The following article over at the CapX site explains why the UK should go for unilateral free trade immediately, and summons up arguments deployed a century and a half ago by the likes of Richard Cobden, and Sir Robert Peel, the Conservative prime minister of the time (who had a rather stronger grasp of political economy than, I suspect, any member of the present government):
I trust the government … will not resume the policy which they and we have found most inconvenient, namely the haggling with foreign countries about reciprocal concessions, instead of taking that independent course which we believe to be conducive to our own interests…[L]et us trust that our example, with the proof of practical benefits we derive from it, will at no remote period insure the adoption of the principles on which we have acted… Let, therefore, our commerce be as free as our institutions. Let us proclaim commerce free, and nation after nation will follow our example.
And these comments from the author of the CapX article, Louis Rouanet, who is a student in Paris, strike me as crucial:
A unilateral free trade program is very simple: the British Parliament declares the abolition of all tariffs. To avoid a race in non-tariff barriers, the Parliament can pass a law declaring that every product which conforms to the EU norms and regulations can be sold freely in the UK. This should not be a problem since the UK still is a member of the EU.
By Parliament’s act, most of the “non-tariff barrier” problem withers away without any need for regulatory harmonisation. If the EU legislator considers it necessary to regulate the curvature of vegetables, so be it! But, although EU producers will be free to sell their product in the UK, the British legislature may deem it unnecessary to regulate its producers in the same absurd way.
The advantages of this approach are many. First, the UK can have free trade now instead of waiting through years of negotiations. No need to wait for bureaucrats to agree on which laws we burden consumers and producers with.
Read the whole thing, as they say.
Seems like a sensible idea.
But we must stress it is NOT us who are threatening a Trade War – it is the E.U. that is making threats about putting taxes on imports, NOT us.
If the E.U. wants to destroy German and other jobs by a Trade War with the United Kingdom (after all they sell us far more than we sell them) then German and other workers should be told exactly who is to blame – the E.U. is to blame.
By the way funding the vast import of consumption goods (a “consumer boom”) by the Credit Bubble Monetary Policy of the Bank of England (Mark Carney and co) is a BAD thing, not a good thing.
People must not get confused between free trade and a phony “consumer boom”.
Gosh, wouldn’t it be a shame if “England” only dropped it’s barriers on importing (actual) raw materials, cut the dole in HALF, and HAD to begin manufacturing (actual) world trade worthy goods? POOF, Bob’s your uncle!
Oughtta fix up the Unilever Marmite-gate issue OVERNIGHT!
Trust me, you do not WANT (ie)Chinese “sheetrock”, “baby formula”, or American windmill-powered ‘puter cars.
Wait. What DO Brits, and other GB folk call gypsum, WITHOUT sulpher, dry wall-panels with paper facing on both sides?
(We’re having issues of our own in the US with the old figureheads of Unilever’s Jen and Berry’s, from the Bernie Sanders Lakefront Socialist Zone, believing they’re still….pretty.)
FULL DISCLOSURE! I am NOT a self-described, Award Winning, economist or Political Scientist!
CaptDMO, I think you forgot to take your medication before getting in front of the computer.
😀
” what do GB folk call gypsum, WITHOUT sulpher, dry wall-panels with paper facing on both sides?”
Plasterboard
Isn’t “Sheetrock” a trade name?
Plasterboard. Edit to add: missed The Jannie’s earlier post.
It seems trade negotiations are not dissimilar to thermonuclear war:the only way to win is not to play the game.
But this plan would render bureaucrats and diplomats redundant, and politicians unimportant. They’ll never do that.
I read a good counter-argument in a book recently. The author felt that the US SHOULD have trade barriers and protectionism, and used Great Britain as an example not to follow! The Empire began to fall, and British pre-eminence also, when they adopted free trade policies, he claims. He makes the argument that they are directly related, so America should do the opposite to stay in power.
Any takers?
As I understand it, and given the limitations of an aging brain that understanding may be flawed,prior to the UK going into the EU it had a “free trade” system with Commonwealth countries. I am prepared to be proved wrong on that. Why would such a system not work again? Iron ore, bauxite, uranium, black diamonds [coal], food products, ad infinitum abound in Oz and other Commonwealth countries. It would make a “Trade Bloc” others would like to tap into.
I note Nicholas’ reference to a US opinion to the contrary.
Happy 15th birthday, Samizdata!
Nicholas (Unlicensed Joker!) Gray, November 1, 2016 at 11:39 pm: “The Empire began to fall, and British pre-eminence also, when they adopted free trade policies”
The book is wrong as far as this summary is concerned. The time gap is one of decades on even the most negative interpretation. It seems clear the industrial revolution would have spread to the US and Europe in any case, lessening Britain’s advantage, just as it did. Restrictive trade policies could only have accelerated the incentives to people in those countries to develop industry.
Internally, the Empire’s free trade policies had much to do with its being of benefit to its members, not an exploiter The earlier mercantilist approach, which brought on revolution in North America, was about restricting the colonies for the benefit of the mother country. Free trade slowed trends to separation.
The British Empire did not have free trade – British colonies (including ones in what is now Australia) were allowed to put taxes on the import of British goods.
As for the idea that taxes on imports (or other restrictions) can save declining (at least relative declining) manufacturing – that is nonsense.
Real reform – lower government spending (Mr Hammond will not accept that), lower taxes, and less REGULATION, is desperately needed.