I am pleased to host another student guest post, this time by Jong Beom Park. This is the 18th student guest post this semester. You can see all the student guest posts from my “Monetary and Financial Theory” class at this link. This is Jong Beom’s 2d guest post. His first is “The $28 Trillion Per Year Woman: Benefits of Full Participation of Women in the World Economy.”
Britain will make arguably one of the most substantial decisions in its long history before the end of 2017. As the Tories were re-elected in May 2015, the British Prime Minister David Cameron has declared to hold a referendum whether to remain in or leave the European Union (EU) by 2017, and that day is approaching fast. Cameron’s intention may be to renegotiate its terms with the EU and thereby convince the British public to favor the current state, he is facing a tough opposition domestically from Eurosceptics, led by a money-loaded lobbyist group. Their main argument is that Britain would be able to form new trade relationships outside the EU, while still being able to trade with EU nations, and form its own social and employment laws all without the membership of the EU. But, I would like to argue that the United Kingdom can benefit, both economically and politically, more by remaining in the EU.
From the start, Britain’s road to the EU was rocky. Instead of joining the European Coal and Steel Community (ECSC) when it was first founded in 1951, Britain formed its own trade union, the European Free-Trade Association, with six other smaller countries. Because they were more fortunate economically than other countries in Europe after WWII, Britain had no reason be in a customs union with other European powerhouses, such as Germany and France. Well, in my opinion, now they do. Although its initial intention may have been purely economic, Britain today also attains security benefits from the EU in midst of the migration crisis and recent terrorist attacks in Paris.
First, to fully understand Britain’s reliance on the EU for its overall exports, look at the figure at the top of this post. As shown in that the figure at the top, Britain exports more than half of its total exports to the EU. Although it would still be able to trade with EU countries without the EU membership, like Switzerland and Norway, Britain would trade 55% more as a member of the EU, according to John Springford of the Centre for European Reform. The EU would inevitably place more restrictions on Britain in trading with its EU members if Britain exits. Eurosceptics argue that Britain could better exploit additional trade opportunities with non-EU countries and use the required budget for its EU membership in the development of new industries. Nonetheless, in my opinion, the possibly of these new benefits without the membership of the EU does not outweigh benefits that Britain is already claiming.
Moreover, in addition to economic benefits, Britain is also enjoying security benefits, especially in the current state of Europe. Today, Europe is more or less in a security turmoil after a series of deadly terrorist attacks in Paris, France. As a nonmember, Britain would have had no role in discussing and collaborating on security measure. Domestic Eurosceptics claim that the EU has a limited influence on Britain’s security because “principle guarantor [of European security] for 70 years has been the North Atlantic Treaty Organization.” Even so, Europe as a whole is facing tougher challenges today than ever before. Following the terrorist attacks in Paris last week, EU, separately from NATO, promised a collective action by the member states, possibly strengthening the EU borders and retaliate against responsible terrorist organizations. In addition, more control over employment and social laws can be achieved without leaving the EU. For member states of the EU, most of their national regulations have been collapsed into one supranational regulation. However, as David Cameron demanded in his letter to the President of the European Council, Donald Tusk, Britain would still be able to fight for more of its own control without leaving the EU. If Britain could retain some control over EU regulations as the EU takes up on Cameron’s demand, it would be an ideal situation for Cameron and pro-EU campaigners at home.