And so do we take over the world…..

Liz Truss, the new trade secretary, will promise to create up to 10 new tax-free zones at ports and airports in a move condemned by Labour as setting up tax havens and money-laundering opportunities along Britain’s coasts.
Those advising Truss on a new free port panel will include Eamonn Butler, the director of the rightwing, libertarian Adam Smith Institute, and Tom Clougherty, the head of tax at the Thatcherite thinktank the Centre for Policy Studies (CPS).

Tom, of course, used to be at the ASI. Thus does the march through the institutions continue.

As to the actual free ports – they’re really just large bonded warehouses and no one has been complaining about those.

How to make the financial system safer

Ten years after the crash: have the lessons of Lehman been learned?
Our panel of writers considers what has changed – and what still needs to

OK, reasonable point for discussion.

Yanis Varoufakis:

Second, trade agreements must commit governments of poorer countries to minimum living wages for their workers.

Killing the ability of poor places to get richer makes the financial system safer, does it?

If only the young Mr North read his own material

8. It’s all part of the “invisible government” that we take for granted. That’s why toryboy morons assume we can get rid of it. To them, these non tariff barriers are just protectionist devices cooked up by Brussels bureaucrats with nothing better to do.

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Pete North

22h22 hours ago
9. So let us put this to the test shall we? If JRM thinks deregulation to African levels is right for the UK let him put his money where his mouth is. Let’s let him pick one, from three containers of baby milk, to feed the latest of his brood.

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Pete North

22h22 hours ago
10. Then let’s lace one of them with powdered floor bleach and ask him to take the gamble. What then do you suppose the arsehole’s view on non-tariff barriers would be? I wonder.

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Pete North

22h22 hours ago
11. And if you think I’m building a straw man here, here’s Tim Worstall of the ASI’s worldview. They really do think like that. …

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Pete North

22h22 hours ago
12. This is the mentality behind the Toryboy think tanks and BrexitCentral. They really genuinely don’t have the first clue. This is why they only talk about tariffs. Anything else is light years beyond their understanding.

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Pete North

22h22 hours ago
13. You would think that think tanks claiming to represent commerce would have a better handle on this but in the end they are free market dogmatists who favour their own scripture over real world evidence. London free marketeers are cult.

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Pete North

22h22 hours ago
14. What they don’t understand is how regulatory controls add value. Most trades in goods are not one of purchases. They are part of established value chains. Business wants to stay in business and its only fly by nights who want one off trades.

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Pete North

22h22 hours ago
15. In this the essential element of any value chain is trust. Supermarkets can but with confidence if they can see that trusted institutions have certified produce – and that in turn is peace of mind for the consumer. It also reduces waste and improves quality.

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Pete North

22h22 hours ago
16. Trade analysts will often say that an FTA doesn’t necessarily reduce prices, but it does improve the quality of value chains and trade facilitation measures removing bureaucratic overheads increase the profitability. This is why we have regulatory harmonisation.

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Yep. I – we – agree that trade and business is a multiple iteration process. We all end up trading with those we trust. On the grounds of getting what we asked for. Without that powdered bleach, unless a box of powered bleach is what we actually asked for.

Which is why we don’t think that regulation by the bureaucracy is all that important. Because people do trade with those they trust, trust doing that job of regulation rather well. Regulation does have its merits, most certainly. If all are following it then it means that you can take a flyer on some supplier you don’t know, who doesn’t have a reputation nor track record. As long as new entrants can afford to meet the paperwork costs of the regulatory standards of course. But then it’s not entirely unknown for people to lie about having followed the regulations, so it’s less effective than it might be.

Note that this isn’t the view merely of some Tory Think Tank Boy. I supplied much of the world – for a decade – with its desires for one specific metallic element. As far as there was any international standard for the material I wrote it. The thing I was really selling was that I delivered what I said I would when I said I would. When I didn’t – mistakes happen – I corrected matters. That’s why I got repeat orders.

Quite, regulation matters, but who is doing the regulating? That trade works on the basis of trust means that trust – and verify! – works. The bureaucracy might be nice, might not, but it’s not necessary.

I did, in those metal days, have one intervention with that regulatory apparatus concerning international trade. A bloke in the US bureaucracy wanted a sworn statement that 10 kg of scandium oxide was not an animal product.

