To stay or to status quo

Britain is a conservative place, they say, so when in doubt the electorate will tend to stick with the status quo.  For the EU Referendum, the assumption has been that the Remain campaign has the advantage.  We’re all too confused by claims and counter-claims about the pros and cons of Brexit, so in the end we’ll settle for what we know.

Recognising this conservative bias, the Leave campaign is trying hard to reshape our definition of the status quo.  Staying in the EU, they claim, is the riskier gamble, because the EU is changing so radically.  The status quo is a free trade zone with cooperation between European states on security, the environment and other supra-national issues.  We can have all that by leaving the EU, they promise.  Leave = Status Quo.  On the other hand, if we vote to stay in the EU we will be subjected to a process of ever greater political integration and ultimately we will find ourselves in a very different (and possibly unpleasant) place.  Remain = Leap into the Dark.

It is a bold campaign that seeks to redefine the status quo, but so far the Outers are doing a good job of it. The response from the Remain campaign should be: “Possibly.  But if the EU status quo really does change that much, we can always vote to leave at a later stage.”  We should be judging whether we want to be part of the EU as it is now, not as it might be in some version of the future.

Britain’s weak negotiating position in Europe

As we draw closer to the UK’s referendum on leaving the EU, the economic arguments for and against Brexit are becoming clearer.  A favourite europhile argument is that half our exports go to the EU, and we mustn’t jeopardise that trade by leaving the single market.  The eurosceptics have a very compelling response, brilliant in its simplicity:

We buy more from the rest of the EU than the EU buys from us (think of all those BMWs and bottles of French wine), so the EU will want to maintain the same free trade relationship with us even if we leave.

This makes complete sense.  It suggests we hold the stronger negotiating position thanks to our EU imports.  It’s an easily understood truth that is regularly deployed by Nigel Farage and other eurosceptics.

But as the Economist points out this week, there is a competing truth to consider:

The EU takes almost half of British exports, whereas Britain takes less than 10% of the EU’s.

Now who has the power?

The first truth refers to the absolute value of our imports and exports; but the more relevant truth, as far as a negotiation is concerned, is the relative importance of those imports and exports to each party.  Bluntly, the EU is an awful lot bigger than the UK, and isn’t going to care nearly so much if trade breaks down.  Of course, it’s in everyone’s interest to maintain free trade, but if other factors complicate EU calculations – such as our general awkwardness – then the EU is much better placed to walk away from the negotiating table than we are.