One of the more revealing passages in David Cameron’s speech on the economy yesterday was the section in which he talked about global trade.
When the Prime Minister talks about Europe and the eurozone, he exudes frustration and impatience. He would like to lead a discussion in Brussels about the kinds of reforms – liberalisation and widening the single market – that he believes are the prerequisites for growth. He must also know that building the alliances required to achieve those reforms and getting them approved by every EU member state will be diplomatic torture. Besides, there is still the small matter of the eurozone crisis to be resolved. A new digital services directive is not at the top of most European leaders’ priority lists. Cameron has no natural interest in or affection for the process of getting deals done in Europe and it shows.
By contrast, when he talks about the opportunities for British exports outside Europe he sounds almost evangelical. He talks about “coalitions of the willing” to press ahead with free trade deals. In Europe, he sees crisis, elsewhere he sees opportunity:
The globalisation of demand means new countries demanding our products, fuelling new jobs at home. If we make the most of this, there is a huge opportunity to secure a great future for our country. And that is why as we get through crisis, I believe we can look ahead with confidence.
In an essay for the magazine this week I mention the attention paid in Downing Street to arguments about the long term growth potential in Asia and Latin America as offering a potential alternative source of economic engagement to Europe. This “networked world” thesis – the idea that proximity should not be the arbiter of trade preferences – is a favourite of ultra-sceptics in the Tory party. It is generally dismissed by pro-Europeans as a fantasy that pays no heed to geography, history, culture or diplomacy. Eurozone trade was the only thing that stopped the UK from going into recession last year. Europe is the market of existential importance to our economy. And, crucially, there is no reason why the EU should allow Britain to retain all of its current trade privileges, while opting out of the various aspects of economic and political integration Tory sceptics happen to dislike. The scenario where we retain free access to the single market while unburdened/unprotected by EU regulation is a fantasy.
But I sense a growing suspicion at the very top of the Conservative party that the EU might be (a) in decline and (b) incapable of reform. One Downing Street advisor complained to me recently that Britain would have a much better bilateral trade deal with India if we weren’t shackled by the need to negotiate as part of the EU.
Current political and diplomatic reality demands constant engagement with Europe. But it is easy to imagine Cameron at a G8 or G20 summit feeling more and more irritated by his entanglement with the eurozone and contemplating that little bit more seriously the cost-benefit analysis of the UK going it alone.
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