Why not?

Speaking separately Mr Fox admitted a zero tariff approach was among a range of options being considered.

But he insisted that was not “what I would propose and I have not actually heard anyone else in government propose it”.

Is there no one in government who understands the basic economics of trade? That unilateral free trade is the only logical stance?

43 comments on “Why not?

  1. But… but… there would be no expensive foreign jollys to attend to discuss these matters. And whole departments and budgets to manage it all wouldnt exist.

    We can’t have that, can we?!

  2. If politicians didn’t put up barriers to trade then they wouldn’t be able to slap themselves on the back when they remove them and ‘create’ free trade. It’s the same as the Chinese Communist Party getting praised for ‘lifting hundreds of millions out of poverty’…

    If I’m holding a man underwater does it count as saving his life if I take my foot of his head?

  3. No-one who understands the basis of trade wanted leave at all.
    Of the many who did not we must include one Mr Worstall

    You see Tim ..if we have no tariffs where it suits us we will be blocking the country to everyone else .That is why you are not allowed to do it under WTO and why the Governments unilateral zero tariff ( which they are also applying to the use of capital as security in another upcoming mega balls up ) is yest another Brexit nightmare and the usual vast Brexit bill!!

    So I guess you could go along to the WTO and say ,ok chaps then its zero tariffs for everything to anyone ( Singapore plus carnage )

    Then we would be in the delightful position of destroying every domestic industry we have farming creating something like a post apocalyptic dead zone outside the South East with only the happy thought of stringing up the wankers responsible somewhere in the new badlands to keep us cheery

    …..and lets remind ourselves why we are doing this … thats right so old Mrs Hate doesn`t have to smell Polish food on the street

    Jesus Christ almighty there has to be a more grandiloquent word than STUPID for this

  4. Surely you can do better than that, Newmania. How about trying to keep the logic going for more than 3 words? How about not contradicting yourself with each sentence? Newmania or “same old stupidity”?

  5. And your enormous personal experience of trade you’re drawing on for your expertise, Newmania, is in what? (You might note our host here has made a living in international trade.)

  6. There are about 100,000 little Trotters Internationals selling shit around the world from the UK. It’s not hard, I gather Amazon, who enable a lot of it are looking for ways around it all involving holding stock in various other countries
    If this small but extremely fast growing area of commerce is under threat ( and I had not thought about it ) yet more bad news

    I never claimed to be an expert you don`t have to be an expert to work out the obvious

  7. I would like to point out that Newmania’s position presumes that the EU and other trading partners will go out of their way to be complete cnuts. Revels in it, even.

    I, for one, do not believe the EU are as big cnuts as its most virulent supporters do.

  8. Newmania. Do you think that every industry in the UK is so uncompetitive that nothing could survive without protection by tariffs? How do we manage to export anything at all if everything we do can be done better and cheaper elsewhere?

    Why don’t you sit down and actually think it through rather than parroting lefty nonsense you read in the Guardian?

  9. So, from that Newmania, we gather that it’s so easy it’s beneath your towering intellect to be troubled with. The truly geniuses flip burgers.

  10. The most serous criticism I’ve seen levelled at unilateral free trade is that you lack bargaining chips to negotiate better access to the markets of trading partners, whereas if you have a tariff up you can bargain it down provided your partner lowers theirs too.

    Do unilateralists just accept that other countries will keep tariffs up, until a unilateralist comes to power abroad perhaps (not currently a likely prospect either at home or abroad), and that UK exporters will do okay regardless? For example because they benefit from cheaper import of inputs, or because the exposure to competition will trim the corporate fat?

  11. “defensive” tariffs in place to protect industries such as steelmaking and ceramics.”

    Nope nope nope, Greg Clarke.

    Its one thing to make a political argument that mercantalist mindset predominates so if you don’t go along with it you’ll lose elections. But for Greg to say “we” need protection is to be wrong. Cheaper steel and crockery is better for “we” than more expensive steel and crockery.
    The other political argument i could imagine is the plucking of the feathers argument. Take the tariffs off and you’ll have to replace the revenue in so doing greater hissing is generated and possibly that will be vote losing.
    So we should be willing to hear political arguments but economic ones should not be coming from cabinet ministers.

  12. No-one who understands the basis of trade wanted leave at all.

    Please elucidate.
    I wanted leave. I think I understand the basis of trade.

    Trade is the exchange of goods and or services for mutually beneficial gain.

    Leaving the EU will allow us to set our own tariffs and trade agreements with everyone outside the EU. We can also negotiate with the EU access to their market.

    How does this automatically mean we shouldn’t want to leave?

