Could the UK not have free trade with the EU without free movement of people?

Brendan Burgess

Brendan Burgess

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The vast majority of people in the UK and the rest of the EU agree that free trade is a good idea.

If the British want to control their borders, then they should be allowed to do so. A free market or a single market is still a good idea.

Or is there some economic argument which says that you can't have a free market without free movement of people?
 
I don't think its fundamentally an economic argument, but political.
I think the arguments are a) if the UK gets a better deal than the current members of the EU (i.e. access to single market and the ability to restrict EU migration) then other countries will presumably look to exit on the same terms and the EU could unravel and b) newer EU members in particular want access to the UK labor market for their citizens and would block any deal along the lines you are suggesting.
 
Doesn't North America have NAFTA without free movement of people between US, Canada and Mexico?
My understanding (from wikipedia) is that it is restricted under the TN status visa scheme:
https://en.wikipedia.org/wiki/TN_status

The EU seems to have an ideological attachment to free movement of people. The EU is not a free market, it is a customs union.

It would be a lot easier to expand the EU further if there could be associate membership for UK, Turkey etc so that there could be free movement of goods but not labour.
This is currently also a bone of contention in relation to Switzerland's future in the single market (they are not an EU member).

I think the EU is in a bad situation where it seems to think it needs to make the EU a prison by hurting any country that wishes to exit.

The solution to the concerns of new EU members is that their domestic economic situation needs improvement.
Relying on emigration as a release valve on a society is not going to lead to a flourishing society (e.g. Ireland in the 1950s or 1980s).
Is it in anyone's interest (the EU, the UK or the countries themselves) if Latvia, Lithuania and Estonia become nothing more than sources of labour for the rest?
What will these countries look like in a generation's time if their best and brightest see no future in their own countries?
 
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Just to briefly mention the counterpoint: Why permit the movement of capital and services and not people? I'm no socialist but the only parties that would benefit from such an arrangement would be those with the capital or in control of services, and there's been enough of that already.
 
rob oyle said:
Why permit the movement of capital and services and not people?
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Because capital, services and people are all different things. You could allow any one and not allow the other two. That should be a political choice or political agreement between consenting nations.

rob oyle said:
the only parties that would benefit from such an arrangement would be those with the capital or in control of services
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If we sell our food to the UK and they sell cars to us, we all benefit. Not just the capitalists. The lower prices and economic growth are good for everyone.
 
I also suspect that the free movement of people is something which benefits capitalists in the receiving country a lot more than the ordinary citizen. Capitalists can get cheap foreign labour.
 
Why should Britain benefit from European jobs created by having access to the single market if they are are not prepared to allow the free movement of those jobs for all Europeans. What's to stop the UK using State Aid to poach even more jobs from the EU at the expense of other European Countries?
 
Sunny said:
Why should Britain benefit from European jobs created by having access to the single market if they are are not prepared to allow the free movement of those jobs for all Europeans.
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Because it would be reciprocal. They allow the EU access to their market and the EU allows the UK access to the UK market. Both economies benefit.

Brendan
 
Brendan Burgess said:
If we sell our food to the UK and they sell cars to us, we all benefit. Not just the capitalists. The lower prices and economic growth are good for everyone.
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:)... Cars and food and cheap in the same sentence....

There are two aspects to the "free movement of people" mantra.
Free movement of EU nationals within the EU
Free movement of [undocumented/illegals/refugees (under number of headings)/etc] people from outside the EU within the EU.

The second one was at the heart of the Leave debate in Britain and was never envisaged by the founding fathers of what we now call the EU.

As for
Brendan Burgess said:
The vast majority of people in the UK and the rest of the EU agree that free trade is a good idea.
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I would suggest the vast majority of people in the UK and the rest of the EU have no idea what free trade is: good, bad or indifferent.
 
Branz said:
I would suggest the vast majority of people in the UK and the rest of the EU have no idea what free trade is: good, bad or indifferent.
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Good point. But I have not heard anyone arguing for protectionist economic policies.

Maybe the Remain camp should have created an artificial debate. Get some maverick economist to claim that stopping free trade would boost the British economy.

Brendan
 
Brendan Burgess said:
Because it would be reciprocal. They allow the EU access to their market and the EU allows the UK access to the UK market. Both economies benefit.

Brendan
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But it wouldn't be equal. Why would the EU allow Britain to say no to free movement of workers, no to EU regulation and no to contributing to the EU budget but still allow them to access to the single market to compete with European companies. Forget about the impact on Ireland which is an outlier and a different argument but the UK only accounts for about 10% of EU exports. At the same time, the EU accounts for over 50% of UK exports. I know German car companies don't agree but let's get real about who needs who here.

Also, if you at an area like financial services, the UK has thousands and thousands of jobs based solely on having access to the single market. They don't exist without it so they are European jobs that are based in the UK. Which is fair enough if every citizen in the EU can get one but why should EU countries with high unemployment not turn around and say if want out, then leave but don't expect us to allow you remain the biggest financial centre and clearer of the European currency if you want to be by yourself. By all means, come up with mutually beneficial trade deals but the idea that the UK can access the single market on their own terms is delusional. And it's not about punishing them. It's simple economic reality because the single market dies if they get what they think they can get.
 
Sunny said:
but still allow them to access to the single market to compete with European companies.
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Because the EU would be allowed access to the British market! It's not about allowing the UK access to the single market, but not the reverse.

Sunny said:
Also, if you at an area like financial services, the UK has thousands and thousands of jobs based solely on having access to the single market. They don't exist without it so they are European jobs that are based in the UK.
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Surely London was a major financial centre before the EU was created?

