If Britain were not in the EU, we'd have signed a free trade agreement with the United States years ago. And with the rest of the Anglosphere. And, for that matter, with large tracts of Asia, Africa and South America. We are a mercantile people. Our island has few resources, and our inclination down the ages has been to buy and sell without hindrance. A hundred years ago, the United Kingdom had lower tariffs, on average, than it is obliged to apply today under the EU's common commercial policy.
Euro-grandees often tell us that the European single market is largely a British creation, a lasting demonstration of how much more influential we are in Brussels than we think. That has always struck me as a self-defeating argument. If they're right – if the single market wouldn't have happened without Britain – the implication is that the natural tendency of the other members is toward protectionism. If dissolving our economic policy into the EU made the Continent's economy more open, it surely made ours less so.
Ah, say the Euro-enthusiasts, but you can't get free trade deals on your own. You need to come to the table in strength or the other side won't be interested. That might sound plausible, but it turns out to be quite untrue. Small states are the most vigorous dismantlers of barriers. The two most open and competitive economies in the world, according to the current Index of Economic Freedom, are Hong Kong and Singapore.
During the 1990s, Estonia followed a similar course, scrapping tariffs and subsidies and slashing taxes. The strategy worked: growth and investment surged. But the EU was horrified, and made clear to Tallinn that it would have to have a more regulated economy to meet the EU's acquis communautaire. At midnight on 1 May 2004, the day it joined, Estonia was obliged to apply tariffs to 14,000 goods which had previously entered the country tax-free.
On any measure, Switzerland has a more liberal trade policy than the EU. In the vast majority of cases, when the EU signs a free trade agreement with a non-European country, Switzerland simply tags along, replicating the deal clause-by-cause. But when the Swiss feel that Brussels is being unduly protectionist, they are free to go further. They have, for example, signed a free trade accord with Canada, and are negotiating one with China. For Britain, the opportunities would be greater still, because a far higher percentage of our trade is with non-EU states: 56 per cent, as against 26 per cent for Switzerland.
Don't get me wrong: an EU-US free trade deal is enormously in the interests of all participants. Such a deal has been the goal of every British government since we joined. I remember Leon Brittan announcing his intention to secure one when he was trade commissioner, and Malcolm Rifkind saying much the same when he was foreign secretary. It is possible that the scheme will finally succeed – subject, no doubt, to various exemptions and distortions. Indeed, I shouldn't be surprised if the PM has something to say about it in his speech.
While a transatlantic free trade deal is desirable and timely, its agreement if anything slightly weakens the case for British membership of the EU. If Brussels is signing comprehensive free trade deals with the United States, Turkey, Switzerland, Mexico, Peru and so on, it becomes harder and harder to pretend that it would tear up an existing free trade deal with the United Kingdom. It is becoming clear that, in every realistic scenario, Britain remains a member of a European free trade area. The question is whether to belong to a European state.