Tuesday, 9 February 2016

This is not evidence that a Brexit would help UK exports...

We have gleefully shredded many of the non-arguments put forward by the Remainers. In the spirit of fairness, it must be said that some Leavers are making the same mistake (i.e. putting forward arguments that are so feeble that they make you suspect that the opposite view is correct).

One that popped up again in yesterday's City AM (I can't find it online) was that the non-EU countries Switzerland and Norway export more per capita than the UK does. (I can't remember whether this was to the rest of the EU or rest of the world, not that it really matters)

Well duh.

This has nothing to do with the fact that Norway and Switzerland are not in the EU, it is simply because they are small countries (measured by population or economy). Logic and observation tells us that the smaller the country, the higher the value of imports and exports per capita (try imagining that your town was a separate country).

The list at Wiki shows the following in USD:

Liechtenstein 122,193 (2011)
Switzerland 40,250 (2011)
Norway 32,760 (2011)
Belgium 30,209 (2011)
Ireland 25,652 (2011)
Iceland 21,500 (2009 estimate)
Austria 20,424 (2011)
Denmark 20,000 (2011)
Sweden 19,687 (2011)
Germany 18,865 (2011)
Slovenia 16,640 (2009 estimate)
Slovakia 14,570 (2009 estimate)
Czech Republic 12,590 (2009 estimate)
Finland 10,766 (2009 estimate)
Hungary 10,700 (2011)
Estonia 9,820 (2009 estimate)
France [2] 8,989 (2011)
Italy 8,750 (2011)
United Kingdom 7,582 (2011)

Lithuania 7,250 (2009 estimate)
Spain 6,596 (2011)

I can't be bothered plotting a graph of exports per capita against actual population again, but you get the gist. Germany sticks out like a sore thumb, but exporting is their national religion.

The other four large EU member states are, as one would expect, bunched together at the bottom of that list. Dunno why Lithuania is so low down and going by population alone, Iceland ought to be higher up, but it's bloody miles from anywhere, and nautical miles at that.


Mark Foster said...

Okay, first off I'm quite sure if we left and enacted the right economic reforms the UK would be more than fine but... putting aside the many other valid democratic reasons for leaving and bearing in mind we are stuck with a dismal Tory government for the next 4 years (at least) brexit or not, how would you expect the short term costs vs benefits of a brexit actually work out for the UK?

Mark Wadsworth said...

MF, that is the question, isn't it?

Would a current or future UK government implement "the right economic reforms"? Neither is likely to replace taxes on earnings and output with LVT, so nothing major will come of it, but of all the stupid things which UK governments have done, the EU has never acted as a brake, in fact it has encouraged it (high VAT, bank bail outs, Human Rights Act, blah blah blah).

And there are some sensible things which either Labour or Tory wanted to do which the EU prevented. So all in all, barring inevitable short term frictions, leaving the EU would be a small overall positive (not just in economics, there is plenty of other crap like the CO2 taxes shutting down heavy industry, coal fired power stations and so on).

DBC Reed said...

Bear in mind that at its inception the European project was meant to provide an internal market of hundreds of millions of people all at comparatively the same wage levels with no need for exports at all.