I think it's clear that it has benefited from the single market.

Sunny said:
By all means, come up with mutually beneficial trade deals
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OK, that is what I am getting at. We should be aiming to create as free a market as possible. Maybe if London has some unfair advantage in financial services, then exclude financial services from the deal.

But why is the free movement of people dependent on access to the single market?

There doesn't seem to be an economic argument. It's a political one.
 
Sunny said:
Why should Britain benefit from European jobs created by having access to the single market if they are are not prepared to allow the free movement of those jobs for all Europeans. What's to stop the UK using State Aid to poach even more jobs from the EU at the expense of other European Countries?
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What is your source for this "poach even more jobs from the EU" reference?
The UK is out competing the EU in terms of job creation, largely because it avoided the financial disaster that was the euro. It cannot be blamed if the rest of the continent engages in massive job destruction and anti-employment practices. Look at the strikes in France when it tries to go one step in the same direction as the UK when it comes to making it easier to hire and fire.

What's to stop the trade agreement between the EU and the UK (and Switzerland, and Norway) from specifying rules on state aid?
Why doesn't the EU have a trade agreement with Canada, if it's so pro free trade?
 
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Hi all

There are "four freedoms" at the heart of the European Single Market:

1) Free movement of goods.
2) Free movement of capital.
3) Free movement of services.
4) Free movement of people.

Acceptance of the "four freedoms" is a requirement for a country wishing access to the European Single Market. Three countries, Iceland, Liechtenstein, and Norway have accepted the four freedoms and have access to the European Single Market, even though they are not members of the EU.

The United Kingdom electorate have tasked their government to "cherry pick" the "four freedoms". The electorate appears to want free movement of goods, capital, and services but not people. While there is an economic argument, as Brendan pointed out in Post #1, for allowing the United Kingdom free movement of goods, capital, and services, it is not legally or politically possible for this to happen without accepting free movement of people as well. Switzerland, for example, is at risk of losing it's access to the European Single Market following a 2014 referendum which was narrowly in favour of limiting immigration, which is mainly from EU countries. The Swiss government has until 2017 to implement immigration quotas and it remains to be seen how this will play out.

The British Government has been placed in an impossible situation by the UK electorate. The British Government could negotiate out of the EU, whilst signing up to the "four freedoms" and keeping access to the European Single Market, but it would be a fudge of enormous magnitude as it would mean accepting free movement of people which the UK electorate appears to be against.
 
TLO said:
There are "four freedoms" at the heart of the European Single Market:
1) Free movement of goods.
2) Free movement of capital.
3) Free movement of services.
4) Free movement of people.
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You seem to have missed the main point of Brendan's question though, in a single word, "Why?"
What's to stop the EU and UK coming to just such a deal?
I have zero respect for what's deemed "legally possible" or "impossible" in the EU, given how the ECB has been conducting itself for the last 10 years.
So it comes down to what's politically expedient.

And also, we don't have free movement of services. It's now 2016, and for a freedom "at the heart" of the Single Market, EU member states seems to be doing a very good job of cherry picking how much of that particular freedom we are allowed.
https://ec.europa.eu/growth/single-market/services/

Perhaps the real problem with the UK is that they are too honest and open in their dealings with the EU. If they sign up to a deal, they mean to honour it. Whereas too many EU member states sign up in public but then in private and in all their adminstration and bureaucracy thwart it.

If you think there's free movement of services, try to service the French insurance sector from Dublin and see how far you'll get.
 
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Also, in relation to "free movement of people", the UK joined the EEC in 1973. Full freedom of movement did not arrive until 1992 with the Maastricht Treaty. So for almost half of its lifetime in the EEC\EC\EU, there wasn't full freedom of movement for workers between the UK and EU member states. It could hardly be the end of the world if the 1973-1992 situation was returned to, could it?
 
Brendan Burgess said:
Is there an economic argument for the free movement of people?
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I just . Answers include labour market flexibility (avoiding shortages and surpluses of labour), fixing demographic imbalances, skill sharing, and so on. Along with the benefits to the host country come responsibilities such as social welfare, healthcare and equal access to housing opportunities. I presume one problem with allowing post-Brexit Britain access to the free market without free movement of labour is not that it would disallow immigration, but would allow it on its own terms. That would mean the possibility of accepting migrant worker but denying access to the normal rights, or deporting them if they lose their jobs. Apart from the denial of workers' rights, that would represent an unfair economic advantage to Britain.
 
Hi dub_nerd

Great, so we are getting towards an answer.

So if wages are too high in Ireland, Eastern Europeans will come in and do the work for a lot less.
In Ireland we can build a financial services centre because experienced Europeans would be free to move here where Irish people wouldn't have the skills.

So the Poles might say "We will let you sell your cars to us, but we don't really have anything much to export to you except our surplus of people."

Brendan
 
dub_nerd said:
I just . Answers include labour market flexibility (avoiding shortages and surpluses of labour), fixing demographic imbalances, skill sharing, and so on. Along with the benefits to the host country come responsibilities such as social welfare, healthcare and equal access to housing opportunities. I presume one problem with allowing post-Brexit Britain access to the free market without free movement of labour is not that it would disallow immigration, but would allow it on its own terms. That would mean the possibility of accepting migrant worker but denying access to the normal rights, or deporting them if they lose their jobs. Apart from the denial of workers' rights, that would represent an unfair economic advantage to Britain.
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How can it be unfair, if the EU can treat UK and non-EU workers in the same way that the UK can treat EU and on-EU workers?
The UK already issues visas to non EU workers, as does Ireland. One assumes that means we already have an unfair advantage?
 
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