The message of GM’s EU exit

General Motors’ decision to sell Opel/Vauxhall to Peugeot is a reminder that the European market is in decline. Post-Brexit Britain needs to look beyond it.

As Matthew Lynn points out in the Telegraph, by selling Opel/Vauxhall, GM isn’t pulling out of Britain. It’s pulling out of Europe. That’s telling.

GM hasn’t had an easy decade anywhere. It was bailed out by the US government in 2008, temporarily ending up in public ownership.

But its lack of profitability this side of the Atlantic has much more to do with the European market.

Annual car sales in the EU are still 20% lower than they were in 2007. By contrast, US car sales hit a new record in 2016 – with GM’s sales in December 2016 10% higher than in December 2015.

The EU’s economic problems aren’t going away. Another sovereign debt crisis is imminent. The EU doesn’t have the flexibility to adapt to changing market conditions. And even if it did, the plain fact is that Europe is in demographic decline.

Whichever way you look at it, the European market is shrinking. It’s no longer the comparatively dynamic trading bloc that Britain joined forty years ago.

Britain needs to reorient its economy toward the growing regions of the world to prosper. That would have been the case whatever the result of the referendum.

Of course we want – and will negotiate – access to the EU market post-Brexit. But we can’t stake our future on it.

Brexit provides the opportunity we need to revamp our trade policy for the twenty-first century. Let’s make sure we take it