Commons this week.
First, any trade deal must deliver on jobs and growth. The most reliable estimates suggest a much-needed boost to UK GDP of £4-10bn a year, thousands of new jobs and wage gains for workers. However, we still have very little idea how the gains are likely to be spread within the UK, or any analysis of how developments in the talks will impact on jobs and growth. If the government want widespread support then they need to put the facts on the table.
Second, negotiations must be transparent and accountable to those they will affect. For the first time, this can’t be a traditional backroom trade deal done by the elites in Brussels and Washington. The European Commission are right to say these are the most transparent trade talks ever but the bar set by previous negotiations is very low indeed. Mistrust is rife and both the European Commission and our own UK government can do more to open up the debate.
Third, any deal must aim for the highest possible consumer, labour and environmental standards. Given that most of the trade barriers between the EU and the US are regulatory barriers, maintaining high standards will be a central test for negotiators. EU Commissioner De Gucht last week said: “No standard in Europe will be lowered because of this trade deal; not on food, environment, social protection or data protection”. It’s up to campaigners and Parliamentarians to hold them to that promise.
Fourth, an EU-US deal must allow sufficient leeway for national governments to act in their national interests. No trade deal must put at risk the vital interest that governments have in legislating for the public benefit. The European Commission’s statement in December that “TTIP should explicitly state that legitimate government public policy decisions cannot be over-ridden…” is welcome, but not enough. Exempting the NHS from any deal, and removing the presumption in favour special protection for multinational investors would speak louder than words about the Commission’s respect for national sovereignty. It would also settle concerns that currently distract from a more balanced debate and risk diverting support for an ambitious deal.
TTIP could be a global economic gamechanger – bringing more jobs, higher wages and setting global standards for a generation. I want to see progressives follow in the footsteps of Hardie, Attlee and Roosevelt by leading the case for trade that is both free and fair.
This article originally appeared in the Huffington Post
New independent research carried out by Centre for Economic and Business Research (Cebr) on behalf of the British Influence ‘Our Biggest Market’ campaign shows that total UK national income dependent on exports to the EU each year has risen since 1997 to £207 billion, representing 15% of British GDP.
The amount is nearly double a £106 billion figure for 1997 when a similar study was last carried out.
Commenting on the outcomes of the research, Peter Wilding, Director of British Influence, the cross-party campaign on Europe, said: “These figures reveal the UK is trading more with the EU than ever. More jobs and more families work in businesses seeking more not less involvement in the EU.”
Adam Nathan, Director of the Our Biggest Market campaign to keep Britain in a reformed single market said: “15% of GDP is a massive amount of money coming into the British economy each year and this study shows that it has been growing consistently. That is why businesses, employees and consumers are joining voices with our campaign to call for Britain stay in and reform the single market for British interests.”
Professor Douglas McWilliams, Executive Chairman of the Centre for Economics and Business Research (Cebr) and Gresham Professor of Commerce, recently described by Will Hutton as an “affable Eurosceptic”, said: “Any referendum on Europe is of critical importance to the UK. Cebr is committed with working with any side of the argument that is prepared to respect our concerns about factual accuracy when reporting Europe.”
Commenting also on a report from Business for Britain also out today claiming that the Lisbon Treaty might cost up £12billion a year for UK businesses, Peter Wilding, said: “Britain is leading the way in Europe in efforts to cut ‘red tape’ laws that can hamper businesses from operating efficiently. But almost 85% of the £12 billion potential costs identified by Business for Britain would come from efforts to reduce CO2 emissions. The UK has often set stricter targets for itself than the EU so we may well have these types of rules regardless of the EU. We must keep our eye on the bigger prize that is the £207 billion a year of trade with have with EU states.”
Online music services and the UK’s thriving creative sector will be able to trade more easily across Europe from today. The agreement is set to benefit a thriving UK industry which accounts for 1.6 million jobs and more than 5% of the UK economy.
The move comes after the Prime Minister’s letter on EU growth signed with 11 other EU leaders in February 2012 called for EU action to simplify licensing and to build an efficient framework for copyright as part of a drive towards the completion of a digital single market by 2015.
The value of UK Creative Industries was £71.4 billion in 2012 and accounted for 5.2% of the UK Economy. The British ‘Creative Industries’ sector accounted for 1.68 million jobs in 2012, 5.6% of the total number of jobs in the UK.
The Collective Rights Management Directive, agreed by the European Council, will simplify the licensing process, saving businesses time and money and making it easier for them to operate right across Europe.
Minister for Intellectual Property, Lord Younger said: “The UK has a world class music sector which supports thousands of jobs across the country. The very fact that we are 1 of only 2 net exporters of music in Europe underlines its importance. This deal should be seen as a positive step taken by the European Commission and I welcome this agreement. By simplifying cross-border licenses we are making sure that we continue to do all we can to support this thriving industry.”
The new rules on creative rights management were agreed by EU industry ministers including Trade and Investment Minister Lord Livingston. Ministers also discussed what the EU needs to do to create an industry-friendly environment in Europe.
The British government is pushing for reform the single market, cutting of red tap and completion of EU trade deals such as the Transatlantic Trade and Investment Partnership (TTIP), worth up to £10billion a year for the UK alone.
EU leaders will next discuss Europe’s industrial policy – which has called for a European Industrial Renaissance – at a summit in Brussels at the end of March 2014.
Speaking at the Atlantic Council in Washington, D.C., today, European Union Trade Commissioner Karel De Gucht called for negotiators to move the EU-US trade talk forward.
“If we want to finish on the now proverbial single tank of gas, our message to our negotiators now is that we need to step up a gear,” said Commissioner De Gucht.
Reviewing two days of stock taking of the Transatlantic Trade and Investment Partnership talks, Commissioner De Gucht said negotiating teams had taken a close look at all the issues on the table, identifying common ground areas and marking out the areas that need more work. “Certainly, the marked-out areas are still larger than the common ground. But we now have a clear picture of the whole field,” he said.
Commissioner De Gucht said an EU-US trade agreement could expand the EU and US economies by almost 300 billion dollars by the time the agreement is in effect. He reminded the audience that reaching a deal would bring the EU and US even closer and “strengthens the position of our shared values on the global stage.”