This globalisation shtick

OK, so this is about second hand photocopiers but the lesson stands for all goods.

The global cost of shipping has never been as cheap as it is now, according to Stephen Armistead. \”We ship our fax machines to China for the same price as delivering a consignment from Penrith to the south coast of England.

You\’ll recall that the EU was set up in the same year that the first container ship set sail. As far as trade is concerned the EU was set up on the idea that countries that were geographically close to each other should be trading with each other, not with the far flung corners of the globe.

That\’s why we have no tariffs or technical barriers (often much more important) to intra EU trade while we do have tariff and technical barriers to ex-EU trade. And yes, these do apply to exports just as much as imports (you can shift dead electronics around the EU but not outside the EU, only working but used machines are freely exportable).

However, that very invention of the container ship made the economic geography different. If you\’re a node on the container shipping lines then transport to any other such node is cheaper than transport of the same goods to a place vastly closer, but not a node on that system.

In other words, the new technology entirely eviscerated the justification for the trade stance. As far as the new economic geography is concerned, Penrith and Shanghai are closer to each other than Penrith and Brighton (or at least the same distance). And so if we\’re not to have trade barriers between Penrith and Brighton, nor should we between Penrith and Shanghai, in either direction.

The EU are like the anecdotal Generals, always ready to fight the last war.

2 comments on “This globalisation shtick

  1. “As far as trade is concerned the EU was set up on the idea that countries that were geographically close to each other should be trading with each other, not with the far flung corners of the globe.”

    Any proof of this, or is it just a UKIP briefing note?

  2. I recommend a book http://bookadvisor.eu/The-Faces-of-Globalisation;s,karta,id,169
    […] The main aim of the present volume is to show the complexity and diversity of globalisation processes as an object of scholarly scrutiny and, even mor? importantly, as a part of our social environment. Conse?uently, they should not be identified with the all-encompassing homogenisation of economic, political and social life on the global scal?. The scope of their functioning is complex and multidimensional. They affect different areas and aspects of social life. Their effects are also different and so are the responses of different actors in social life.

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