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


If the Poles don't have anything to export to the UK, how are they going to pay for imports from the non-eurozone UK?
 
I think if Poland had nothing to export other than its people it would not have much money with which to buy anyone's cars. Actually Poland is Europe's biggest exporter of electrical appliances having overtaken Germany and Italy. By attracting German manufacturers to relocate, it also built up its industrial base and experience, and ended up attracting additional Asian manufacturers, Samsung and LG etc. I wonder if this is one of Britain's disadvantages when it comes to the EU -- its manufacturing base has been eroding for decades, and it doesn't have (for instance) Berlin's proximity to the border municipalities of Poland, a short drive away.

Unable to avail of this continental advantage, I suspect Britain has meanwhile fallen foul of its other problem -- income inequality between London and the north. If the Brexit vote had been based on the economic advantage to Britain as a whole, it would surely have stayed in. But those advantages are distributed unevenly amongst the population, with a significant subset of lower paid workers finding themselves in competition with even cheaper migrant workers. Unfortunately for those upset Londoners, there is one vote per head of population, not one vote per euro of economic advantage.

This leaves Britain in something of a dilemma. It's competitiveness within Europe depends on migrant labour, but income disparity within the population makes migration politically unacceptable. This is something Britain is going to have to face up to, regardless of what sort of deal it can cut with the EU.
 
OK, so Poland and the UK can enter a mutually beneficial trading arrangement without the free movement of people?

The Poles can sell their electrical appliances and buy the UK's cars.

Happy days. No need for Poles to have free movement into the UK.

Brendan
 
Polish wages are lower than the UK. More Poles want to work in the UK than Britons want to work in Poland. The UK will still be able to accept immigrant Poles but not give them the same economic rights as previously. This gives them an unfair advantage.
 
The question on the ballot paper wasn't "do you want opt out of any of the 4 freedoms", it was simply put: leave the EU yes/no.
The 4 freedoms are the fundamental core principles upon which the European Union is build. It doesn't matter whatsoever if this was different before Maastricht.
The freedom of movement says that all EU citizens have the same rights in any EU country (doesn't mean that the rights are the same in every country).

I genuinely fail to understand why people object to this - because a worker born in Poland might work for less (in Britain) than a worker born in Britain and therefore puts the Britain-born out of a job? That's it? So why not fix the underlying issue, i.e. apparently the British person doesn't want / can't afford / whatever / to work for the same wage, so either fix the underlying wage (minimum wage agreements, sector-wide pay agreements, etc), or the cost of living, or other motivators that might be necessary to have "the local" take the job. Or seeing differently, apparently British companies can't afford to pay "higher" wages to get the locals to do the job. I would be surprised if British companies suddenly can magic up more money to pay higher salaries - they will just end up less competitive.

If "the foreigners" get "too much" from the welfare system, then (see point above) the "local" get too much from the welfare system as well - again, same rights. If there is "too much" welfare spent, change the rules.

There is no issue with entering into bilateral trading arrangements once the UK is out. Don't expect this to be a slam dunk affair though.
 
Hi Brendan,

In economic terms there might be some gains resulting from the free movement of people in the EU, but I would think gains from the free movement of capital & goods would be far more significant...for example exports to non-EU countries has a big benefit to our economy.

I would doubt the economic reasons for allowing the free movement of people has anything to do with the current mess that has resulted in Brexit.
If Britain opt out then eastern europeans have one less "rich" country to move to which would see them opting, in even greater numbers, to the likes of France and Germany. Is it any wonder Marie le Pen is ratcheting up the votes. Immigration of eastern europeans results in increased competition for lower paid jobs which is the "market" for UKIP, Sinn Fein, Front National and others.

Whilst it may be nice in theory, I don't ever see the EU becoming a USA.
 

A lot of people who voted to Leave, I think their point of view was, well what am I getting from the Polish person coming here and working for less?
Maybe it'd be better if we create less jobs, but they pay more, and are filled from the ranks of the British unemployed?
Likely there are some British companies that will not be able to compete at those wages, but from the point of view of an unemployed Leave voter in Manchester, those jobs are no use to him anyway. So clear the field for the ones who can.

It sounds like there is a mutual incompatibility between generous social benefits, and a country receiving mass immigration via the free movement of labour?
So why is it wrong for an unemployed Leave voter to say, no to free movement of labour, I don't want to see social benefits being cut?
Throw into the mix that there is only X amount of social housing, places in schools, hospital capacity to go around and is it any wonder people in that position are opposed to free movement?
What's the point of having a census every 5 years to plan social needs, if every year a small city can arrive from other EU countries?
I'm not an employed Leave voter in Manchester, but I'm trying to picture things from their shoes.

And I'm not disputing the logic of you underlying issue fix, but if it's so easy to fix an economy to get the unemployed working, why not fix Poland's?
Maybe if Britain isn't as competitive, some of those jobs will go to Poland instead? And everybody's happy?
 
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Once the disparity is great enough, there is no easy fix. Suppose an eastern European can earn more at bartending in the UK than as, say, a teacher in his home country. He can do any job for less than a UK worker wants, and he is vastly more qualified at anything he chooses to do. The UK worker hasn't a chance. Meanwhile a bunch of other more fortunate UK workers get great benefit from the EU -- selling financial services and manufactured goods. Exports have increased at nearly 7% per annum since the GFC. There is bound to be two very different perceptions of the merits or demerits of immigration. You'll probably find the same all over Europe, with local variations.
 
There are other threads on Brexit generally. Please keep this thread for the very specific question:

Is the free movement of people essential to a single market?

You might agree or disagree with the free movement of people. But discuss that in another thread.
 

