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

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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Why does a person have to be an EU federalist to believe in equality of opportunity ?
 
trasneoir said:
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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That's a fair point but it's a separate argument to unfettered free movement. There'll always be population flows between nations, whether there's a political union or not, but I think the question is around whether free movement within the EU has any economic rationale that underpins the common market? I don't think it does.
 

Of course it has. Limitation in free movement does cost businesses and economies money: lots more paperwork involved, lots more border controls, lots more administration, much higher barrier for people moving around to do business.
A simple example: I remember very well the summer traffic gridlocks on the Italy / Austria and Austrian / German border up until the early 00'ies where people where queuing for hours. And that was a inner-EU border before Schengen. Huge costs to individuals, economies, and environment.

This is on top of any perceived barriers in people's head that would prevent them from thinking about doing business abroad because of the true or perceived hassle of travel restrictions.
 
Unlimited free movement also costs money and eventually impacts on the everyday lives of citizens
 

We're talking about the right to work not the right to travel or transit. The UK and Ireland are not part of Schengen yet today we are in the single market.
 
I think we are overplaying the 'immigration cutting wages' reason for the Brexit vote. It tipped the balance maybe. But two thirds of Labour voters voted Remain. This all originated and was essentially driven by anti European right wing Tories. And they are not in the least threatened by Polish immigrants, indeed they probably benefit from them.
Hence this is all essentially political and there will be very little good will for Britain's position even if it made economic sense all round to do as Brendan suggests.
 
cremeegg said:
Why does a person have to be an EU federalist to believe in equality of opportunity ?
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They don't. I think the political union is more im

There's a huge difference between people physically travelling across borders relatively hassle-free and people relocating to another state to reside and work (or not as the case may be). For what it's worth I'm in favour of the principle of free movement, but it's support for a political goal, not an economic one.
 
Delboy said:
Unlimited free movement also costs money and eventually impacts on the everyday lives of citizens
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Except there is not unlimited free movement, this one of the biggest lies sold to the the people of the UK! If the UK or Ireland for that matter applied the legislation like other countries then the steps would be as follows:
  • An EU citizen has the right to travel to another EU citizen for up to three months to seek employment
  • If after three months that person has not found employment they are entitled to apply for an extension of a further 3 months, however the state is entitled to refuse if it feels there is little likely hood of the person finding employment
  • If at the end of the 3 or 6 months the person has not found employment then the state can require them to return to their own state
  • And it does not stop there, EU citizens are entitled to be granted permanent residence status after 5 years, but again this is only if the can show that they have established an economically viable life style - permanent employment contract, no social support claims etc....
  • In the case of people wanting to retire abroad, you can only do so if you have sufficient funds to do so and even then your home state (the one that pays the biggest portion of your pension) is liable for your healthcare costs.
The legislation makes it very clear that the free movement of people should not create a burden on the host state.

So why has the UK not applied these rules as they have been done is say Germany for example????

The reason is this, the UK is required to treat EU citizens the same as UK citizens, so EU citizens in low income jobs are entitled to tax credits etc... What the UK wanted to do was with hold such credits from EU workers and that is blatant discrimination and was never going to fly.
 

Thanks for posting some real information. Those restrictions seem eminetly sensible. One wonders why the Remain side didn't put that on a leaflet and letter drop it to every home in Britain!

But, if the UK is required to treat EU citizens the same as UK citizens, why are they allowed to deport them after 6 months if they haven't found work? It seems to be the distinction between denial of benefits and deportation is arbitrary, surely the fundamental point is that EU citizens in the host country do not have the same rights as citizens of the host country.
If it's blatant discrimination to deny benefits to someone just because they are a citizen of an EU country other than the host country, I am at a loss to understand why it's not blatant discrimination to deport someone just because they are an EU citizen of a country other than the host country.
The UK seem to feel that by obliging them to make the same level of benefits available, free movement of people is creating a burden on the host state.

