Letters | 24 September 2011

Euro bonds

Sir: In your leading article, ‘A new deal with Europe’ (17 September), you argue that as Brussels will not agree to radical reform and massive deregulation, the only remaining options are to renegotiate our membership of the European Union or ‘pull out entirely’. However, we must be clear that unilateral withdrawal is out of the question. Over half the UK’s manufactured exports to the EU would face zero tariffs whether we were in or out of the EU. But if the UK left the EU without any new preferential trade agreement the remainder would face an average EU tariff of over 5 per cent, a decisive handicap in many price-sensitive markets. In particular, the vital UK car manufacturing sector would face EU tariffs of 10 per cent. This would place Honda, Nissan, Toyota (UK), BMW (UK) and Jaguar Land Rover at an unacceptable competitive disadvantage in the deeply integrated European car market compared with their present position.