Thursday 29 October 2015

Trade Agreements: A Very Pressing Concern

Somewhat to my surprise we have not written about the TTIP on C@W.  It's a front we need to open up:  should be a rattling good C@W topic; plus, trade agreements are becoming a hot issue.

The proximate reason for my mentioning this is the latest twist in the slow-burning EU referendum fuse.  Cameron declares there's nothing for us down the 'Norway' route, and some of the 'outers' agree.  The USA warns that we needn't think we'll get an easy trade deal with them, we'll languish out there on a par with Brazil, India & our new best friend China.  Of course, others think the Norway option - complete with trade agreements - is pretty good, at least as a staging-post

Everyone (I hope) knows how important trade agreements are: the anguished cry of most people of my generation (who voted 'yes' in 1975) is - I voted for a free trade area!

So supposing that the increasingly shrill (and a wee bit premature?) Project Fear is spent by 2017 and we vote to leave.  How will we find our terms of trade then?  There seems to be a view that come the day, since everyone really wants to trade and is nowadays a member of the WTO, we'll strike bilaterals easily enough, with blocs and individual nations.  Maybe Brazil, India and China aren't such bad company to be in.

Is this right?  Since the TTIP seems to be America's view of what constitutes a trade agreement: a piece of paper so outrageous that not even MPs or MEPs are allowed to see it without swearing to secrecy on their old Granny's grave (reminiscent of the South Sea Bubble venture: "a company for carrying out an undertaking of great advantage, but nobody to know what it is") - what sort of bilateral does a medium-sized country strike with the USA nowadays?  Doesn't sound a happy place to be.

Then we consider what would need to be done vis-a-vis the rest.  I heard an Indian cabinet minister speak recently, and he said: you may find me being described as uncooperative in WTO circles.  That's because my price for anything the rest of the world wants is 200 million work permits for unemployable Indian subsistence farmers.  China?  We've already seen George offer to sell the farm to be their best friends.  Brazil and the rest of Latin America?  You can say goodbye to the Falklands - and dealmaker George 'strategic' Osborne is just the man to do it.

Hmm, a knotty subject.  Perhaps that's why we've steered clear ...



Electro-Kevin said...

The EU has adopted greenism and human rights.

Such as China should not be allowed to trade with the EU until its factories comply too - certainly not in areas that put our own environmentally (and human rights) friendly factories out of business.

Otherwise our progress in those areas is lost to the world.

DJK said...

EK is right that there is no such thing as free trade. Equalising tariffs is only fair if labour and environmental standards are the same on both sides.

On trade agreements, Switzerland seems to be able to trade quite happily without having to grant 200 million Indian visas. Provided both sides have something the other wants then trade is mutually beneficial and agreements can be reached. But then Switzerland still makes things the world wants. As a result, they have a balance of payments surplus of 7% of GDP whereas we have a deficit of 5% of GDP.

andrew said...

As DJK said,


Our major strength is financial services (for better or worse).
These depend on open and fair(ish) trading.

All we have that other people want is capital and relatively footloose banks (that hsbc didnt move means they aren't as footloose as some think, but there is a breaking point)

Do you think other countries will say

a)'fine, lets carry on as before'
b) The 'preciouss is mine nowww'

In the same way that the US is busy structuring the rules of world IP and trade to suit them for the next 100 years, any new agreement will be on their terms

or the EUs terms or China's terms or Spain's terms (gibraltar) etc etc

because if we leave the EU we need them more than they need us.

If you think the WTO will help, please ask any other small country (Antigua and online casino offerings into the US) how that is working for them.

CityUnslicker said...

All the lefties are aghast at TTIP; it must be brilliant news by definition.

MyHalfBloodyTermName said...

@CU - of course, nothing to worry about governments signing secret agreements; must be brilliant!

Little short of fascism this lark.

DJK said...

It's taken as axiomatic by our leaders that more trade is always good. But is it? If the price of more stuff from Asian slave factories is liquidating British jobs or borders or overseas possessions then I don't see where the advantage is (vested interests apart). Protectionist is thrown out as catch-all insult, like nazi. But what is so wrong with wanting to protect what you have?

Anonymous said...

Sterling has just hit €1.40 - so much for "free" trade area in the EU.

On the other hand, my hols next week will be cheaper.

James Higham said...

A fullrigged threemaster, Nick - lovely boat.