But this is the only sensible stance

In a debate on the BBC, Nigel Farage, the Ukip leader, went even further than the official leave campaign and suggested getting rid of tariffs on goods traded with all countries.

This was condemned by the remain campaign, who said it was a “reckless” plan that would “decimate our domestic industries”.

“People would be able to sell in to the UK market for free, but our exporters would face tariffs selling in to Europe,” a spokesman said.

Err, yes. But given that it is the imports which make us rich then that’s the thing we want to do, isn’t it?

Unilateral free trade is, after all, the only logical trade stance to have.

21 thoughts on “But this is the only sensible stance”

  1. Very enrichening: everybody gets paid Mike Ashley level wages while paying loopy rents and mortgages and buys cheap food and goods from foreign slave labour.Low wages/ high rents. Meanwhile in another part of Europe, Germany has high wages/low rents (House price/ earnings ratio 11.2% : GB 81%) and produces classy value added goods that people want to import.Thats the problem with slavery: doesn’t produce complex manufactured goods or the aggregate demand to buy them.

  2. Bloke in North Dorset

    Tariffs and trade wars hurt us in many other ways as well.

    A few years ago Russia retaliated to some sanctions by banning the import of marine engines. The first thing that happened was that their own leading yacht maker went bust because they couldn’t get engines and weren’t able to sell any yachts.

  3. Talking about the repeal of the corn laws in 1845. My brother did some research on this topic, he is a professor of law, and explained one of the practical implications of the corn laws to me. Did you know that bakers were not allowed to sell fresh bread before the corn laws were repealed? In the Hansard, he read about the debates in parliament. One of the Tory grandees argued that fresh bread smell too nice and that entices people to buy bread they don’t need and therefore the sale of fresh bread was forbidden. The corn laws were repealed because the argument was, and is still true to this day, it was only the handful of farmers and landowners that benefit from the higher prices but the majority of workers, who were beginning to get the vote and started becoming important to the politicians, suffers as they pay higher prices.

  4. Sorry, I omitted to mention that bread had to more than a day old before the bakers could sell it.

  5. A few years ago Russia retaliated to some sanctions by banning the import of marine engines. The first thing that happened was that their own leading yacht maker went bust because they couldn’t get engines and weren’t able to sell any yachts.

    Lol! Do you have a link to that? That is so typically Russian!

  6. Sorry, I omitted to mention that bread had to more than a day old before the bakers could sell it.

    A tradition maintained in the UK right up until around 2003.

  7. Bloke in North Dorset

    TimN,

    Just looked but can’t find one. It was a small article in Yachting and Boating World. I photocopied it (and sent it to TimW as it was tompical) and if I can find it again I’ll get in touch via your blog.

  8. Bloke in North Dorset

    “Sorry, I omitted to mention that bread had to more than a day old before the bakers could sell it.”

    Nowadays it would be the Guardian arguing the case, some wibble about instant gratification and obesity epidemic.

  9. To be fair there is more to trade barriers than tariffs – there are regulatory barriers too. Even things like the side of the road you drive on is a potential hurdle to selling cars, for instance.

    Clearly regulatory barriers are more important now than in the 1800s but is there any research into just how big an effect they have, compared to tariffs?

  10. One benefit of this referendum, regardless of the result, is that it’s brought out all the mercantilists, protectionists and general opponents of free trade out into the open.

    As expected, they are in all parties and on both sides of the debate.

  11. @Tim,
    To be fair, 1845 to 1914 most of the map worth trading with was pink. Tarrifs would have cut the proverbial nose off. The corn laws were like the Russian yacht engine embargo (oh how the heart bleeds), restricting imports of stuff you aren’t self-sufficient is is nonsense. Today they are sold as protecting jerbs rather than wealthy landowners because the franchise is different (no longer restricted to wealthy landowners).

    Not defending tarrifs, or any trade barriers whatsoever, but you know where most of the benefits of unilateral free trade will go – to the wealthy. Is a revolution really the best way to go given what evolution has achieved in the last ~30 years (and looks like finishing the job in the next 30)?

  12. BiG
    To be historical, that is nonsense.
    Compare trade on the Loire with trade on the Rhine.
    US argued about free trade for many an election. Free trade won.
    Until Smoot Hawley.
    And its imitators.
    Which made a technical recession into a depression.

    Look on the bright side, though. If global warming has its way we’ll be able to grow bananas in Northumberland.

  13. Has any state ever adopted such a policy?

    New Zealand has it as policy. In practice they are working their way towards it slowly but surely.

  14. Australia in the 80s did a lot of unilateral dropping of trade barriers and tariffs, with great success. Unfortunately there is a lot of pressure back the other way now.

  15. @(Ros)BiF,

    I’m talking about Tim’s story of Britain’s brief flirtation with unilateral near-free trade, not France or Germany.

    We’ve had pro-free-trade riots in Europe, by the disenfranchised. Peterloo, 1848, for examples. At a time when it was actually more the norm than now. Those that want to restrict trade sell the benefits to their franchise – as the franchise now includes everyone the reasons given for restriction have changed from 150 years ago. Only recently have there been anti-free-trade movements (against TTIP for example), and those tend to focus on the surrender of sovereignty required (god the irony), or trivia like chlorine-treated chicken (as if exports of chicken from the US to Europe are ever going to be antything other than trivial arbitrage) rather than any ideological opposition.

    The 19th century USA is also a special case because back then transport costs to and from the rest of the world (which are next to nothing today) greatly outweighed the effect of any tarrif. And the destructive effect of British taxes and tarrifs were, if not within living memory, still part of the tradition.

  16. By the way, let’s have global free trade as soon as possible. Works best alongside global free movement of capital and people. How do the brexiteers think about the latter? Not positively? Oh…

    We’re actually getting there after almost 100 years of regression. Who apart from a revolutionary libertarian would therefore argue for changing the process fand going it alone, while hoping the rest of the world follows? Will China declare unilateral free trade before they have a global monopoly in everything? Answers on a postage stamp.

    I totally grok Tim’s argument about imports making us richer. The thing is you have to produce (or borrow) in order to consume. A sensible tarrif policy might be simply a reciprocal one (you charge us 5% we charge you 5%). How that would work in today’s world, let alone a more recent one (for example where Chinese goods were relabelled and shipped through the free port of Hong Kong) is anyone’s guess.

    Ironically, it’s those regulatory rather than tarrif barriers that are the biggest problem. One bad apple in 10,000 makes your shipment rejected. Too much state power, too little consumer power, when the state can afford customs officers to inspect apples. Those regulatory barriers are a huge problem for service exporters, like the UK. The EU has still not got there with free trade in services. Why didn’t Cameron insist on progress towards that as part of his EU renegotiation rather than the cosmetic, fatuous, worthless promises about meaningless trivia actually secured? That would really have benefited the British economy.

  17. Quite. because It’s all about jerbs now rather than landowners. Which at least has the marginal advantage (if it’s still a cost to the taxpayer) that the lumpenprole looking for a modest wage isn’t exactly rent-seeking. Rightwing brexiteers playing at being socialists, when it suits them.

    And protectionism, whether it’s overt tariffs, or more subtle state subsidy, is never reciprocated, is it?

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