Most useful, that declaration, most useful to all concerned.

Bit of a surprise

America’s International Trade Commission (ITC) overturned a decision to impose 292pc trade tariffs on the C-Series jets, which are being sold to US airline Delta.

The levies would have massively ramped up the cost of the 75 aircraft and likely caused Delta to cancel the contract.

But, in a surprise ruling, the ITC rejected a complaint brought by Boeing, voting 4-0 in favour of Bombardier.

The court rejected Boeing’s claims that it suffered injury in the case.

That ITC is less politically directed than I had thought.

Amusing that they’re still bloviating about this

The U.S. Commerce Department on Wednesday finalised steep anti-subsidy duties on Bombardier Inc’s CSeries jets, setting up the next round of a fierce international trade dispute between the United States and Canada.

The move announced by the department to impose duties of nearly 300 percent stems from a complaint by rival Boeing Co.

The company claimed Bombardier had been unfairly and illegally subsidised by the Canadian government, allowing the planemaker to dump its newest jetliner in the U.S. market below cost.

“Today’s decision validates Boeing’s complaints regarding Bombardier’s pricing in the United States, pricing that has harmed our workforce and U.S. industry,” Boeing said in a statement after the department decision.

Delta Air Lines, the second largest U.S. carrier by passenger traffic, has an order for 75 of the 100-to-150 seat CSeries jets.

Airbus now owns 50.1% of the Bombardier C Series. They will be assembled inside the US as a result.

Both Boeing and Wilbur Ross will be able to go fuck themselves.

Trade was always the worry, wasn’t it?

Mexico may be forced to pay for the building of a wall between itself and America through an aggressive 20 per cent tax on all its exports to the United States, the White House said last night.

As Mexican President Enrique Pena Nieto refused to fund the estimated $15 billion cost of the wall, and cancelled a visit to the US next week, President Donald Trump vowed to renegotiate the North Atlantic Free Trade Agreement.

He said: “The US has a $60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning.”

His spokesman Sean Spicer later said there were plans to “tax imports from countries that we have a trade deficit from, like Mexico”.

He said: “If you tax $50 billion at 20 per cent of imports, by doing it that way we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.”

Mr Trump has discussed the proposal for a 20 per cent import tax on Mexican goods with Republican leaders in Congress, and wants it to be part of a comprehensive tax reform package.

That’s Americans paying for the wall then…..

A liberal arguing against competition

Melton Mowbray pork pies, stilton cheese and British-made chocolate such as Cadbury’s could be under threat from Brexit, the former deputy prime minister Nick Clegg has warned.

Speaking to a food and drink industry conference on the impact of leaving the European Union, Clegg said it was possible that European rivals would start producing lookalikes to British foodstuffs if they lost the legal protection from imitation offered by EU rules.

“Outside the EU they won’t enjoy the appellation bestowed on those products and I would have thought other countries would take advantage of that pretty quickly and put products into the European market that directly rival those protected brands,” Clegg said.

Then again, it is Nick Clegg, not an actual liberal.

Clegg said that food import tariffs were there to protect British as well as German and French farmers. He added that it would not be in the national interest to unilaterally remove them as this would remove the UK’s bargaining power when it was trying to gain access with trade partners for exports such as legal services and accountancy.

This is the fucking heir to the party of Cobden. Oh Woes, Eheu Fugaces, tempora mores.

Oh dear

He added: “We’ve got to change the culture in our country. People have got to stop thinking about exporting as an opportunity and start thinking about it as a duty — companies who could be contributing to our national prosperity but choose not to because it might be too difficult or too time-consuming or because they can’t play golf on a Friday afternoon.”

Contributing to national prosperity is not a duty of anyone or anything. Let’s not come over all fascist here, shall we?

I wish someone would tell me where this is

This is a continual claim:

One of the legitimate complaints against the EU is its determination to drag us into treaties that claim to be about trade but are really about releasing multinational corporations from democratic control. Three of the agreements it is trying to impose – the Transatlantic Trade and Investment Partnership (TTIP), the Comprehensive Economic and Trade Agreement (CETA) and the Trade in Services Agreement (TiSA) – make a mockery of parliamentary sovereignty.

