The European Union has just released a video comparing the European Union to the federalised structure of the United States. Given President Obama’s recent suggestion that Britain must stay in the European Union, I’ve written an open letter wondering what it would be like if America had to be part of an EU-like structure…
Dear President Obama,
I see you’ve told the United Kingdom that you should stay in the European Union. Politics is all about trying to understand other people’s point of view, so I’m going to try to make it easy for you to understand mine. Put yourself in our shoes, and let’s imagine together what it would be like if America had a fully-fledged equivalent to the European Union.
You could forget the US Constitution. The Republicans claim you forget it anyway, but the pan-American Union would be able to pass laws to override America’s. Your Supreme Court would be allowed to keep the name but would no longer be in any way supreme; new pan-American courts would be able to overrule it – and they would, on a regular basis.
You’re debating at the moment how best to police the border with Mexico. If you had a Union like ours, the answer would be very simple. To get into the United States and have the right to live or work there, all you’d have to do would be to show a Mexican passport. Or a Venezuelan, Argentinian or Canadian passport. Even if they had criminal records, it would be very difficult – bordering on impossible – to say no. To give some idea of the scale we’re talking about, we had more immigration in the year 2010 alone than in all of the years from 1066 to 1950 put together. Imagine the social welfare bill that you’ll create: lots of American workers will lose their jobs because they’ll be undercut by the huge oversupply of migrant labour. The only upside is that it would annoy Donald Trump. A lot.
Actually that’s pretty much the same excuse the British Labour Party gave to voters. Lord Mandleson described it as sending out ‘search parties’ for new immigrants, and one of Tony Blair’s (George Bush’s mate, remember?) advisers said they were doing it to ‘rub the Right’s noses in diversity’. Guess what? Labour have lost the next two elections.
Because you’re a relatively prosperous nation, you’d have to pay in more than you get out. It’d be costing you about $1,750 per year for every family of 4 in the USA. Well, that’s what we’re paying in Europe. As you’re relatively economically prosperous you’d probably have to pay more actually. Then you’d get roughly half of that money handed back to you in ‘grants’. They’d tell you that they were giving you money, expect you to be grateful, and you’d have to take every opportunity to thank them for their overwhelming generosity.
Whilst we’re on the subject of money, I know Americans are very keen on their petrol (you call it ‘gas’ but it’s clearly a liquid to us) prices. Motorists at the pump are paying about $2.60 per gallon today in America. You’ll have to introduce a new fuel tax of at least $1.55 per gallon. Then, on top of the whole price of the fuel, you’ll have to add an extra sales tax (we call it VAT, and your bureaucrats are going to just love it, but more of that later) of at least 15%. By the time you’re done, I’d say that American motorists would have to pay at least an extra $2 a gallon. I don’t think your motorists would like that, but you might try to confuse them: you won’t be measuring fuel in gallons any more, you’ll be measuring it in litres. There’s no choice about it, you’re also going to have to convert to the metric system of measurements. So that it doesn’t confuse people in Paraguay.
In America, the highest Sales Tax is in California at 7.5% but five states have no Sales Tax at all. You’ll have to raise that to a minimum of 15% in Value Added Tax. But you know how a Sales Tax works, right? At the point of sale to the consumer, you charge the tax. VAT is a little more…complicated. At every stage of the manufacturing process, when you go from manufacturer to wholesaler, wholesaler to retailer, you charge VAT. Every time it’s sold on, businesses can reclaim the VAT they’ve paid and charge it to the next business in the chain. It can be paid and reclaimed five or more times until finally the customer pays their tax. Think that’s a recipe for fraud? It is. Think it adds massive red tape and makes your businesses uncompetitive? It does.
You know that trade deal, TTIP, that you’re currently negotiating with Europe? The one that’s causing all the stir about secret courts and opening the British NHS up to competition? Well, you can forget negotiating that trade deal on your own. You’d have a pan-American trade chief to negotiate your trade deals for you. Not in America’s interests? Sorry, but it’s that deal or no deal.
New pan-American laws would override your own. Forget whether they’re actually needed in America or not. And all US businesses would have to abide by those laws, whether they traded outside the European Union or not. You’d get a new ‘Parliament’, but it would have very few actual powers. For arcane reasons no-one would quite be able to understand, once a month every month – regular as clockwork – it would pack its bags and move itself backwards and forwards between Chile and Brazil. The real power would lie with unelected bureaucrats. Despite America being a world power, you’d have one Commissioner just like any of the tiny countries in the continent of America.
You’d get a new anthem, a new flag to fly over your government buildings, and your soldiers would be allowed to fight and die under that flag. Foreign-flagged vessels would be welcome to fish your waters and you’d have an agricultural policy that would be the same for America as the more rural nations.
Have you given any thought to replacing the dollar with a new currency? It might be called something like the panamericano. In Europe, the new currency doesn’t feature greats like George Washington and Benjamin Franklin. It has pictures of a series of European bridges. Not real bridges, you’ll understand: that might favour one country over another. Just pictures of things that look like they might be real bridges. It’s all fake, which actually is a great metaphor for our European Union.
If you decided to join the new currency you’d share the same fiscal policy with the whole of South America. I know that Argentina’s currency peg with the dollar didn’t work out too well, but never mind: if you actually shared notes and coins too they’d pretty much be trapped into it, right? On the other hand you could, like the UK, decide not to join. Then whenever one of those countries that did join gets into trouble because it joined, your taxpayers get the privilege of writing a large cheque to bail them out.
You know how America has a vote at the World Trade Organisation and some influence in world affairs? You’d lose that. If you’re anything like us, you’d be hugely unsuccessful. Our record in the Council of Ministers is ‘played 55, lost 55’ – that’s worse even than your Chicago Bears did last season. We opposed 55 measures and were outvoted on every single one. So in theory you’d have a reasonable amount of influence but in practice you’d have next to none.
You can read the rest of this article at my Huffington Post blog here.