What exactly is wrong with the UK’s current trade deals?

One of the main “Leave” claims during the referendum campaign was that leaving the EU would enable the UK to “do its own trade deals”.

To be specific, leaving the EU Customs Union (which is not obligatory even if the UK leaves the EU) would mean this.

However, that raises an obvious question. What precisely is wrong with the trade deals the UK currently has as an EU member state?

(I notice, by the way, that no one attempted to answer last week’s question, which was: What happens if the other party in the trade deal with the UK simply breaks it unilaterally?)

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5 thoughts on “What exactly is wrong with the UK’s current trade deals?

  1. Ed says:

    Nothing particularly wrong with the trade deals the UK currently has as an EU member state. The problem is the trade deals we don’t have, for example the Canadian deal currently held up by (among other things) Romanian and Bulgarian issues with visa waver travel to Canada, or the fact that Switzerland has a trade deal with China, while the EU doesn’t.

    “What happens if the other party in the trade deal with the UK simply breaks it unilaterally?”

    Well, what happens if the other party in the trade deal with the EU simply breaks it unilaterally? Diplomatic stuff, via WTO or not, hopefully without requiring the military to get involved. Same as it has always been.

    • Are we really supposed to believe that Bulgarians and Romanians are to blame for the deals with Canada?

      You do realize that Canada’s deal with Switzerland is through establishment of a Canada-EFTA Joint Committee that politically enforces the trading rules.

      You do realize that the EU’s deal with Switzerland and Norway relies on a Single Market Court.

      You do realize that US, Japanese and Swiss deals with China have been intoxicated by the mala fides (bad faith) shown by China protecting foreign intellectual property in its domestic market.

      https://www.nottingham.ac.uk/cpi/documents/briefings/briefing-24-china-intellectual-property-rights.pdf

      Indeed the USA even threatened a trade war with the Chinese over the issue.

      The USA gives the Chinese access to its purchasers but its exporters get prized out by a black market. At the end of the day, the only true free market is the black market, and in that arrangement only criminals can profit.

      If the UK adopts the hardball approach to trade or indeed relies on the WTO approach it is still caught trying to gang up on other nations with other nations … being effectively a Romania or Bulgaria to say the USA’s Germany.

      Assuming it doesn’t go ape-crazy and to the guns in frustration.

      The UK’s main problem with the EU was that it was political, but Brexit seemingly was sold on non-European trade partners being apolitical to the point of self-abandoning their own interests, ignoring the realpolitik of trade disputes.

  2. Ed says:

    Yes, the issue of Bulgarians and Romanians needing visas to visit Canada is one of the sticking points for the proposed EU-Canada trade deal.

    http://www.cbc.ca/news/politics/romania-bulgaria-visas-european-commission-mccallum-july-1.3665356

    Yes, trade deals often define the court that will be used to arbitrate in any future disputes. So what?

    It is worth remembering that the benefit of trade is what we import, not what we export. Given that, free trade doesn’t require trade deals, merely that our own government removes the quotas and tariffs that prevent or make it more expensive for our consumers and businesses to buy what they want and need from abroad. Sadly governments and electorates don’t understand this, hence most trade talks can be characterized by the idiocy of “I’ll stop throwing rocks in my harbour if you stop throwing rocks in yours”.

  3. Sorry but let’s stop the nonsense about whether it’s more important to earn a living than to spend your wages because they are the same side of the same coin effectively, dido with regards import and exports. The fact is that there is always going to be a halfway house between protecting the free trade that allow imports and protecting the industries that are exported to pay for those imports.

    People don’t make it easier for their competitors and enable them even if they do offer lower prices, that’s a basic social choice survival instinct no matter how committed a capitalist they are. There is a point this becomes detrimental to the ability to do trade at all and usually then there is a risk.

    And I am sorry but the fact is the tarrifs and the quotas exist for a reason, they existed in the UK before it joined the EU, they will exist in the UK after it leaves the EU and given the track record of Brexit so far, I’m not overly optimistic that the UK government will be able to lower these charges, and even if it does it is likely to come at the removal of subsidies for their means of production … agriculturalists and manufacturerists are only beginning to realize this.

    The old money hedonists will probably spend all their money, and people will need to produce things again, enable cross border services provision or make risky investments in order to regain some wealth for the nation.

    I’m not buying this argument that the international community wants to have money the UK just prints out of its mint and no other assets besides, and wants to have purchasers the UK selectively choose to use and no other labour beside.

    We buy tariffed goods and quota goods and regulated goods all the time, look at the huge amount of goods from China for example, just because goods don’t go through the path of least resistance doesn’t mean there is absolute resistance for goods coming here.

    There is always going to be resistance, inefficiencies and hard work with trade along with a load of politics and frustration …

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