In World Economy News 22/01/2016
Some small countries have been more successful at negotiating trade agreements than the European Union, according to a report that questions the idea that Britain benefits from “negotiating clout” by being in the bloc.
The combined 2012 gross domestic product of Japan and Australia, two of the larger countries with which the EU has yet to secure a trade deal, is more than the combined GDP of all the 55 countries with which it does have one, according to analysis by Michael Burrage, a director of corporate strategy consultancy Cimigo.
The assessment, for the London-based think-tank Civitas, supports the suggestion that Britain could secure its own trade deals if it left the EU, undermining one of the central arguments for staying in. Prime Minister David Cameron has promised a referendum on membership by the end of 2017 and polls suggest voters are split about whether to leave or stay.
“This data gives no support to the view that small independent countries are less able to negotiate with large economic powers, or that the latter are less willing to negotiate with them, and no support either to the view that they will be slower in concluding such agreements,” Burrage said in an e-mailed statement. “Those particular disadvantages for smaller, independent countries are clearly imaginary, and along with it surely the notion that the U.K. would be unable to negotiate agreements on its own.”
Burrage found that Chile, South Korea, Singapore and Switzerland all have trade agreements with countries whose GDPs together total more than $38 trillion. The total GDP of countries with which the EU, by comparison, has trade agreements is $6.7 trillion.
