. If the optimists are right – and I include myself in their number – then AI is going to cause a wave of creative destruction across the economy. In order to be able to gain from the benefits that AI will bring, we will have to allow many jobs and many firms, to disappear as new ones are created. From its history, I wonder whether the EU is going to be able to accept this. The danger is that it will over-regulate and over-restrict the use of AI, and miss out accordingly. When it comes to Free Trade Agreements, we have secured more deals than the pessimists envisaged, and we have secured membership of the Trans-Pacific Partnership. Yet the effect is hardly going to be transformative and the really big deal that could make a difference, namely one with the US, remains elusive. Yet Europe is shrinking in relative importance in the world economy. Some of the reasons for this are demographic, but there is also a fundamental lack of economic dynamism. Although Brexit h){kind=link}
Britain’s danger lies with a Labour government being seduced into joining the third ring
Last week, the Europe Ministers of both France and Germany laid out a plan for restructuring the EU. This involved instituting four levels of membership, which can be thought of as four concentric rings.
Some Remainers are attracted to the notion that this could offer the UK a route to some sort of associate membership, perhaps leading ultimately to rejoining as a full member. This idea deserves careful scrutiny.
In fact, this notion of different levels of membership is nothing new. Indeed, I advocated it well before the 2016 referendum. What’s more, if some sort of EU membership-lite had been on offer then, Brexit would probably not have happened.
As a matter of current reality, as opposed to aspiration, the EU already partly corresponds to this vision but in a rather Heath Robinson fashion. Not all members belong to the euro or the Schengen free movement arrangements, while Norway and Switzerland, although not EU members, enjoy a close relationship. And Turkey is a member of the Customs Union, but not of the Single Market.