April 2016: Pre-Referendum Statement

MercatorGear Statement before the EU Referendum (23rd  June 2016)

The view of a small, politically unaligned, trading business

MercatorGear.com is a small UK-based company which imports KOVEA brand specialist backpacking stoves from South Korea to the UK. We sell them to adventurers in the UK and the rest of the EU. We can do this because the European gas safety regulations sets the same very high standards for gas stoves in all EU markets. These rules were negotiated by all member states including the UK. MercatorGear.com supports remaining in the EU because this EU-level regulatory framework makes it easy for us to import from outside the EU, and to sell products across the EU.

Our trading activity generates tax revenue for the UK. If we leave the single market, exporting to the EU would be more difficult, we would eventually have to deal with different gas safety regulation to those in the UK. Our ability to contribute tax revenue to the UK would be diminished.

We also use EU regulations to successfully challenge unfair trading practices of multinational companies. Without EU membership, MercatorGear.com would find it more difficult to compete with powerful multinationals, and to provide top quality and extremely safe KOVEA stoves to the UK and European market.

Leaving the EU would not make our business with South Korea any easier, but would add significant financial and bureaucratic costs to our activities. It would make it more difficult for us to provide great products to adventurers in the UK and the rest of Europe.

If the UK leaves the EU, KOVEA Co Ltd will be more likely to base its future European distribution centre within another EU member state. This would be a great shame, and the UK would lose this future investment, future jobs and future tax revenue.

By importing from South Korea, and selling specialist backpacking stoves throughout the EU we are benefitting from, and protected by, EU regulations. This enables us to generate wealth and value for the UK. The European single market represents a massive opportunity for small companies like ours which make up the backbone of the UK economy.  From our own practical experience of doing international business, it is very clear that to tear up the rules of the single market would be a mistake of historic proportions for the UK. And a mistake based on ignorance.

What we think about other reasons given to leave the EU

“New Opportunities to Trade outside the EU“: The UK already exports outside the EU, but we could do a lot more. Any shortfall the UK may have in exporting products reflects the structure of the UK manufacturing base, our skills base and the level of government support for exporters. The government of France and Germany help domestic manufacturers to exports to China, India, Korea, Japan and many other important global markets. BMW, Mercedes, Louis Vuitton and Danone do not seem to have a problem trading globally. It is sometimes difficult for politicians to admit, but the deficiencies we have in exporting are often home grown and not a result of the EU holding us back.

“Control Immigration“: We recognise that some people in the UK are genuinely disadvantaged by immigration from the EU, particularly those without the skills to compete in the job market. We think the UK government has a responsibility to these individuals to provide training, apprenticeships and on-going education to help them to get on, and to contribute to the economy and broader society.  Withdrawing from the EU would permanently reduce future employment opportunities for those who are currently losing out, by weakening the economy and reducing future inward investment. The solution is to raise our own skills to the needs of employers, and to encourage investment, rather than keeping out migrants.

“The threat of population growth & overcrowding“: When handled correctly, population growth is an asset, not a liability. In 1800 the population of Britain was 10 million and wealth was very unevenly distributed. Today the population is six times larger, we are much better off, we have more leisure time and we all live much longer. Stresses such as poverty, innequality and overgrowding in modern Britain should be addressed though UK government policy towards housebuilding, provision of schools and training, and other public services.

“We want to Make our own decisions“: In reality, we live in an increasingly interdependent world and this is a very good thing. Trade is not a “zero-sum game” and we all benefit from the rules of a free trading system either directly from cheaper products, or indirectly from a growing economy. Once we start to cut the strings of interdependence, trade barriers and restrictions on our own movements will be an inevitable consequence. We will be less interconnected, less influential and less able to influence the European and global trading system. We would ultimately have less ability to make our own decisions as the rump-UK would be subject to the decisions of much larger and more powerful economies like the US, EU and China.

“The Remainers are Scaremongering“: We find this accusation particularly troubling. Casually dismissing the integrity and motivations of a huge number of highly experienced economists, business people, academics and international institutions without engaging with the arguments, is a tactic from a dark period of history. To make a good decision, voters need to understand the technical arguments on both sides and weigh them up rationally. We don’t dismiss the expertise of aeronautical engineers because they have an interest in building planes. Diminish the views of experts, and you are left with uninformed and irrational decision making, leading to bad and dangerous decisions.

“We will negotiate better trade deals after Brexit”: This claim does not stand up because it is impossible to tell what the negotiating positions of the other parties would be post-Brexit. Negotiating a better deal is a fine aspiration, but that is all it is; and aspiration. It is deliberately misleading to present this as an alternative to full access to the the single market. It would be more truthful for Brexiters to say “We aim to negotiate a better trading deal, but as it is impossible to predict the outcome, and we may well end up with a worse one.”

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The EU is not perfect. Neither is UK government policy. Faults of one should not be confused with faults of the other. The EU referendum is an enormously important decision which must be taken seriously and on the basis of informed analysis. On our analysis and based on our practical experience of conducting international business in and outside the EU, the benefits of remaining massively outweigh the often misleading and uninformed arguments put forward for leaving.

We at MercatorGear.com urge anyone with a vote, to consider the pros and cons, to reject irrational and misleading arguments (wherever they find them) and vote to REMAIN on 23rd June 2016.