Free trade but no more integration

UK businesses value free trade with other European nations, but are more likely to be sceptical or unsure about whether the current level of integration in the European Union is beneficial to their company’s prospects. The findings come from a survey (of over 7,500 companies) released by the British Chambers of Commerce.

When asked what kind of trading relationship they would like with Europe, over half of businesses surveyed expressed no opinion. Of those that did, 51% of exporters favour a ‘free-trade area’, versus 31% that support the concept of an ‘economic union’. Support for UK entry into a monetary union like the euro-zone stood at just 3.9% of all business respondents, showing the impact of the on-going Euro crisis on UK business attitudes toward the concept of a single currency. At the other extreme of the spectrum, just 4.4% of all respondents favoured leaving the EU and agreeing bi-lateral trade agreements with individual European countries.

Commenting on the findings, John Longworth, director general of the BCC, said: “It is not surprising that businesses want to see more free trade, but less integration across Europe. Companies tell us that the burden of European regulation and legislation is in danger of making them less competitive in the global market.

“Our results show that politicians must not be entranced by the ‘siren songs’ of either the pro- or anti-European camps. Less than one in every 20 companies responding to our survey holds either extremely positive or extremely negative views about our relationship with Europe. It is also staggering to see just how many businesspeople are unsure or unaware of whether links to the rest of Europe benefit them.

“Companies in the real economy want the Government’s European agenda to be practical and pragmatic. They also need better information about what Europe means for them. So ministers must push hard to remove barriers to free trade among European countries, and make the single market a reality for all businesses. At the same time, our representatives in Brussels must continue to fight all proposals that would slap additional costs or regulatory burdens on British businesses.”