6 June 2016
A stock-take of international developments and perspectives contradicts the Brexit narrative on two levels.
Robin Niblett

Dr Robin Niblett CMG

Director, Chatham House


David Cameron visits at the Ise-Jingu Shrine as he attends the G7 Summit in Japan on 26 May 2016. Photo by Getty Images.
David Cameron visits at the Ise-Jingu Shrine as he attends the G7 Summit in Japan on 26 May 2016. Photo by Getty Images.


The EU referendum debate is about more than the future of British sovereignty. It also concerns Britain’s future place in the world.

Many Britons stand instinctively apart from continental Europe, viewing EU membership as a temporary economic choice rather than as a long-term strategic benefit. Those who want Britain to leave argue that the trade-offs of being in the EU now outweigh the benefits, and that the world beyond Europe promises it a brighter and more secure future. But a stock-take of international developments and perspectives contradicts this narrative on two levels.

First, emerging markets across much of the world are in turmoil, from Brazil and Turkey to Indonesia and South Africa. Making the transition from developing to middle-income country without robust political institutions is painful. The annual China Development Forum in Beijing in March confirmed that even China is struggling with this transition. Conversations during a visit to Delhi in April reveal another challenge. India is increasingly concerned about its exclusion from the large regional trade negotiations between the US and the EU and between the US and the other signatories of the Trans-Pacific Partnership. Trade with the UK did not feature in India’s list of priorities.

This is an inhospitable environment for a developed country like Britain to strike alternative bilateral trade deals. Britain is most competitive in services, the sector emerging markets are most keen to protect. Switzerland learnt this lesson during its recent free trade negotiations with China.

Comparing the EU to these emerging markets puts matters into perspective. Yes, parts of the EU suffer from high youth unemployment and low growth. But former crisis economies like Spain and Ireland are regaining their competitive edge, while Germany and seven other EU members are ranked among the world’s twenty most competitive economies. The EU’s most important advantage is that its large and wealthy single market is governed by the rule of law in a still largely lawless world. This is why it continues to attract over 50 per cent of US foreign direct investment and why China’s investment into the EU is projected to triple this year to $60 billion.

The UK is the top recipient of this FDI inflow, partly because of its open domestic market, but also because it serves as an ideal base from which to access the larger EU market. After all, as an EU member Britain is involved in writing the rules that determine the terms of access. Leaving the EU would not only deprive the UK of a key element of its attractiveness to international investors. It would also mean foregoing its most lucrative potential trade agreement: the opening of still largely protected EU markets in digital, financial and other services.

The second misapprehension in the Brexit narrative is that British and European security can be protected by NATO alone. The former US secretary of state Condoleezza Rice spoke for many Americans when she concluded at Chatham House last year that the US would far prefer as its global partner an EU that includes Britain to a 'continental EU'. The fact is, whether under President Hillary Clinton or President Donald Trump, the United States will be focused increasingly on China and the Asia Pacific, and will expect its European allies to do more for themselves. This will leave NATO more as an insurance policy of last resort for Britain than as an institution capable of managing the full spectrum of day-to-day threats to European security.

Over the coming years, these threats will include Russian efforts to test the political and economic resilience of its European neighbours and the spillovers from continuing violence, instability and lack of opportunity in the Middle East and sub-Saharan Africa. Large-scale migration and the possibility of terrorist attacks will be perennial risks for the foreseeable future. As an EU member, the UK can improve the prospects for addressing these challenges to its own and Europe’s security. It can ensure that EU leaders do not waste time on devising meaningless new institutional structures but focus instead on building meaningful capabilities. EU mechanisms and, where appropriate, legal structures will be critical elements in strengthening British and European energy security, enabling data-sharing on terrorists and criminals, setting new standards for cyber security, and instituting border security at Europe’s edge rather than in its fields and railway stations.

Given the changing economic and political dynamics of the world beyond Europe, Britain’s national interests will be best served by continuing to integrate selected areas of policy-making with its EU neighbours. Conversely, the notion of recovering 'absolute' sovereignty by leaving the EU is worthless if it limits the ability of future British governments to ensure greater security and prosperity for their citizens.

This article was originally published in The Times Red Box.

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