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Saturday, May 28, 2016

The job losses that cannot be fixed if we leave the EU

Most of the economic arguments around next month's referendum have centred around the impact on trade if we leave the European Union. That is understandable, after all we are part of the biggest free trade area in the world and benefit tremendously from that. Leaving will put us on the wrong side of some significant tariff barriers and as a result our economy (and public finances) will take a big hit.

Of course we can negotiate new trade deals, but what the Brexiteers do not tend to dwell on is how long it will take us to do that, nor the fact that we will have to negotiate large numbers in mind-numbingly detail. They also fail to mention that any trade agreement with the EU will involve us paying substantial sums to Brussels once more and the sort of freedom of movement of labour that his getting them all worked up in the first place. It is a lose: lose situation.

The other side of this argument is what will happen to companies who have set up here so that they can benefit from being inside the free trade area. Surely, they will up-sticks and relocate abroad if we leave. After all, what reason do they have to stay?

That argument lies at the heart of this article in the Western Mail. They report that diplomats working in at least one Embassy in London have been ordered to draw up lists of foreign investors in the UK who could be lured away if there is a Leave vote in the EU referendum:

A spokesman for Wales Stronger in Europe said: “Welsh exports to Europe are worth £5bn a year – we’re one of the only regions of the UK which actually has a trade surplus with the EU.

"Overall, it accounts for 40% of our exports. But for some areas its even more: 93% of lamb, 35% of sheep, 92% of beef and 98% of dairy exports went to the EU. That’s Welsh beef exports of £52.3 and Welsh lamb exports of £122m.

“The EU imposes an average tariff of 14% on agricultural imports from non-EU countries, with higher rates on individual items. Outside the Single Market, dairy exports to the EU could attract a 36% tariff, and tariffs on beef exports could be between 58% and 70%.

“Both the FUW and NFU Cymru support calls for Britain to remain in Europe, in order to retain access to the Single Market, which accounts for 90% of Welsh agricultural exports – worth £300m a year, and to protect the £240m a year in CAP funding, vital to the type of farming we see across Wales.”

It is little wonder that other countries think they can poach British jobs if we leave.

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