If anything, these limitations on free movement strengthen the argument that the single market does not depend on free movement of labour. If these restrictions can be applied, why not others?
 
I work in a small profitable office which is made up of a team of experts from over 10 different EFTA countries. Assembling such a team would simply be impossible without freedom of movement. There is no way a European company could compete in this business area with one from the US, say, using people drawn from a single country. A big reason why places like Silicon Valley, Hollywood, Wall Street, etc. are global economic centres of specialist business is because they attract talent from a pool of 300 million.

If you want European companies to able to compete with American or Chinese ones, then it's vital they can draw on a large pool of talent. London is a good example; it was a backwater in global finance until it found itself within a single market of over 400 million people. Since then London has grown to be the biggest financial centre in the world by attracting the best bankers, lawyers, etc. from all over the EU.

A single market is NOT just free trade. It allows specialization - the UK has become more service oriented in the last couple of decades while Germany and others have taken up the manufacturing slack. As a result, German cars are globally competitive as are UK financial services. This is a healthy development for Europe as a whole.
 

The US is issuing 1 million green cards a year. Why is it doing that? Because they are attracting talent from a pool of 7 billion.
How many Irish, Chinese and Indians are working in Silicon Valley? Brits in Hollywood and Wall Street?
The US isn't in a single market with any of those countries.


Strange, every other European city found itself within a single market of over 400 million. Why did London became the biggest financial centre in the world and not some other major European city? What other European city in the 1960s was an important to global finance as London?
Let's assume London had some historic advantages, and perhaps some natural advantages - timezone, english language...

Somehow I don't think London will have any trouble getting staff, in or out of the EU, for those kind of positions. If they are world class bankers or lawyers, they are not going to have any trouble meeting prospective visa requirements.

Money talks, and it's up to London now to rely on those same advantages to maintain its position and attractiveness as a place to work for such in-demand talents.


The whole point of free trade is specialization. New Zealand Lamb, Chilean wine, Japanese and Korean cars and electronics...

World class talents - the kind capable of keeping a european industry globally competitive - don't need unrestricted freedom of movement. They are going to qualify for any kind of points or visa based scheme going. So it's a false dichotomy to equate "no free movement" with "native talent pool only".
 
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odyssey06 said:
The US is issuing 1 million green cards a year. Why is it doing that? Because they are attracting talent from a pool of 7 billion.
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I thought you did not see any economic benefit to allowing people to bring their talents to other countries? So not only does the US benefit from a national talent pool of 300+ million people, they also allow immigration. This is exactly the reason freedom of movement is integral to the economic well-being of Europe. By the way, have you ever tried to get a visa to work in the US?

odyssey06 said:
How many Irish, Chinese and Indians are working in Silicon Valley? Brits in Hollywood and Wall Street?
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Exactly - if restricted to "local" talent, neither Silicon valley, Hollywood nor Wall Street would be global powerhouses in their respective business areas. The numbers of Brits in Hollywood are dwarfed by the numbers of non-Californian Americans. Ditto for Wall Street.

I'm getting more and more confused. The subject here is what are the economic benefits of having freedom of movement of people. You seem to be objecting to my argument that to be globally competitive you need access to a large pool of potential workers. Yet with each statement, you just re-iterate that workers from elsewhere is vital.

Could you clarify your position please? Do you agree that allowing people to move to work in areas where their expertise is valued and relatively better paid, is of economic benefit? If so, then I don't understand why you are arguing with me, since this is exactly my position and the reason for the EU to embrace such movement.
 

I've never tried to get a visa to work in the US but given the number of my graduating class who are working there, and the fact that 1 million people a year are getting green cards, it appears to be non-trivial but attainable.