They threaten to reduce to the lowest common denominator the laws protecting us from predatory finance, the exploitation of workers, food adulteration, climate change and environmental destruction. They threaten to force the privatisation of public services.

Specifically that privatisation. I have at least skimmed two of those three. And I cannot find anything, anywhere, which advocates, insists upon, determines, hinders or advances privatisation.

I can find things which say that if you do privatise and then reverse then compensation must be paid but that’s a standard part of current law anyway.

Anyone help me out here? Where is this insistence or advancement of privatisation?

Isn’t this fun about Philip Morris?

An international tribunal has unveiled a secret ruling confirming it rejected a bid by tobacco giant Philip Morris to sue Australia over its plain packaging laws, calling the attempt “an abuse of rights”.

In its heavily redacted 186-page ruling dating from 17 December 2015, the permanent court of arbitration said it had no jurisdiction over the case brought by Philip Morris.

There’s lots of heavy panting about the ISDS provisions in TTIP and TPP. And this Philip Morris case is eternally used as an example of how terrible it all is. But, but, corporations would be able to sue governments!

Yep, they can. And look what happens: often enough they get sent away with a flea in their ear.

ISDS gives people a neutral court venue to sue a government. It most certainly doesn’t say that they’re going to win.

Caroline Lucas sure is dumb

Green MP Caroline Lucas said that access to documents on “this hugely significant trade deal” was necessary before UK parliamentarians were asked to vote on it. “But the bad news is that a cloak of secrecy still surrounds TTIP. If the same rules apply here in the UK as they do in Brussels, which is what the minister is implying, then MPs will be bound by a confidentiality agreement if they want to see the text,” Lucas said. “This opaque process, which shuts citizens out of this crucial debate, is profoundly undemocratic.”

MPs don’t have all that much say in the matter actually.

And when we have a final text, it’ll be governments and MEPs who decide.

Oh, and the reason for the secrecy? Because it’s a document still being negotiated. The final text will be public.

Pillock of the day

Yep, if we let foreign investors into the NHS then all that money that is paid to doctors, to nurses, to porters, all that cash spent on water, electricity, land, every single penny of the £120 billion a year we lavish upon health care for the citizenry immediately flows abroad, doesn’t it?


The only part that can possibly flow to foreign investors as a result of privatisation is the profit. And the profit is, by definition, the amount that is being added in value. So, they send their capital in (and we get the use of their capital, Yippee!) and if, and only if, they manage to add value do they get that profit stream back.

Adding value = we get more health care for less of our money.


BTW, do note the implication of his argument. The more locally the cash circulates the better. Thus I should never buy anything outside my own household because that makes the cash move outside my household. And thus, by his argument, makes me poorer.


He’s arguing that I am made poorer by buying my bananas from Tesco rather than building a greenhouse to grow my own.


And George gets it wrong on trade again

They have good reason to ask. The commission insists that its Transatlantic Trade and Investment Partnership should include a toxic mechanism called investor-state dispute settlement. Where this has been forced into other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments.

This mechanism could threaten almost any means by which governments might seek to defend their citizens or protect the natural world. Already it is being used by mining companies to sue governments trying to keep them out of protected areas; by banks fighting financial regulation; by a nuclear company contesting Germany’s decision to switch off atomic power. After a big political fight we’ve now been promised plain packaging for cigarettes. But it could be nixed by an offshore arbitration panel. The tobacco company Philip Morris is currently suing Australia through the same mechanism in another treaty.


All it is about is making sure that governments also obey the law. If you nationalise something you’ve got to pay compensation, that sort of thing. And yes, that really is all it is.

The old paradigms die hard, don\’t they?

The eurozone crisis certainly provides a convenient excuse but it doesn’t really explain why the UK’s export performance has been so poor relative to its continental competitors. The latest projections from the European Commission suggest that the UK’s export performance in 2012 will be one of the worst in the EU. A likely 0.2 per cent gain compares dismally with projected increases of 3.9 per cent for Germany, 2.6 per cent for France, 2.1 per cent for Spain and 1.1 per cent for Italy. Even Greece does better, with an expected gain of 0.8 per cent. None of these figures is particularly impressive, but in a sea of mediocrity, the UK stands out for all the wrong reasons.

In a world of fixed exchange rates export performance is vital.

