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Brexit would be ‘disastrous’ for UK trade and investment

If Britain left the EU, firms would be forced to pay tariffs and many would simply relocate to another part of Europe – warns Derek Vaughan MEP

It was pleasing to see the United Kingdom’s main business group, the Confederation of British Industry, admit earlier this month that Europe’s single market is ‘a great British success story and the best way for us to remain a leader on the world stage is from within the European Union’. The European market is the world’s biggest and that is important because its size can be used to broker agreements with new markets. Some 88 per cent of potential exporters state that their key target market is the EU.

That is why by negotiating trade agreements as part of the world’s largest single market bloc, the UK is able to get much better terms and access than it would if it were negotiating by itself. This will be essential in future, as we will increasingly be relying on trade with emerging economies like China and India.

The EU already has 30 free trade agreements including with key emerging countries such as South Korea, Turkey, Singapore, Mexico and South Africa. Negotiations are ongoing with Canada, India and the members of South America’s leading trading bloc Mercosur. And we are in the midst of brokering a trade agreement with Japan which will streamline access to this key consumer market for British businesses.

And let us not forget the extent to which the UK depends on export markets within the union. Many people do not realise the sheer volume of goods that we sell to other European countries. It is a huge market and we are exporting almost every product you can think of from cereal, cork, petroleum and transport equipment to footwear.

In 2012, we exported more than £2.6m in beverages alone to EU countries. We also exported £12.2bn worth of medicinal and pharmaceutical products and more than £1.3bn in meat products. This trade supports millions of British jobs and keeps thousands of UK businesses afloat. It is also a market with huge potential for growth over the coming years.

There are around 100,000 British businesses selling to EU countries and if we left the union, they would just have to sit back and accept whatever regulations were made in Brussels by other European countries. It is no good saying outside the EU we could still have a trade agreement with the union similar to Norway. Any agreement would take years to negotiate and, like Norway, we would have to pay to be members of an agreement but would have no say in the rules.

It must also be said that a key draw card for foreign businesses to invest in the UK is easy access to the EU market. In Wales, more than 600 firms across the country export goods and services worth around £5bn every year, tariff free, to other EU countries. If we left the union these firms would be forced to pay tariffs and many would just relocate to another part of Europe.

In Wales many companies including Airbus, Ford, Tata, Toyota and 3M Gorseinon would reconsider their investments. The implications of this would be disastrous. We could lose thousands of Welsh jobs with these companies alone and that is without including those that would be lost in the supply chain such as manufacturing, catering, cleaning and local retail jobs. This is why the very idea of Brexit, promoted by UKIP and Tory backbenchers, is so dangerous. We cannot and must not risk this partnership, and the economic benefits that come with it.

Derek Vaughan is a Welsh Labour Party MEP

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