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Actually, they don't want to emulate the EU

Posted by Helen Thursday, December 30, 2004

Human nature being what it is (as Miss Marple would say) and political thinking being what it is (as she most definitely would not say), any admission that a certain political model is a duff one becomes as rare as an albino raven. Rarer, if anything.

Instead, we are told, on no evidence whatsoever, that the given duff model is one that the rest of the world aspires to. The rest of the world may happily choose another model and overtake the duff one in a puff of smoke but that does not stop the strange assertions.

Take the National Health Service, for instance. (No, I don’t especially want it either, but, together with the rest of the country, I am stuck with it.) A duff if ever there was one. Yet, how often have we heard the ridiculous assertions that it was the envy of the world? So envious is the world, apparently, that nobody has the slightest intention of imitating it, presumably because they want to preserve its pure, unadulterated uniqueness. (The Soviet Union and other socialist states do not count, as theirs was the original. Driven by ideology rather than good sense Nye Bevan took the wonky Soviet medical system as his example.)

The same applies to the EU, a customs union that has morphed intentionally into a

“tightly regulated single or internal market, with a cumbersome supranational bureaucracy which now incudes the Commission, Parliament, Council, Court of Justice, the acquis communautaire and the single currency (presently used by fewer than half of EU-25) run by a European Central Bank.”
This quotation is taken from a recently published paper by the Centre for Policy Studies, the first of a new series, called Perspective. The title of the paper is self-explanatory: Backing the wrong horse, and it is by Ian Milne, some time editor of the European Journal, some time editor of eurofacts and present Director of Global Britain, as well as author of many papers and articles on the European economy and a man with a long career in industry and merchant banking.

Mr Milne tends to write dryly and soberly, studding his prose with a great deal of economic data, usually taken from official sources. Properly looked at, these sources paint a much more dire picture of the EU economy than the average eurosceptic can manage. That is probably why they are so rarely quoted in any detail by europhiles, who talk airily of benefits being so great as to require no calculation.

In his introduction, Milne outlines the three basic models of internatinal trade: customs union, Free Trade Agreement (FTA) or going it alone. The EEC was never intended to be an FTA. From its beginning it was a customs union, the obvious argument being that a customs union can be turned eventually into a political one and, even, into a state. (I am not getting involved in that silly discussion about it being federal or not federal.)

At the beginning of the twenty-first century, with the world very different from the one in which the customs union of the Treaty of Rome was formed, the EU faces various economic problems: it has underperformed for a decade or more and there is no relief in sight; its aging demographic profile is unlikely to help growth in productivity. At the same time, it is clear that membership of the EU has imposed serious economic burdens on the UK (though these are greatly augmented by the present government that seems to have learnt nothing and forgotten nothing about old socialism and its disastrous consequences).

The real crunch is the point Mr Milne lists as third:
“… the EU model has not been emulated anywhere in the developed world. The relatively few customs unions that do exist outside Europe are in poor African countries, former Soviet dependencies, Gulf states and developing countries in South America.”
He does not add that none of these customs unions are developing into the sort of tightly regulated political and economic union that the EU is aiming at. But even without that, the list is indicative. The countries in various customs unions are not only not developing but falling behind. The wealth of the Gulf states is based entirely on oil and has led to very little economic and political development; Africa, with very few exceptions, who do not happen to be in customs unions, remains a constant and intractable problem; the former Soviet dependencies are going nowhere and are steadily being bullied by Russia back into complete dependency.

That leaves South America, with several customs unions, none of which are showing any signs of turning into a political one, despite the occasional high rhetoric.
“Meanwhile, the US, building on the success of NAFTA (Canada, the US and Mexico), has signed 15 FTAs and is negotiating or has announced its intention to negotiate FTAs with another 11 countries, making 26 in total. By 2005 it hopes to complete negotiations on the Free Trade Agreement of the Americas (FTAA), creating a 34-country free trade zone of 800 million people stretching from Alask to Tierra del Fuego.”
Another possibility, studied and developed by the Heritage Foundation is a Global Free Trade Area (GFTA), which we shall discuss on this blog at some future date. The EU itself, though negotiating various free trade agreements with other groups or individual countries, such as Mexico, remains resolutely wedded to its 1950s model. The 1950s, let me remind everyone, may have been a good time for clothes but was one of the worst decades for politics.

While we remain in the EU, we and other members, remain shackled to this outdated, extremely duff model. The two things left to us will be to try to bully neighbouring countries into joining it by refusing to sign free trade agreements and … to go on telling ourselves that the world envies us and tries to emulate us.