Non-EU Links by Prof Tim Congdon.

The EU has free trade agreements with non-EU members.

Indeed, the EU has recently concluded a free trade agreement with Japan. The agreement with Japan follows earlier such agreements with Mexico and Israel. None of these three is an EU member. Japan, Mexico and Israel are independent, sovereign and self-respecting nations. Their companies are not subject to Brussels’ directives and regulations, their courts are not subordinate to the European Court of Justice, their taxpayers are not obliged to fork out for regional development in Lithuania, Slovenia and so on, and they are not affected by the many other iniquities of EU membership. If the UK were to leave the EU, the EU would – almost certainly – want a free trade agreement with us, not least because the UK is a far more important market for European exports than any of Japan, Mexico and Israel. But – assuming that we have a free trade agreement with the EU – both our imports from the rest of the EU and our exports to them would be unchanged. The three million jobs would continue just as before.
Some people might protest that, if we left the EU, we would have no guarantee that a free trade agreement could be negotiated. In these pessimists’ view the other member states would discriminate against us, keeping out our goods and punishing our investments. This too is nonsense. International relations are reciprocal, and European nations want to be on good terms with us, just as we want to be on good terms with them. The salient fact here is the UK is a massive importer from the rest of the EU, such a massive importer indeed that we run a large deficit on intra-EU trade. If they tried to keep out our goods and punish us, they would suffer more if we retaliated by keeping out their goods and punishing them. They would end up the losers.
This is most unlikely, however, and we should avoid talking in such negative terms. It must be remembered that the continent of Europe does include nations that are outside the EU, notably Switzerland and Norway (and Turkey if it is regarded as European). These nations have close and friendly commercial ties with the EU. Outside the EU the UK will have equally close and friendly commercial ties with the EU. Over the years the UK will import hundreds of billions of pounds of goods and services from the rest of the existing EU membership, whether the UK is a member of the EU or not. Similarly, over the years the rest of the existing EU membership will import hundreds of billions of pounds of goods and services from the UK, whether the UK is a member of the EU or not.