Press Release, 29th May 2007

GLOBAL VISION SAYS BRITAIN MUST CONTROL FUTURE TRADE POLICY IN ORDER TO PROSPER

A new paper written by Ian Milne for Global Vision shows that, based on the latest UN projections of working-age population, the UK's exporters will have to look outside the European Union for future growth markets.

Beyond 2015, demographic projections are one indicator of countries' future growth in GDP and hence propensity to import. A good proxy for the productive potential of the population is 'WAP' – working-age population – defined by the UN as those aged 15 to 64: the part of the whole population whose work and incomes provide for children at one end of the spectrum and for old-age pensioners at the other, and which accounts for the bulk of an economy's consumer spending. The just-published projections of WAP from the UN are a useful 'broad-brush' predictor of where export growth is likely to come from after 2015.

Based on the UN projections, in future EU countries, with one or two exceptions, will be shrinking export markets. Europe is the only continent on the planet that will suffer a drop in its working-age population over the next four decades, and, consequently, a drop in its GDP and in its propensity to import. All other continents will experience growth in their working-age populations by 2050.

The EU's export market as a whole, especially continental EU (EU27 less the UK and Ireland) will be shrinking – losing 59 million in WAP by 2050, more than the entire present-day WAP of Germany. EFTA, NAFTA, and the 54-country Commonwealth will all gain working-age population over this period. However, the UK's individual WAP will increase by 1.3 million and 96 per cent of global WAP will be outside the EU26 by 2050.

Ian Milne said, "The demographics torpedo the claim that the UK 'needs' to be in the EU for trade reasons. When it comes to growth of UK exports, the action's going to be outside Europe."

Ruth Lea, Director of Global Vision, commented, "This research highlights the vital importance of the UK recovering control of her worldwide trade policy, which she gave up to the EU when she joined the EEC (the EU's predecessor) in 1973."