I struggled to see themes in this morning’s news that were initially worthy of comment. Then I realised that is almost certainly deliberate.

Because Snippa’s a bit slow this morning it must be a conspiracy

The UK is set in course to leave the EU in two weeks time. No one has ever successfully explained why we are so desperate to depart the single market and customs union, most especially given that the former was Margaret Thatcher’s creation, which is a point the Tories seem keen to forget.

Because we want to have free trade with everyone, not just with the countries of Europe. That means being outside the tariff barriers that the EU imposes.

30 thoughts on “Gosh!”

  1. Also because the actual design of the single market serves as a drag on every country in it, especially wrt internal trade. A good idea ruined by the EUs greed for power.
    Because the common external tariff impoverished everyone in the EU.
    Because that reserve army of the unemployed in eastern Europe keeps wages low here.
    Because the EU might well facilitate the transfer of undesirables to here- that’s undesirable to them btw, we don’t get a say.
    Because it charges a.serious amount of money for things that should be free, principally tarrif free trade within the “club”
    Because it insists on subsidising owners of agricultural land simply for owning the land this both wasting money and increasing inequality.
    Because it has taken control of our fishing waters without offering a penny in rent.
    Because it’s run by an arrogant bunch of power hungry individuals.
    Hope that’s enough!

  2. I don’t accept that they tip the balance, but I can expound half-a-dozen arguments in favour of remaining an EU member, because I read them and then criticise them. But a Remainer (and there seem to be an awful lot of them) who has “never seen an argument in favour of leaving” is either terminally stupid or has an extremely closed mind (or both, as in the case of Spud).

  3. “because we want to trade with everyone”

    And that’s a far bigger deal than it was in the 1970s when huge chunks of the world were poor agrarian dictatorships or communist, and most exports were physical, low value added (so all that gravity trade shit made a massive difference).

  4. Being geographically proximate to Europe the benefits of being in a trading relationship via a single market in Europe probably outweigh the benefits of being able to trade more freely with everyone else.

  5. Tim, your blog protection systems are a bit hyperactive. Not only just lost a comment here (“posting too quickly”, but popped over to ConTim and got: “Your access to this service has been temporarily limited. Please try again in a few minutes. (HTTP response code 503). Reason: Exceeded the maximum number of requests per minute for crawlers.”

    Do I need to be more critical to avoid being classed as a “crawler”?

  6. Ken, doesn’t the example of Germany call the “gravity theory” into question, given that their main trading partners are USA and China, neither of which is proximate? And does it really count as a theory given that no one seems to express it mathematically, it is just a question of common sense and something that “everyone knows” but cannot prove?

  7. We are indeed blessed that the great polymath potato deigned, finally, to give us the benefit of his unbounded intellect today.

  8. Diogenes

    No. The gravity model includes an element for the size of the economies as well – thus the US and China are very large trading partners with many countries, because they are large. Gravity includes both proximity and size. The US is the UK’s largest trading partner and China the 5th largest.

    Germany does even more trade within the EU than the UK does – 59% of exports and 66% of exports. This is helped by land borders with other parts of the EU and the fact that the UK has historically had connections with Empire and via a common shared language with the US, factors that also result in more trade than the gravity model suggests.

  9. This is one of the things that really annoys me.

    The gravity model depends upon “economic distance” not geographic distance. Thus trade routes, tariff barriers, language, cultural contacts, these are all included in that concept of economic distance and not geographic.

  10. So it is an unquantifiable type of gravity….the word gravity is being used to dress up a vague concept with a veneer of intellectual rigour. To look at it from another angle, if someone pointed at 3 countries at random on the globe, would an economist be able to point to their major trading partners? Does the concept have predictive power?

  11. No one has ever successfully explained why we are so desperate to depart the single market and customs union

    Because whatever advantages being in the Single Market and customs union bring there’s a majority of people who don’t find those advantages outweighed by the disadvantages of being tied to, and ruled from, Brussels?

    Because there’s a lot of baggage that comes with that.

  12. Ken
    January 17, 2020 at 4:05 pm

    Being geographically proximate to Europe the benefits of being in a trading relationship via a single market in Europe probably outweigh the benefits of being able to trade more freely with everyone else.

    Being near a trading partner means pretty much nothing nowadays. When shipping is so cheap it is literally less expensive to raise sheep in New Zealand and ship the meat across the world being across the Channel only provides an advantage for French tourists.

  13. On the gravity model Japan would never have got started, nor Hong Kong, nor Singapore, nor Australia, nor New Zealand.
    On the Gravity model Britain’s chief trading partners in the 19th century would not have been Argentina, Brazil, USA and Canada but in Europe, and the Various East India companies would have gone bankrupt owing to the enormous distances.
    Of course if you modify the gravity model to regard countries with good access to the sea as being close to each other it then makes sense, the more so as maritime trade gets easier.
    So there’s no reason to shut ourselves off from the world outside the EU.

  14. Physiocrat makes some interesting comments

    http://physiocrat.blogspot.com/search?q=Gravity+&m=1

    “Only the south-east corner of the UK is geographically close to continental Europe. Most of the country is a long drive to Dover or Cheriton, including around the congested M25 or M27. Otherwise, a long ferry crossing must be used: from Hull, Immingham, Harwich or Tilbury, to one of the continental ports between Gothenburg and Zeebrugge, depending on the destination.