I didn't say that there wasn't economic benefit ... but that allowing the host country to control it in places like the US, Canada, New Zealand, Australia does not seem to have hindered those countries economic prospects, or its ability to attract talent from around the world, or to specialise in particular fields.
The EU on the other hand does not allow the host country to control it, it is unrestricted immigration in that sense. So the question is whether the single market requires unrestricted immigration i.e. free movement of people. I am arguing no.
I am not disagreeing with you on the benefits, but on whether those benefits necessarily require unrestricted immigration or can be obtained (as the other Anglosphere countries obtain it) by means of visa and points based schemes and other controlled schemes.
All the points I have made in this thread are in support of that position.

So, why is unrestricted freedom of movement integral to the economic well-being, and how would that economic well-being be damaged by more restrictions on movement of people? What is the minimum level of free movement of people required to support a single market?
As noted earlier, NAFTA does not have free movement of people, for example. So why must EFTA?
 
odyssey06 said:
I've never tried to get a visa to work in the US but given the number of my graduating class who are working there, and the fact that 1 million people a year are getting green cards, it appears to be non-trivial but attainable.
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The vast majority of that 1 million are family - children, parents and husbands/wives of US citizens. The H1B program (for skilled workers) is restricted to around 80k a year. Your friends' experiences are not representative.

No it does not - this has already been pointed out. The EU only requires members to allow residency to EU nationals if they have a job or have sufficient means to support themselves. And by the way, the Australian points system has plenty of flaws - google it - it requires paperwork, time and a large bureaucratic apparatus to administer and it, in fact, has not controlled the numbers in the way desired; lots of people get in but then struggle to get appropriate work and on the other hand, companies cannot always get the specific people they want or need though the system.

"The EU seems to have an ideological attachment to free movement of people." I think you said. I am pointing out that the principle of freedom of movement for people is not based on ideology but on economics.
Do you believe that if the Americans suddenly decided that visas were required for citizens to move from state to state, that this would damage the economy of the USA? I believe it would. And so would it damage the economy of the EU to introduce 28 different points systems, conditions, delays, etc. to allow people to take up work in another EU country.
 

So why not extend it, why doesn't the USA have free movement with Mexico and Canada? And Brazil and Argentina? Or the EU for that matter?
The USA is a single fiscal-political entity, with social transfers to balance movements and a common language. People in California think about people in Wisconsin in a totally different way that people in Britain or France think about Greece or Poland. Accordingly, living standards within the US are such that you don't have a Britain-Poland type difference. A better analogy would be the US admitting Cuba as a new state. Do you think the US would within 2 years allow free movement?
But if it admitted Canada, it might well allow free movement in 2 years. That is the difference.

Free movement of people was not an issue for the UK when the EU had 15 countries of closer-matched living standards. It became a major issue only in the early 2000s with the accession of eastern European countries of significantly lower living standards than the EU core.

Your argument is in favour of free movement of people, full stop. It is not an argument - at least you have not made the argument so far - for free movement of people as an essential component of a single market of EFTA states, with restricted movement of people from non-EFTA countries into EFTA countries. Should the EFTA open up their borders to anyone who can find a job in an EFTA country within 3-6 months?

Canda and Australia, draw on a domestic labour market of 20-30 million, and use visa schemes to attract global talent. Their economic wellbeing puts forth a favourable comparison vis a vis the EU states including uk, france, spain, italy. So whatever benefits accrue to eu states from unfettered access to 400 m workers - they are not game changing.

So, why shouldn't Britain have single mimarket access without granting corresponding access to people?
If free movement of people has economic benefits to the destination country, then Britain will be the big losers, so why should the EU make it a red line in Brexit negotiations???
A purely economic rationale would see free movement extended to non-EFTA migrants. A purely economic rationale would continue free trade with Britain in the event of Brexit, because free trade without free movement is surely better economically for both parties than no free trade???
That is why I am saying the EU appears to have an ideological attachment to "free movement of people" within the EU member states.

The original question on this thread is not whether there are benefits to movement of people, or benefits to free trade but whether "there some economic argument which says that you can't have a free market without free movement of people?" I haven't heard a compelling one so far.
 
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I don't really know what you're trying to achieve with this line.