  13. MyBurningEars – “is that you lack bargaining chips to negotiate”
    Yes i’ve seen that argument (or more usually that assumption).
    But in simple terms WTO members have to offer the same rate to the world so its tricky to do that individual bargaining with the world. I suppose you pick a bloc where the greatest trade volume currently is (that arose with current and historic tariff arrangements) and set the rate to match whatever deal you’ve struck. But you can immediately see that its very clunky and very unlikely to be optimal.

  14. So Violet Elizabeth Newremoania doesn’t like darkies. It is the only explanation for being such a virulent supporter of the EU and its punitive tariffs on goods from Africa and other developing nations. And he has the chutzpah to call leavers xenophobes and racists. In the same league as Dick Tater for absolute cuntishness.

  15. Hallowed Be
    One thing I do know about is the use of passported Insurance capacity. Passporting is the recognition of equivalency across regulatory regimes essentially.
    Insurance is the largest sectional contributor to the treasury so that the scale of it , BIG and the UK is very very good at it
    We have been at the centre of the European market which has developed not without hitch towards solvency 2

    The UK is now at a terrible competitive disadvantage in the EEA .Lloyds have had to capitalise “onshore” at vast cost so this is all bad news and worse for the future . The FCA ,have unilaterally allowed EEA money to be recognised in the UK with or without a transition ie continuing as we are “importing” Insurance so as not to add costs and further loss to an already dire situation
    An objection is already with the WTO because this clearly contravenes MFN status effectively shutting out anyone else due to an insurmountable Non tariff Barrier . The Attitude of the UK Gov is to follow the case through the WTO procedures and presumably pay the fine in the end ( and the costs b) all with our money
    This is clearly not a way we can proceed and is itself picking what authority the WTO still has away. Others can do the same to us
    How bad in the long term this will be is anyone`s guess I have always thought the long term structural damage was the real issue

    Clearly the stuff of referendums eh what do you reckon passing thicko stick or twist ?

  16. Violet Elizabeth Newremoania

    The hilarious gag ” remoaner” was invented by a public school intern of Michael Gove in order that he will , in the long run, earn enough money to ensure his children never have to meet yours.

    Laugh ..I nearly started ..as they say

  17. @Henry Crun “So Violet Elizabeth Newremoania doesn’t like darkies. It is the only explanation for being such a virulent supporter of the EU and its punitive tariffs on goods from Africa and other developing nations.”

    During the run-up to the Brexit referendum, I told EU supporters that “If you love the EU, you must hate Africa”. There has been a bit of a shift in tariffs on that score, but still not good.

    Really makes them uncomfortable pointing all that out.

  18. Well, Newmania, if I was a member of the UK public I might say I don’t have a posh job in the City & actually, I don’t give a flying fuck whether some insurance men in smart suits can afford next year’s BMW.

  19. Newmainia.

    A few points/questions.

    1. How can there already have been a complaint to the WTO when we haven’t even left yet?

    2. I don’t think the WTO fines; rather they permit the complaintaint to apply punative measures.

    3. The EU has for years now ignored WTO rulings such as the banning of hormone fed beef from the US. So perhaps it is sustainable?

    4. If the EU ban insurance from London then they’re increasing costs on their members. Bit silly really.

  20. Newmania,

    Well of course you follow the procedures of the WTO. That’s a feature not a desperate measure. Ultimately I suppose you have to be prepared to recognise non european regulatory regimes as equivalent. And then it comes down to whether they really are equivalent or not. not whether they’re European or not. .

  21. Why does Britain have to have an economy set up to protect finance and farmers at the expense of every thing else?

    Buying stuff cheaply is best for the most people, so we should be aiming for an economy where a barista can live like a billionaire, not one where billionaires have the power of feudal lords over the rest of us….

  22. And when fishermen were being thrown under a bus in the name of the CFP, what did the financiers have to say for them?

  23. “Take the tariffs off and you’ll have to replace the revenue”

    But it’s the EU that gets the income from tariffs on imports into the EU. We (the UK) don’t get any income from it, so there’s no income to replace.

  24. “Why does Britain have to have an economy set up to protect finance and farmers at the expense of every thing else?”

    I can see why you might want to protect the City, it is one of the things keeping the country afloat. But I have no idea why anyone would want to protect farming (I am a farmer!), its a rounding error in the national accounts, especially if you remove the large cash subsidy thats chucked at it. There is certainly zero strategic or economic interest in not allowing cheap imports and letting farming live or die as a result.

    It is entirely possible that a wealthy country such as the UK might want to chuck a few billion at landowners to keep the place tidy for the millions as they drive between city centres, and for the middle class commuters who live in expensive villages within rail distance of London, and to be kind to the birds and the bees, but the idea that the UK public should be denied cheap foreign food AND pay subsidies for the environment is utter madness.

