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Civitas - The Single Market has benefited non-members more than Britain and other founding signatories

Export growth to the EU has been strongest among non-EU countries since the foundation of the Single Market.

UK exports to the EU have grown more slowly than those of the rest of the Single Market’s founding members.

Britain’s export growth to the rest of the Single Market has slowed by about a fifth compared with its performance during the Common Market.

UK exports to other EU nations have grown more slowly since the start of the Single Market than those of the rest of its founding members – and have been especially outstripped by exports from non-EU nations.

A new Civitas analysis lays bare the paradox of the European Single Market in that it has boosted the exports of countries outside the trade bloc more than its members, particularly Britain’s.

The UK’s exports have benefited least of all from the Single Market created in 1992, declining from the rate of growth they had been on already as part of the Common Market (since 1973).

The intra-EU exports of all 12 founding members was 14.6% lower, while the exports of non-member OECD countries to the EU were just 2.05% lower.

‘In terms of the growth of exports of goods, non-member countries have been its main beneficiaries,’ Burrage writes in Myth and Paradox of the Single Market: How the trade benefits of EU membership have been mis-sold.

‘The 20 years of the Single Market do not seem to have been particularly successful in terms of the growth of member countries’ exports to each other. Far from there being a detectable surge after the inauguration, or a faster rate of growth, they have failed to keep pace with growth over the Common Market years.’

In his analysis of official trade statistics, Burrage shows how the growth of exports between member states over the Common Market years was 4.7% and then fell during the Single Market years to 3.0%.

Over the same period the UK’s export growth to other single market members showed an even more marked fall from 5.38 per cent to 3.09 per cent.

‘While the Single Market cannot be counted a success in export terms for the EU as a whole, for the UK it must be counted at the very least a massive disappointment, and not far short of a disaster. There has been no discernible benefit for UK exports to fellow members from the Single Market programme.’

Burrage provides a unique comparison of exports growth between the Common Market and Single Market years by extending the exponential trendlines from the years 1973-1992 through the years 1993-2012. When these exponential trendlines are compared with the real rate of the growth of exports over these same two decades of the Single Market, they show that:

  • UK exports growth during the Single Market years was 22.3% lower than it would have been had it continued at its rate during the Common Market;
  • The exports of all 12 founder members of the Single Market to each other have been 14.6 per cent lower than if they had continued to grow as they had done under the Common Market;
  • Exports of non-member OECD countries to the EU were just 2.05% lower.

Burrage writes that: ‘Supposedly disadvantaged non-members have, in other words, come closer to keeping pace with their export performance under the Common Market than the members of the Single Market exporting to each other, and very much closer than the UK, despite not having been sitting round the table and helping to make the rules.

‘This is counter-intuitive, and profoundly paradoxical. It flies in the face of the claims about the advantages of the Single Market for UK trade that have been made over many years by Britain’s political leaders.

‘Overall, as they stand, these figures offer little support to the argument that membership of the Single Market is essential if the UK is to maintain or increase the rate of growth of its exports to the Single Market.’

Notes

Michael Burrage is a sociologist by training, was a Fulbright scholar at the University of Pennsylvania, and lectured at the London School of Economics for many years, specialising in cross-national analysis of industrial enterprise and professional institutions. He has spent spells as a research fellow at Harvard, at the Swedish Collegium of Advanced Study, Uppsala, at the Free University of Berlin and at the Center for Higher Education Studies and the Institute of Government of the University of California Berkeley. He has been British Council lecturer at the University of Pernambuco, Recife, Brazil, and also a visiting professor at Kyoto, Hokkaido, Kansai and Hosei universities in Japan.

His previous Civitas publications include Where’s the Insider Advantage? A review of the evidence that withdrawal from the EU would not harm the UK’s exports or foreign investment in the UK (2014).

The Myth and Paradox of the Single Market: How the trade benefits of EU membership have been mis-sold

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