Leave: The UK Should Forge Its Own Path

In this two part series for the CSBR Zero-Sum blog, senior writers Lloyd Lyall and Jason Xiao go head-to-head over the Brexit debate. This week they tackle the constructive arguments for their position; next week, they will have an opportunity to respond to each other’s claims.

The argument for the UK to continue participating in the EU is premised on two facts: first, that free trade is only accessible by participating in the EU, and second, that the benefits of free trade outweigh the other problematic conditions associated with the EU. While these arguments seem compelling at first glance, the UK staying in the EU will forego other opportunities which may provide the benefits of free trade without the massive regulatory and economic costs that are imposed by the EU.

First, participation in the EU is not a prerequisite for the UK maintaining free trade. The leader of UKIP, Nigel Farage, would like to see the UK and EU reach a similar agreement to what Norway currently holds with the EU. Such a deal would enable the UK to gain access to the EU’s single market without the burden of abiding by EU regulations about agriculture, justice, and home affairs. The negative effects of these different regulations will be expounded upon briefly, but it is clear that accessing the benefits of the EU without its drawbacks is clearly better.

In addition, the EU currently prohibits member states from negotiating separate bilateral trade agreements. Given the ever-increasing economic prevalence of countries like China, particularly with institutions such as the Asian Infrastructure Investment Bank backing them, it is crucial for the UK to have the ability to negotiate such free trade agreements. Considering the fact that the UK is the 5th largest economy in the world, it is likely that it will have the clout necessary to successfully negotiate free trade agreements with nations such as China.

Second, the regulations imposed by the EU are harmful to the UK’s economy writ large and to small and medium-sized businesses in particular. Broadly speaking, EU regulations impose large costs on the UK for little gain. The UK allocated a net contribution of £10.4 billion to the EU in 2015 which is funneled to the EU’s budget. One of the largest sources of the EU’s expenditure is the Common Agricultural Policy, a policy which constitutes 40% of the EU’s budget. Despite the UK’s continued insistence that funding for the Common Agricultural Policy should be reduced, the EU has failed to respect those wishes. Considering the limited benefit that the UK accrues from the Common Agricultural Policy, it is harmful for the UK to abide by those regulations.

In particular, these regulations harm small and medium-sized businesses without allowing them to access the benefits of free trade. An example is the working time judgment by the European Court of Justice which would require payment for travel time to appointments. Such a policy would impose large costs on small businesses which may be rendered incapable of sustaining themselves. Even if the general effect of the UK leaving the EU is economically negative, the benefits to small and medium-sized businesses should be prioritized over the benefits that accrue largely to large corporations from foreign countries.

Third and finally, the free movement of labour, imposed by the EU, poses a major security concern to the UK. The free movement of labour reduces any potential security checks that the UK may want to impose on economic migrants. As an example, the Paris bombings were allegedly perpetrated by a terrorist entering the EU from Greece, according to the same Forbes article hyperlinked above. This has a clear economic implication; terrorist attacks reduce the amount of consumer spending in the short-term, similar to what occurred in the aftermath of the Paris bombings, by striking fear in consumers who will be less willing to shop in large retail spaces.

The EU is no more than a large free trade agreement which forces the UK to comply with regulations that are unnecessary to facilitating free trade. The UK should leave the EU and regain the ability to negotiate bilateral and multilateral free trade agreements in accordance with its needs.


Jason Xiao


Works Cited


IMF Report for Selected Countries and Subjects


Picture taken by Mike Rolls on August 1, 2011, titled "Canary Wharf offices #1", obtained through Creative Commons.