    Let the cheap food in, let the business side of farming sort itself out and if you must subsidise something, make sure its not food production and just the green nonsense. At least then you’re not interfering with the market for food.

  25. but the idea that the UK public should be denied cheap foreign food AND pay subsidies for the environment is utter madness.

    I rather agree with that, although we would miss some of their children in the rugby team ( I assume they would have to be redeployed to cleaning chimneys begging and what not … poor things )

  26. Poor little Violet Elizabeth is barking (up the wrong tree). 90% of what the City does is completely unaffected by ‘passporting’ issues. And 90% of the remaining 10% can be dealt with by opening a Dublin office with two beancounters and a lawyer (Somerset Capital Management) or renaming a European branch as a subsidiary (Lloyds Bank). None of those earning 7- or 8-digit salaries will be relocating to Brussels because, well, it’s Brussels.

  27. “That unilateral free trade is the only logical stance?”

    I don’t disagree, if unilateral free trade is phased in sector-by-sector.

    However, please, stop using the term ‘logical’ when you mean ‘rational’. False conclusions can be derived logically from false premises*. Logic tells us nothing about the world. It is the science of the formal relations between propositions and concepts.

    *All whales are immortal. Socrates is a whale. Therefore Socrates is immortal.

  28. One thing I do know about is the use of passported Insurance capacity.

    One wouldn’t know it from what follows in that post.

  29. “Is there no one in government who understands the basic economics of trade?”

    If there are, they wouldn’t admit it. Bad for your career.

    Its pretty darn hard to get someone to admit that something is wrong when saying that its right will stop the money train.

  30. Its why there are so many *ex*-law enforcement people speaking out against the War on Drugs. Not so many *current* ones though. After you’ve done your 20 and are collecting that pension – then its safe to admit that you were oppressing innocent people for decades.

  31. “Its why there are so many *ex*-law enforcement people speaking out against the War on Drugs. Not so many *current* ones though. After you’ve done your 20 and are collecting that pension – then its safe to admit that you were oppressing innocent people for decades.”

    And retired scientists suddenly admitting that Warble Gloaming is a bit of a crock………….

  32. “That unilateral free trade is the only logical stance?”

    Not so if you are a net exporter of bland overpriced food. A customs union with high external tariffs supports your farmers by keeping out world competition and lets you price your exports at way higher than their true value. Sure enough, for the rest of the customs union, such as the UK, who are net importers, it sucks.

  33. As seen on various forums recently: everyone is running around wailing about 10% tariffs and the cost they impose on consumers – the same people, even if they are aware, shrug at the 20% tariff the State charges on goods and passes on to the EU.

    It’s VAT by the way.

  34. @ Newmania
    If you understand *anything* about insurance you will know that London has for centuries been at the heart of (or been the heart of) the *world* insurance market. The Continental insurance market is a copy of London with local variations and is much, much less important to the London market than the US & Canada.
    From Lloyd’s 2017 annual report (2018 report not yet published) USA & Canada 50% of premium income, UK 15%, rest of Europe (including EU, Norway, Switzerland, Russia, Ukraine) 14%. Sources of capital non-UK Europe (including Switzerland) Insurance industry 5th behind US insurance, Bermudian Insurance, Japanese Insurance, UK non-Lloyds insurance.
    It is rubbish to say that the UK insurance industry has been at the centre of European Insurance industry – we have been way out in front (I can remember my former employers introducing innovations to the German market) – and equally rubbish to say that we shall be excluded; most UK companies have had for decades subsidiaries registered and authorised in EU countries as part of their historic growth. I wonder how you imagine Swiss re and Zurich have managed to survive with headquarters outside the wonderful EU?

  35. I can remember my former employers introducing innovations to the German market
    #metoo … and also the Netherlands, Belgium and Spain (I worked directly on the last of those). Of course, if the famous Four Freedoms (which apparently include services) were anything more than piss and wind, a Berliner would be able to buy their home/car insurance direct from Aviva for half what they currently have to pay Allianz. But if that were allowed the EU insurance industry would vanish overnight.

  36. @john 77 February 8, 2019 at 1:18 pm

    +1

    Same as “The City” is world leader in Finance – despite EU attempts to destroy it as they did with auction houses

    Remoaners – eg Hammond – are talking UK down and damaging UK with their negativity.

  37. @ Chris Miller
    Of course you are correect.
    Spain was after my time. Netherlands and Belgium: yes but that was relatively minor, whereas our friends, particularly the late lamented MIke, changed the market in Germany so I only referred to that.

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