As we celebrate Independence Day on July 4, we can send a cheer across the pond to the British, who declared independence from the European Union on June 23.
For the British, that means no more tax and regulatory harmonization without representation. Laws passed by Parliament will no longer have to be EU-compatible. It even means they will be able to keep their high-efficiency kettles, toasters, hair dryers and vacuum cleaners.
As just one example of the absurdity of EU regulation, vacuum cleaners with over 1600 watts were banned by Brussels in 2014, and those over 900 watts are scheduled to be phased out in 2017. Brussels bureaucrats say that these vacuum cleaners use too much energy.
No matter that the additional energy cost of a 2300-watt vacuum cleaner compared with a 1600-watt model is less than $20 a year, that it takes more time to vacuum with a low-energy model, and, most important, people should be able to choose for themselves how they want to spend their time and money. I, for one, prefer less time housecleaning. Global markets are already recovering from their weekend plunge as they absorb the implications of the "Leave" vote that experts said would not occur. But the effects of Brexit on global growth depend on how fast the U.K. government can renegotiate its position.
Some suggest that the British economy would be more stable if it stays in the EU. But the EU itself has massive economic problems, with a growth rate of 1.4 percent, underfunded public pensions, and bloated welfare obligations. Its lack of control over its borders has resulted in over a million refugees and economic migrants, some of whom are linked with the Islamic State and are planning terrorist attacks. Under EU law, all have to be housed and fed at EU taxpayer expense. This is no recipe for stability.
Europe has everything to gain by keeping its level of trade with Britain, and doing otherwise would be cutting off its proverbial nose to spite its face. Britain has a large net trade deficit with the EU, buying a large share of European exports. German automakers would be worse off if the Brits were prevented from buying BMWs, Volkswagens (even with their defeat switches), and Mercedes Benzes.
British trade with the United States could increase, as well as trade with former commonwealth countries such as Australia, New Zealand and Canada.
British consumers would benefit from abandoning the EU's Common Agricultural Policy, which costs the EU $64 billion annually. British farmers receive about $3 billion a year from the scheme.Agriculture Minister George Eustice said earlier this year, "The truth of the matter is if we left the EU there would be a [$24 billion] a year Brexit dividend, so could we find the money to spend [$3 billion] a year on farming and the environment? Of course we could."
The most likely outcome is that Britain gets the status of Norway and Switzerland, members of the European Economic Area. Under this system, Britain would get access to the EU markets in exchange for a payment to the EU. For instance, Norway pays about two tenths of one percent of its GDP to Brussels.
The biggest loser from Britain's exit from the EU is the EU itself. Other countries are going to want to leave. We already hear of Frexit and Czechout, and others would want to follow.
Two hundred and forty years ago we declared independence from Britain. We should remember that all countries want to be free of international government bureaucrats — not just the U.K.
This article originally appeared on the Washington Examiner.
Diana Furchtgott-Roth is a senior fellow and director of Economics21 at the Manhattan Institute.
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