Tuesday, 21 December 2010

The European Union’s destructive plan to End bilateralism and the right of States to have trade and investment policy.

The EU’s new investment policy, permitted under the Lisbon Treaty, will end the ability of the UK to negotiate bilateral investment treaties and related trade deals on its own. It will thus stop us from negotiating with other states to lure businesses and services to the UK, and selling the bonus points of the UK as a place to invest. It will thus result in a severe decline of foreign investment, which provides much needed employment in poorer areas of our country.

When this policy becomes an EU Regulation it will prevent any member state having a preferential investment and trade agreement over another. Thus, if the UK has a better investment agreement than Germany with India, it will nullify that advantage. Following the successful passage of the regulation all investment treaties will only be able to be signed by the EU. Bilateral trade agreements will follow suit. All foreign investment policy will then be exclusive competence of the EU.

This is the end of sole control over foreign trade and investment policy for the UK and any related trade advantages it has in the global market over the EU and other states. As these agreements are reciprocal, it will significantly undermine Britain's competitiveness in the global market as the UK will no longer have control over protecting its businesses overseas. This also means that if non-EU states do not sign an investment agreement with the EU, British businesses will have no protection as Britain will not be able to sign any investment treaties on its own. British business will either then avoid those states, resources and markets or go there under serious risk that their business will be nationalised by the state. Thus some businesses may cease to trade overseas as a result of lack of protection that investment treaties provide.

Because the UK will no longer be able to have a bilateral investment treaty (this is a reciprocal agreement for both states to encourage and protect investments) the same investments that would normally come to the UK would now go anywhere in the EU. We would not be allowed to give any preferential treatment to lure businesses here, and as a result it would mean the end of the policy of foreign businesses to come in to deal with unemployment.

It is likely that the EU will then legislative to send these businesses to the more needy or other parts where it is cheaper to make the EU to attract them.

A definite loss for the UK as our unemployment does not match those of other parts of the EU nor do we have the cheapest platform from which businesses can operate. The foreign direct investment economic stimulus will be done on an EU wide basis and not on a national level.

It remains extraordinary that so many members of the leading political parties were blind to the enlargement of EU competence in Lisbon to investment and what the effects were likely to be.

Copyright Abhijit P.G. Pandya 21.12. 2010
Copyright Birkenhead Society 21.12.2010.

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