The whole world is eagerly looking forward to the 23rd of this month when much awaited referendum regarding Britain's (precisely the UK's) membership of the European Union (EU) is supposed to take place. Speculations are being made across the world over the implications for Britain on its exit from the union. What would happen to Britain if its voters choose to leave the EU? How would its changed relations with the EU be like? How differently would Britain be treated as a non-EU member state that has smaller economy, manpower and consumer market than that of the EU as a whole? Would Britain follow the examples of Switzerland and Norway, and join the European Free Trade Association (EFTA)?
EU: World's largest economy
After the Second World War, Europe became very vulnerable in every aspect, especially in terms of economy. Therefore, the region, which holds massive energy resources, required integration, cooperation and collaboration in order to ensure peace in Europe - not just to avoid wars among the European neighbours, but also to shield the individual European countries from the expansionism of the former Soviet Union. Also, unhindered economic progress was one of the major reasons, no doubt, for the formation of the EU.
Conventionally, it is known that the US, China and Japan are the three largest economies in the world. However, taking the EU into consideration as a 'single economic entity', it seems that it is the EU that overshadows others and appears to be the largest economy in the world. It is the world's largest exporter of manufactured goods and services, and is itself the biggest export market for a good number of countries. The EU is the world's largest trading bloc. It is one of the world's leading trading partners besides the US and China. Moreover, trade within the EU (among member states) accounts for more than one-third of the world-total. It is a big consumer market of around 500 million people.
Implications for Britain
What would happen to Britain if its voters choose to leave the EU? Would Britain follow the examples of Switzerland and Norway, which being the member states of the European Free Trade Association (EFTA) enjoy prosperity and success without having the EU membership?
In order to enjoy the privileges of 'free trade' with the EU, the EFTA member states are required to (i) adopt all EU legislations in relevant areas and (ii) contribute to the EU budget proportionate to their national economies. Yet, these member states do not have the access to the EU's decision-making institutions. Therefore, joining the EFTA after leaving the EU would only lead Britain (precisely the UK) to adopt the same EU legislations afresh and contribute to the EU budget without having any voice in the greater policies of the EU.
On the other hand, Britain's future seems moderately good within the EU umbrella. The trades within the EU run on the basis of a free trade agreement. Such a free trade agreement gives each EU member state, including Britain, the opportunity to trade with other member states without many of the charges, taxes, custom duties, etc. that the other non-EU states have to pay.
Moreover, almost 50 per cent of Britain's trade is with the EU. With the exit from the EU, Britain would lose the opportunity of free access to the EU market, with which Britain shares its vast majority of trading.
Many international businesses that are situated in Britain have chosen Britain because it gives access to the whole EU market without any trade barrier. Once Britain leaves the EU, these international businesses would not be able to enjoy such trade-barrier-free access to the EU market, and hence, they would be left with no option but to move into another European state that happens to be an existing member of the EU.
Leaving the EU may well be expensive for Britain as it may push the US to reduce many trade opportunities that the US has been offering Britain as an EU member. Moreover, the US wants a strong and unified EU for countering the Easterners. Against the giant economies and the big countries within the BRICS bloc, the US is standing alone as the only giant Western economic power with a vast landmass. The US surely needs along its side another westerner, which has a giant economy along with a vast landmass. Hence, shaping up a strong EU that is pro-US goes in the interests of the US The point here is that the US is the second largest single market for Britain, and thereby, leaving the EU might prove disastrous as such a move may disappoint the US, which has already suggested officially that Britain has a better future within the EU, not outside.
l A strong EU is being built with a Parliament, bureaucrats, a European flag, a Central Bank, a Monetary Institute, a common currency titled 'Euro', courts like the European Court of Justice and the European Court of Human Rights and, most importantly, a common foreign and security policy (CFSP). These all are indicators of a state building effort by the EU. Perhaps, the idea of the formation of the EU was the creation of a single united political entity like the United States of America by turning the member states into federations at some point and turning the EU into a single country.
l While Britain may well be advised to remain within the EU, Britain is better off within an EU that is an economic union - not a political one. A political integration would erase the sovereignty of member states, including Britain itself.
l Britain is seen as the EU member state that balances out the power equation within the EU. Britain's exit from the EU would substantially reduce the British influence within the bloc. Such loss of British influence would only strengthen the position of France and Germany within the EU, removing the obstacles to the shaping up of such an EU that would become a 'true' 'political' entity modelled to the 'advantage' of Franco-German duo.
l Separately no single European state, including Britain, can counter (especially in terms of economy) the US, China and Russia in global stage. However, if Britain remains united with other European states under the EU, there is every possibility that Britain would be a vital voice inside the EU, and the EU itself would be an economic power having its voice heard in the global stage.r
Bahauddin Foizee is a Research Associate at Bangladesh Institute of Legal Development (BiLD) and Associate Lawyer with Azad & Company. He Teaches law at DCLE (a centre of University of London)