Polly doesn\’t understand trade, does she?

The cost of membership is not high: we pay a net 1% of GDP, the same as France, 85% of it redistributed to poorer countries. What we get back in trade is far greater:

The benefit of trade is the imports we get. And why leaving the EU would make us stop importing from EU countries I\’m really not sure.

8 thoughts on “Polly doesn\’t understand trade, does she?”

  1. Say the EU erected a 100% tarrif barrier to the UK (yeah, unlikely but go along with it) – your exports overall would be reduced meaning you had less ability (cash) to buy stuff you wanted from the EU – even assuming a retaliatory tarrif was not erected.

  2. It’s not that she doesn’t understand trade, it’s that she doesn’t understand democracy or sovereignty, which I would have thought is the real concern over EU, not the cost. Her 1% GDP probably doesn’t include what “tax” we have to pay due to EU directives enforced by the unelected.

  3. I’m sure I remember watching a Friedman video where he said that if imports don’t balance exports then the price system provides the balance.

    Would it not then be the case that if they erected a 100% wall, that they couldn’t do anything with the bits of paper we use to pay for the shit that they export to us? And so the price of the Euro would rise as everyone tried to turn sterling into euro.

  4. …..What we get back in trade is far greater……

    Why don’t we just pay out more cash to the USA, China and other trade partners. After all what we get back in trade is much more…….

  5. (With thanks to Wikipedia).
    Norwegians enjoy the second highest GDP per-capita … in the world.
    Norway maintained first place in the world in the UNDP Human Development Index for six consecutive years (2001–2006) and then reclaimed this position in 2009 and 2010.
    The standard of living in Norway is among the highest in the world.
    Foreign Policy Magazine ranks Norway last in its Failed States Index for 2009, judging Norway to be the world’s most well-functioning and stable country.
    Norway has a very low unemployment rate, currently 2.6%. The hourly productivity levels, as well as average hourly wages in Norway are among the highest in the world.
    Norway is a major shipping nation and has the world’s 6th largest merchant fleet, with 1,412 Norwegian-owned merchant vessels.
    _________________

    And all that achieved, according to Polly’s argument, without being able to trade with other countries. Astonishing.

  6. @James
    Such a tax would of course kill the Rotterdam effect- no-one would ship goods to Rotterdam for onward transmission, they’d ship direct instead. Less money for the Dutch, and if it remained for long enough for British ports to develop the shift would be permanent.
    The continentals would receive somewhat less value than they do at present- after all they only buy our goods when they are best value, so doing without would hurt them.
    In as much as we failed to find other markets for our goods, or alternatively generate internal growth, we would indeed have to get by with less continental imports, which would reduce the continentals’ ability to pay for stuff they wanted.
    On another topic, if we truly want to give money to poorer countries, we do not need the EU to facilitate this. We don’t even need government. Just set up a charity to aid the Greeks (say) and Bobs your Uncle. I’d say there’s a better chance of the money going to Greek people (rather than politicians) that way, and hence a better chance of Greek people benefiting instead of Greek and EU politicians.

  7. Pat

    …….On another topic, if we truly want to give money to poorer countries, we do not need the EU to facilitate this. We don’t even need government. Just set up a charity to aid the Greeks (say) and Bobs your Uncle. I’d say there’s a better chance of the money going to Greek people (rather than politicians) that way, and hence a better chance of Greek people benefiting instead of Greek and EU politicians……

    Excellent argument. In fact we have a department of government with its own minister to do exactly that.

    – If we want to help the people of India, we don’t send the money to Rio de Janeiro
    – If we want to help the people of Southern Sudan, we don’t send the money to Taipei
    – If we want to help the people of Greece, why do we have to send the money to Brussels?

    Besides, as much as I like the Greeks, and though they doubtless could use a little help, I am not sure that we should prioritise them versus, lets say, the citizens of Malawi.

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