Of course you can have an economic block without all of the freedoms. We could have an EU with no free movement of services. We could have one without free movement of capital. You could even restrict free trade to goods that are covered by the WTO. All EU core freedoms are there because they are believed to be economically beneficial. Even you seem to agree on the economic benefits of people being able to work in other countries.

The EEA provides this package of economically beneficial freedoms - you accept them all or you don't. The EU has bigger global fish to fry instead of wasting diplomatic effort and negotiation teams on giving each member a full ala carte menu for membership - this was partially possible in the past but is simply not feasible now with 28 members. And in any case the whole is weakening by fragmentation of rules and regulations.
 
odyssey06 said:
Accordingly, living standards within the US are such that you don't have a Britain-Poland type difference
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You clearly have never spent time in the poorer parts of the deep south such as Alabama or Louisiana, if that is what you think.


The answer is that the OP clearly does not know what the EU is about - it's about building a better future for all it's citizens not just economically, but in total. The EU is a major force of wealth redistribution through it structural funds and so on. And building a single market as opposed to a free market is the objective, that means the free movement of all the elements of production. And yes of course there is an economic benefit for the average citizen as he is free to supply his labour to the highest bidder anywhere in the union, should he choose to do so. Just because the economic benefit does not fall to a company, does not mean it is not an economic benefit.

Why should the UK or another third country for that matter gain the benefits for the single market, while at the same time depriving the average citizen of their right to supply their labour to any part of the same market???? If UK just want free trade, fine go join EFTA or accept WTO rules, but if they want to get access to the full EU Single Market then they do it on the same bases as the member states by joining the EEA or by applying for EU membership assuming they have invoked article 50.
 
Jim2007 said:
Why should the UK or another third country for that matter gain the benefits for the single market, while at the same time depriving the average citizen of their right to supply their labour to any part of the same market????
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Because EU citizens will be better off if with the UK in the single market rather than outside it; or with a free trade that represents the same.
If the EU restrict future trade with the UK in any way versus what it would have been if in the single market, it will hurt EU citizens, who will lose out on those opportunities to trade with the UK.
The EU will be better off still trading with the UK and Switzerland as if they were in the single market, than if they impose any kind of restrictions on trade to match the restrictions on labour proposed by UK\Swiss.

The EU should be reacting in a positive way, looking at why the UK was able to offer these economic opportunities to the rest of the EU, and make the EU more like the UK, instead of trying to turn the EU into a prison.
 

Well first of all we (Switzerland) accept the free movement of people and we pay into the structural funds plus we contribute to several other EU projects, so we're not the same as the UK.

The basis of the single market is free movement of all the elements of producing, by allowing the UK access without obligations would hit the citizens of several levels:
- Unable to sell their labour into the UK
- Less structural funds for distribution
- Unfair competition in terms of labour law etc...
You want the single market with all it's benefits then you must sign up to the program. If you just want the free trade then sign up the EFTA and WTO.

odyssey06 said:
The EU should be reacting in a positive way, looking at why the UK was able to offer these economic opportunities to the rest of the EU, and make the EU more like the UK, instead of trying to turn the EU into a prison.
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More like the UK, seriously!
- It's run a balance of trade deficit from more than twenty years
- It's the last but two when it comes to closing business contracts (just a head of Greece and Malta), taking about 190 days
- It's the only major EU economy that was unable to improve it's balance of trade, hell even Italy has managed to do start producing positive trade balances
- Despite have control over it's own currency it has been unable to avoid having to introduce austerity measures and has now been forced to abandon it's deficit reduction plans
- It has decided to abandon a relatively rich market, in close proximity, for what we have yet to see
- As result of the exit strategy it's companies are now on sale as we have seen yesterday with the take over of ARM by Softbank yesterday
- It's financial services sector now faces the double challenge of having to over come the lack of passporting opportunities combined with the transaction taxes of doing business in the EU or walk away from a major chunk of assets under management.

There is a lot wrong with the EU that is for sure, but there are definitely may better models to follow than the UK.
 
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