British lawmakers are considering a bill that would authorize a popular vote by 2017 on whether the U.K. should leave the European Union.
If put up for a vote, there is a decent chance the measure could pass, considering that only 43 percent of Britons have a favorable view of the E.U.
What's at stake? Pro-exit politicians say that leaving the union would eliminate high membership fees, limit immigration, and free the U.K. from E.U. legislation. Many skeptics of a possible exit focus on what it would mean for trade.
"Let's be clear. Being a member of a reformed E.U. is the best way to preserve market access," said John Cridland, director general of the Confederation of British Industry.
Vince Cable agrees, writing in The Guardian that such a move would leave U.K. businesses on the outside looking in:
Leaving the E.U. thus means leaving behind the single market and the common external tariff, accepting the risk that a Britain might then face an array of tariff and non-tariff restrictions like the other "outs" — Turkey, say, or Ukraine.
One [response] is that sensible E.U. countries like Germany would hurry to create a reformed single market for the UK, without the regulations the British dislike. Well, they might. Or might not. They might not persuade the French. Or they might, in the course of time, when they have completed other business, including similar arrangements with more important partners like the United States. [The Guardian]
Clive Crook, however, argues in Bloomberg that if the U.K. can't negotiate more favorable terms with the E.U., leaving wouldn't be the end of the world:
As free trade becomes the global norm, the benefits of open access to Europe's markets are less and less confined to EU members. Cameron, visiting President Barack Obama in Washington this week, discussed the proposed U.S.-EU trade pact, among other things. The U.S. has signed free-trade agreements that span the globe. The U.K. could do the same. [Bloomberg]
Former Tory Chancellor Nigel Lawson, in a much ballyhooed column in The Times of Britain, echoed the argument that global trade would more than make up for loss of access to the single market of the E.U. and that businesses would be liberated from restrictive E.U. regulations.
Robert Peston, business editor at the BBC, doesn't agree: "Those who run our biggest companies would tend to be horrified at the idea of withdrawal from the E.U."
That sentiment is shared by Roland Rudd, chairman of pro-business group Business for New Europe, who released a statement denouncing the idea that the prospect of trade with Asia and other emerging markets makes membership in the E.U. irrelevant:
The economic costs of leaving the E.U. would far outweigh the gains. Almost half of our exports go to the E.U. and if we left we would lose the tariff-free access that they enjoy.
[Lawson] is right that we should export more to emerging economies, but one of the straw men of this debate is that it's somehow one or the other, or that the E.U. stops us from doing that. Germany's exports to BRIC countries have shot up and the reality is that the collective bargaining power of the E.U. is crucial, and not a hindrance, in that regard. [The Guardian]
Most E.U. leaders, such as German Chancellor Angela Merkel, would prefer the U.K. stay. The earliest the referendum bill can be debated on the House floor is July 5.
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