A lot of talk has taken place around Brexit negotiations and the United Kingdom’s future with the European Union. Parliament have been debating different crucial points on the matter, such as the nature of Britain’s withdrawal after signalling Article 50, the question of an arguably unconstitutional second referendum and the possibility of extending the withdrawal date. With the Prime Minister carrying what seems to be a mountain of pressure on her shoulders, PM May has seen two deals voted out of Parliament. The withdrawal date is fast approaching and no real progress has been made in bringing about a resolution to Brexit. It is about time to discuss a European Free Trade Deal (EFTD).
Regional integration has come under attack by the overpowering push in favour of Euro-skepticism. With the leave campaign winning the 2016 referendum, democratic legitimacy is given to those who voted to exit the EU. Democracy itself could be challenged after this result and others, i.e. the latest US Presidential Elections. It is significant to note, however, that the consequences of leaving the EU could be tragic for both the UK and the EU. For that reason, a lowest level of integration needs to be established while still honoring the contested referendum.
The first point in favour of a European Free Trade Deal is that of the economic potential of such a deal. Free trade represents a major part of British and world history. With thinkers like Adam Smith and David Ricardo shaping perceptions on the topic of unrestricted trade, a lot has been made on practicing liberal trade policies on a bigger, even global, stage. Ever since the repeal of the Corn Laws in 1846, Britain has undergone policies of pursuing free trade. With specialization trumping generalization due to the rationale of comparative advantage, states benefit from high-quality goods they produce as well as the ones produced by their trade partners.
Moreover, free trade has been argued to promote peace on a global level. President Woodrow Wilson, John Stuart Mill and Henry Ford have all made the case for peace stemming from mutually-favourable trade policies. Woodrow Wilson included liberalization in his famed 14 points campaign. The logic behind the relationship with trade and peace is evident in the sense that it supports good relations between states. If peace is good, then free trade cannot be bad.
Free trade is also unlike mercantilist/protectionist trade policies, as it involves a positive-sum game, as opposed to a zero-sum one, and cleaner economic principles, in the place of the self-interested scheme of protectionist-led economic performance. The economic potential of free trade is greater as exports are allowed to flourish while imports can prove beneficial in the absence of identical products and services. Free trade allows for greater exports. The preoccupation with a positive trade balance in Mercantilism is not sustainable, self-evidently. With every state exporting their goods, who is importing?
The second major point is less instrumental and attributes a more inherent valuation regarding the prospect of European Free Trade: that of shared identities. Europe is one continent and many Europeans share racial, political economic and cultural attributes. For that reason, there should be the lowest level of integration which cannot be left unmet. Europeans practice many of the same ideals and many Europeans are in favour of liberal policies. In fact, liberalism has become such a big force in Europe that it has created another layer of commonalities on an ideological level. The Conservative Party, for example, have become more liberal with the growth of liberal conservatism. With an ease to doing business across the continent, it makes sense that Europeans countries trade freely with each other.
On the other hand, it can be argued that regional free trade deals are not fair, as they oppose global free trade. With issues such as the Common Agricultural Policy (CAP) coming to the fore in the Doha Development Round, people from less developed countries (LDCs) have argued that agricultural subsidies in the EU have made their products less competitive. Developed countries, like the United States, will also benefit from a more global trade orientation in Europe since that will help their cause. Fair trade is not in opposition to regionalism, though, especially considering that European business owners generally pay reasonable minimum wages and create good working conditions for their employees. Regionalism can be synonymous with fair trade, and the main issue with unfair trade is to due with poor business practices, such as extremely low-wages, forced Labour and harsh work conditions.
Finally, regional free trade is good for another reason: geographically. With less transport distances, free trade in a region makes sense economically and environmentally due to geography proximity. Economically, low transport costs make for bigger profits. In environmental terms, shorter travel for traders means less resource usage that results in greater environmental perseveration of finite resources and less scarcity-related issues regarding renewable resources. Geographic benefits are enough of a justification for why greater regional trade should occur.
Britain and the EU would benefit greatly from a free trade deal. Economically, specialization makes for better quality products for trading countries to consume. Freer trade is also, arguably, synonymous with peace. Lastly, geographic benefits exist to substantiate the claim that free trade provides economic and environmental benefits to those who engage with it. With all that has been said and done, it is left to the relevant states’ people to judge the merits of this idea and steer their respective countries, and their region, out of the testy waters surrounding Brexit.
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