Here's another thread from @DerrickBerthel1 (Derrick Berthelsen) - this time looking at economic analyses which attempt to calculate the benefit of single market & customs union membership for the UK.
1/ People are getting hot under the collar about economic forecasts when we all know how dreadful a record Economists have at forecasting - the only function of economic forecasting being to make astrologers or weathermen look respectable and all that.
2/ A much more sensible, and I would think less contentious way of trying to work out the potential effect on economic output of leaving the single market and customs union should be to look at how much economic experts calculate the UK has gained as a member of the SM and CU
3/ After all, analysing actual events that have already occurred should be a darn side easier than forecasting what could happen to millions of different variables in the future.
4/ There have been lots of reports on this, but the National Board of Trade in Sweden below is a great place to start as they compared over a dozen different analyses to see how much the single market and customs union has added to EU GDP.
5/ To quote the report’s author Erik Dahlberg “The single market has been a significant enabler for economic growth in Europe. Since the methodologies differ across various analyses, comparisons are not easily done, but 2-4 per cent seems to be in the ballpark.”
6/ However, the benefits have not been uniform.
7/ In its 2014 report The Bertelsmann Stiftung introduced a new method on how to account for the counterfactual scenario of ‘no single market’.
8/ Its central finding was that increased integration of one EU index point generates a 0.08% increase in economic growth.
9/ Using this figure, it compared the actual GDP per capita in 2012 to a counterfactual GDP per capita, assuming that each country’s European integration would have remained at its 1992 (pre-single market) level.
10/ It found that the single market had been most positive for Germany (+2.3%) but that the effect on the Greek economy had been negative (–1.3%) – no surprise there then.
11/ As for the UK, membership of the single market and customs union had benefited the UK by an additional 1.0% of GDP.
Not 1% per annum. 1% in total.
12/ That benefits have not been uniform across the EU should not come as a surprise. All analysis of the single market shows that the biggest benefit has been an increase in internal EU trade in goods.
13/ Indeed, the UK is unusual as a member of the EU because it exports more to non-EU than to EU countries.
14/ The UK is also the member state with the lowest trade integration in the single market for goods. (See EU internal market scoreboard)
15/ Plus, of course the UK is a much more service-based economy than the rest of the EU and as the EU itself admits there is no ‘single market in services’ in any meaningful sense of the term. (See Open Europe blog)
16/ So, if the single market and customs union have only added 1-2% to the UK economy at best. Why would economists forecast that in the long-term economic growth would fall much more than that?
17/ Sure, there may be some short-term disruption effects on growth, but in the long term, why should UK GDP lose more from leaving the single market and customs union than it gained as a member?
The actual economic FACT not FORECASTS suggests that leaving the SM and CU will have only a marginal effect on UK GDP in the long run and thus that this alone is not a good reason to fear even a No Deal Brexit
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