Should Scotland be in EU if rUK out?

In a speech to the British Irish Chamber of Commerce in Dublin last week Nicola Sturgeon, Deputy First Minister is reported to have said:

"It is no longer fanciful to consider as real the possibility the UK is heading out of the EU. Let me state emphatically this is not a journey the Scottish Government wishes Scotland to be a part of, nor one I believe would be supported across the Scottish business community or wider civic society."

I have no sympathy with what Prime Minister Cameron is seeking to do re a referendum in the UK on EU membership. But if, hypothetically, the UK did leave the EU is Nicola Sturgeon correct in arguing that it is in Scotland's interests to stay in the EU?

I do not think the issue is as clear-cut as she pretends.

Take trade for example. The following chart, constructed from the recently published Scotland Global Connections 2011 highlights the importance of trade with rest of UK compared to EU trade.

Scottish exports to rest of UK are four times bigger than exports to the EU (ex UK). Moreover, the importance of rest of UK exports to Scotland is rising while the share of exports to the EU has fallen over the period. And that is after a 15 percent increase in the nominal value of exports to the EU between 2010 and 2011, taking the share from a low of 15 per cent to 16 per cent.

Given these data it would appear to be exceptionally foolhardy of any Scottish government to risk trade, investment and migration links to the rest of UK by staying in the EU if the UK left.

On the other hand, foreign investment and skilled labour immigration to Scotland from the EU and other countries could be damaged if Scotland left the EU. And, the impact of Scotland in-rUK out on Scottish trade might be softened if a free trade arrangement was negotiated by rUK with the EU.

So, it is not at all clear that in such circumstances staying in the EU would be in the best interests of the Scottish people. It would be by no means an easy decision for a Scottish government - if independent - and it is rather remiss of Nicola Sturgeon to present it as such.

Comments

[Edward Harkins]

Isn't this just a little bit of taking a static snapshot based on what has happened, and then assuming that that will be the continued pattern in what might be an epoch-changing period? Might not there be wholly new and powerful economic and trading dynamics arising out of a dismembered UK staying in the EU whilst an independent Scotland retained/renewed EU membership?

There seems, moreover, to be some growing scope for assuming that from here on in, the EU will gradually pull out of the current morass and then recover and grow at a a stronger and more sustainable rate than the UK. In that scenario, pro-independence parties could convincingly argue that 'better an independent Scotland within the renewing EU, than in a UK economy suffering long-term debility consequent upon the legacy of irresponsible Brownite economics and then Osborne's utter ineptness and devastating Plan A and Austerity'?

[Bruce Alexander]

This assumes that the rUK leaving the EU will have no effect on either's dealings with Scotland. Given the choice between a market of 400 million and one of 60 million I know which one I'd go for if it was a straight choice.