The free movement of people is essential to the European Single Market as per the treaties that provide the legal basis for same. Is the free movement of people essential to a single market? Depends on what the single market is. If it is just a goods market then the answer is no.
 
Brendan Burgess said:
Is the free movement of people essential to a single market?
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No. They are two distinct ideals. They are only connected because the EU considers both to be desirable.
For countries that aren't wild about immigration/regulation, a spoonful of (free trade) sugar helps the medicine go down. This is why the EU is reluctant to offer one without the other.
 
trasneoir said:
No. They are two distinct ideals. They are only connected because the EU considers both to be desirable.
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It's a bit more complex than that: they are connected in the sense that having free movement of people greatly facilitates the free movement of goods and services. Consider an Irish SME that wants to start selling into France. There are numerous ways of doing this, but one is to have someone just go there for a couple of years and get a local presence up and running. With free movement of people, this is very straightforward - no work visas required, no need to prove a need to anyone, just hop on a plane and do it. That's just one example. It's not essential to free trade, but makes it so much easier.
 
There is another reason that free movement of labour is more than a "nice to have" added extra. Not all moves are permanent. Remittances from people working abroad back to their home country are a major part of how the home economy grows, which is ultimately good for the whole market since it increases purchasing power rather than just having a brain drain. Non-permanent movers are protected (and therefore encouraged) by not having to sacrifice health or welfare entitlements in either country.

Brendan Burgess said:
There are other threads on Brexit generally. Please keep this thread for the very specific question...
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Just a thought -- is there any way deleted posts can be moved to some sort of recoverable trash can? I'd have been happy to move mine to elsewhere, but not to write it again from scratch since it involved a bit of research. (Apologies, as this is probably for another thread too).
 
Brendan Burgess said:
Is the free movement of people essential to a single market?
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Of course it is fundamental, there is a very big difference between a free market and a single market and the objectives of the EU to build a better community for all it's citizens.
 
Brendan Burgess said:
Is the free movement of people essential to a single market?
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I have always understood that the economic case for free movement of people was to encourage economic development in the less developed areas of the EU.

Countries with a better educated workforce, greater capital formation, larger domestic markets etc. have a significant advantage over less developed economies.

Free movement of people allows individuals to travel to take advantage of the opportunities offered by the more developed economies. This can also benefit their home countries by creating a diaspora with experience working in the more developed economy. This seems to me to have been part of irelands success in the late 90s.
 

I don't see how this can be so. The people who are going to get opportunities in the destination countries are skilled, young professionals - the kind of people that any country will want, visa based or via free movement of labour, that are as much in demand in other EU countries as non-EU countries such as Canada and Australia. The people who free movement is allowing in are low skilled, exactly the type non-EU countries also wish to exclude. Was the Irish experience of low-skilled workers on UK building sites in the 1980s what free movement of labour was intended for? We'd been doing the same thing since the 1950s. I don't think these are the diaspora you have in mind for the 1990s success.

Besides, unless the source country reforms its economy, as Ireland eventually had to, there's nothing for the diaspora to come back to. And *not* having an energetic, frustrated set of educated young professionals looking for opportunities makes it easier for less developed countries to avoid reform.

I remain completely unconvinced by the proposition that the free movement of people is essential for the operation of a single market, and that lack of free movement would undermine operation of the single market to an appreciable extent.
 
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Yes and a coterie of such people pressures their home country to reform and creates a pool of people to support that reform politically and provide skilled workers to staff it.


odyssey06 said:
The people who free movement is allowing in are low skilled, exactly the type non-EU countries also wish to exclude.
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In general the people being "allowed in" are highly motivated people attracted to the greater opportunities in a more developed economy. That the UK economy attracts low skilled workers to intensive farms in the east of England is a refection of the gap between much of the real UK economy, low skilled low productivity, and the economy they think they have.


Ireland exported a large contingent of well qualified engineers to English building sites in the 1980s as well. Many of them came home to drive the Celtic Tiger.

Of course at heart I believe in equal opportunity irrespective of where you were born. Which is of course an ethical argument and not an economic one.

So the answer to Brendan's question is probably that you can grow richer through trade and not share.
 
cremeegg said:
Ireland exported a large contingent of well qualified engineers to English building sites in the 1980s as well. Many of them came home to drive the Celtic Tiger.
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They came home when things picked up. They were not the ones who restarted the economy and got growth going. If we hadn't made reforms to our economy and tax system, they would have stayed away. Their return was most welcome, but it was conditional.

Ireland has exported a large contingent of well qualified professionals to the USA, Canada and Australia, New Zealand and the Middle East in the last 10 years. We don't have free movement of labour or a single market (or even free trade afaik) with any of those countries. Yet somehow they still want our well qualified professionals. In 2014, 14000 residency visas were granted by Canada alone to Irish citizens.

What we have is a demand in country A for well qualified professionals. These demands tend to find a supply.
Visa restrictions are precisely to ensure that only well qualified (e.g. Green Card) workers are allowed residence, or seasonal workers (e.g. J1) are allowed in for a limited time on a temporary basis.
So why does a single market need free movement of labour, if well qualified professionals can find opportunities in destination countries under visa based schemes?
 
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The answer appears to be quite simple, there's not much of an economic argument but there is a strong political one; at least from the point of view of an EU federalist who sees the political union as superseding the common market.
 
24601 said:
The answer appears to be quite simple, there's not much of an economic argument but there is a strong political one; at least from the point of view of an EU federalist who sees the political union as superseding the common market.
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Here's a thought - mass emigration is a relief valve that could help prevent a bursting national bubble turning into a national economic collapse.
 
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