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With UKIP set to increase further their share of the vote in the upcoming European elections, and Farage’s triumph over Nick Clegg in the televised debate late last month, the issue of EU membership is as heated and controversial as ever.  We are once more reminded of the strengths and limitations of a Common Market, and the anxieties the union has bred here in Britain.

At its best, the European Union has the capacity to foster more harmonious economic relations, encouraging stronger trade, greater efficiency and stimulating investment. When one considers that 100 years ago, Europe was descending into four years of bloody warfare, the change couldn’t be starker. Indeed, regional development funds have been particularly positive, providing countries in Eastern Europe, Southern Italy and the Mediterranean with funds for infrastructure projects and capital spending. Meanwhile, promoting the principle of trade liberalisation has assisted in creating millions of jobs, and has allowed the Ricardian principle of ‘comparative advantage’ to flourish.

For Britain, the Union has provided a huge market for exports, with 500 million customers demanding goods and services on our doorstep. As is often cited by pro-Europeans, 50% of British exports are destined to the European Union. While, undoubtedly some of our trade with non-EU countries is diverted by European tariffs, the opportunities available to UK exporters from membership have been strong. According to some measures this trade supports between 3.5 and 4 million jobs in the UK.
However, all is not well in the European Union.

Here in Britain, there are frustrations over the lethargy with which the EU has shown itself able to reform and adapt. A large and bureaucratic European budget, to which Britain is a net contributor, is increasingly becoming a source of resentment.

The more mercantile aspects of the European Union are a concern too. By promoting positive discrimination between member countries – through subsidies and external tariffs – the EU is effectively excluding non-member countries, particularly those in the developing world. The Common Agricultural Policy is perhaps the most tired aspect of the EU in this regard. Many of the subsidies made available through the CAP are directed towards wealthy landowners, who can buy entitlements. These landowners do not even have to farm the land to receive the subsidy.

Moreover, the global inequalities created by protectionism are shocking. The developed world injects around $300 billion every year into protecting agriculture, which is roughly six times the amount it spent on foreign aid in 2003. If we scrapped subsidies and tariffs on food, then the subsequent expansion of world trade would do much to raise living standards for developing world. This would be a sustainable way to alleviate suffering, cut food prices, and reduce trade distortion.

If the European Union does not adapt to the challenges it faces then the prospects going forward appear bleak. Reform must be guided by the principles of trade liberalisation, rolling back bureaucracy where it has become wasteful and meaningless, and driving competitiveness through higher investment and capital spending. These were principles upon which the union was first established, and must not be neglected or forgotten.