In a world of floating exchange rates it doesn\’t matter a toss. For exports are our labour and resources that we send abroad for foreigners to enjoy. So we export less? We enjoy more of our own labour and resources.

The only point of exports in this floating rate world is, eventually, to pay for the things that Johnny Foreigner can supply us with better than we can make ourselves.

We\’re just no longer in an \”Export of Die!\” world, yet all too many people seem to think we are.

Trading note


I\’ve just been asked if I can sell some \”baleine oil\”. I assume, given that the email came from a native French speaker, that they mean whale oil.

Does anyone at all still use this stuff?

If you start with the wrong facts……

Then your conclusions are obviously going to be wrong.

In real terms, Americans are on average no better off than they were 30 years ago;

That simply is not true.

The way you get to a figure which seems to show that it is is by looking at median household income.

And median household income is a horribly misleading figure.

Firstly, household size has changed. Meaning that income per person in the median household has risen even if household income has stayed static.

Secondly, the measurement used is of income, not compensation. And in the US this is important (much more so than in the UK) because the majority of US households get their medical insurance as part of working compensation  but not as part of working income. And yes, the cost of such insurance has been soaring in recent decades. It\’s not just the cost that\’s risen, so has the effectiveness of the care that is purchased: it\’s not purely inflation here. Which means that household compensation has been rising in a way that is not captured by the statistics.

Yes, this is important. Because if you start by saying that the average household hasn\’t gained from the past 30 yeasr then you\’re going to end up thinking that there\’s something terribly wrong with the way the economy has been working these past 30 years. But if you note that actually household income has been rising then you\’re less likely to make that mistake, aren\’t you?

Sure enough, the world as a whole is getting a whole lot richer. In the past decade alone, the global economy has doubled in size. But most of the benefits of this explosion in activity have gone to the developing world and, in the West, the already rich, highly educated and talented. The wealth divide has widened to record levels almost everywhere.

But having made that correction, let us now ignore it. And let us be good little liberals as we do so.

We already rich people haven\’t been getting any richer. We people already living as high on the hog as any society of humans has ever done have just been treading water. At the same time hundreds of millions, billions in fact, of the formerly destitute are now not just getting three sqaures a day, they\’re joining us high on that hog, becoming middle class, bourgeois.

As good little liberals, if this was a deal offered to us, should we take it? I\’d say yes, absolutely, this is not just desirable it is our moral duty to not just accept it but to embrace it. You know, aiding the poor in getting rich sort of thing?

The principles of free trade are the same for nations as they are for individuals. Rather than trying to produce everything we need to live, most of us choose to work in quite specialist forms of employment, the product of which we sell to others. We then use the proceeds to buy in other goods and services. Nations ought similarly to derive a collective economic benefit by specialising in the things they do best and then trading with others for the rest.

No, a country is not a household. and that\’s not even comparative advantage, that\’s absolute advantage. And the case for trade rests on comparative, not absolute. It is individuals, companies, associations of people, who should concentrate on doing whatever it is they do least badly, not nations doing what they do best.

Adam Smith’s “invisible hand” cannot operate efficiently in a world of wildly different labour standards, attitudes to the rule of law and manipulated currency values.

Complete and total bollocks. Partly that Smith didn\’t wibble on about invisible hands (his actual one use of the phrase in WoN is actually a reference to how people will naturally employ their capital at home rather than go for the extra profits available from investing aborad) and more importantly,  there is absolutely nothing at all about markets which means they cannot operate with such different attitudes. Such differences are just another thing that markets will arbitrage, that\’s all.

In the long run, all nations must become better balanced and self-reliant. It was madness to outsource so much of what we used to do to foreign climes, just as it is unsustainable for China and other surplus nations to rely on ever-growing exports.

Where are the jobs going to come from, it is often despairingly asked, in Western economies? There’s a simple, if challenging answer: by returning to the way we were and doing more things locally. And that starts with washing our own sprouts for the Christmas dinner table.

I fear that Mr. Warner (for it is he) has been bitten by a very nasty bug. He\’s turned economic nationalist; wibble about the soul of the nation and the way that the darkies are polluting it cannot be far behind.

Trade is just the side effect of the division and specialisation of labour. And one needs only to look at \”home made\” anything to see that reversing that makes us poorer.