    Once goods are put in a container and loaded onto a ship, the economics of the logistic operation changes, as the cost of distance becomes trivial. Ports on the UK’s west coast are poorly placed for freight movement to continental Europe. From Liverpool, for instance, it takes little longer to send goods across the Atlantic than it does to send them to Hamburg.”

  15. Regulations are as bad as tariffs. The EU imposes a lot of regulations on commerce, which causes the ‘free’ internal market to be anything but free. Regulations on Parmesan cheese, or bananas or any of dozens of products, raises the cost to consumers. Ridding yourselves of the regulations imposed from Brussells is another good reason for Brexit.

    I did not see this explicitly in Pat’s list, so I thought I’d add it. I do like Pat’s list though, and realize Pat could have gone on with a lot more.

  16. @Chris

    EU ideas like single market, free movement, regulatory compliance etc would be fine if they weren’t overloaded with onerous and anti-competitive rules.

    Rather than keeping it minimal they destroy the idea by ratcheting everything up to maximum complexity & restrictiveness

    One craziness that springs to mind is Bulgarian bloke coming here to work and receiving UK child benefit etc for his family living in Bulgaria

    @Pat

    +1

    Because it’s run by an arrogant bunch of power hungry individuals

    German EU Commission president Ursula von der Leyen decrees national flags verboten in EU Parliament and MEPs offices
    https://www.youtube.com/watch?v=7Dxo518xlN8

    Achtung, Ze Vill Obey [Ursula’s] Orders
    https://www.youtube.com/watch?v=vv8XgIsDeiQ

    Brexit Party MEPs
    https://www.youtube.com/user/europarl/videos

  17. Addition to what Pcar said: the subsidies to farmland owners and pre-existing capitalist factory owners through convergence funding mean the Bulgarian farms have mechanised and shed jobs at a faster rate than if left to market forces. Likewise factories in the poor countries have automated, increased output, closed their competitors who weren’t as clever with the grant applications and overall reduced their labour needs, all at a pace faster than if the process had been left to market forces.
    So the displaced young of the new members come to the countries that ironically provide the funding for the hand-outs that reduced their opportunities back home for entry level jobs.

  18. Gravity models are based on the relative size of each economy and distance between them in the same way as Newtonian gravity relies on the size of two objects and the distance between them. The trade gravity models then try to adjust for factors such as common language etc. The physiocrat point about comparative advantage (grapes) ignores the Leontief paradox that means that a lot of trade amongst advanced countries is in the same types of goods (Europe and USA trade cars and car parts).

    I’m just pointing out that the UK will always trade a lot with Europe because it’s close. Most gravity models suggest that custom unions roughly double trade bilaterally, but I’m not suggesting that the UK will lose half of its trade with the EU because there is substitution effect (trade with others). It’s why I believe in the 3-5% lower GDP over the long run as being the most plausible scenario.

  19. @Pcar – the frightening thing in your second youtube “Achtung, Ze Vill Obey [Ursula’s] Orders” is the other meps applauding when the chair says OBEY!. Easy to see why the continent was in love with fascism/communism.

  20. Dennis, Less Of A Meat Eating Theologian Than Previously Thought

    Being geographically proximate to Europe the benefits of being in a trading relationship via a single market in Europe probably outweigh the benefits of being able to trade more freely with everyone else.

    That’s like saying you’ll marry the ugly, disagreeable girl who lives next door because you can save on the bus fare you’d spend to see the happy, pretty girl who lives across town.

  21. What I did like is the sentence on the Scottish referendum – apparently The referendum from 2014 has to be rerun while Brexit has to be permanently invalidated?

    Has there ever been a more shameless attempt to curry favour with a political party than Snippa’s overtures to the SNP?

    The man is a Foxtrot plus moron – Every single example he puts out in the list is utterly wrong headed – for someone who spends so long on Twitter and in the blogosphere he truly seems utterly oblivious to even basic facets of politics and economics.

  22. Edward Lud said:
    “What’s an ‘Immingham’?”

    Huge port near Grimsby – set up by the railways in Edwardian times and now the biggest freight port in the country.

    Handles over 100 times the freight that Dover does, but because it’s up north the Press (whose only knowledge of the EU is holiday houses in Provence) never talk about it even when they’re discussing post-Brexit trade.

  23. I want out because I don’t want to be ritually abused by a bunch of eurofascists while they empty my wallet and insist I quarter their troops. Trade is just the to icing on the cake.

  24. ” It’s why I believe in the 3-5% lower GDP over the long run as being the most plausible scenario.”

    Given economists can’t predict next years GDP with any accuracy in the long run, always missing or underestimating the recessions, the idea that a number 30 years hence that you can’t predict anyway will be 3-5% lower than it might have been is gibberish.

  25. You wonder how it works for, say, Estonia. Fifty years building up communication routes and “trade” with the USSR and yet, as part of the single market, the routes to and from their natural markets have that external tariff wall in the way and their routes to EU land are complicated by the fact that they only have one border, with Latvia, which is in a similar bind. No wonder their young adult population is leaving in droves. It is surely a huge problem for the future of the bloc

  26. @moqifen

    Yep, and the MEP defending “Obey” by saying “Putting my glass of water on floor not desk is OK, desks must have nothing on them. Heil Ursula”

    Maybe an ingenious MEP will market those old cinema usherette ‘tables’ to other MEPs

    @RichardT

    +1 and Thames ports, Felixstowe etc

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