Splendid Isolation?

LONDON – Membership of the European Union has shackled Britain’s economy to a corpse. The United Kingdom has been bound by swaths of costly red tape to a bunch of moribund economies with no growth prospects. As a result, UK exporters have been held back from the fast-growing markets of the Commonwealth and the developing world.

That, in a nutshell, is the view of British euroskeptics, and it has gained considerable force in the past few years of Europe’s slow-motion crisis. The facts, however, tell a very different story.

A new study by the Center for European Reform (CER) asks the question: What is membership of the single market actually worth to the UK? The standard answer is that close integration with the rest of Europe brings access to a market of more than 500 million people and injects healthy doses of competition and investment into the British economy, helping to raise productivity.

The CER has taken this analysis a lot further, by measuring UK trade with countries inside and outside the EU and adjusting the results for economic size and other factors that affect trade, such as distance to markets. On this basis, one can work out whether British trade with other EU countries is higher or lower than one would expect, given the size and location of their economies.