Thursday, 5 April 2018

The EU is not alone

According to the Brexiteers, the ability of the UK to sign new ‘free trade’ agreements with other countries across the world is one of the great prizes open to us following Brexit.  Unburdened by the need to act collectively with the other 27 members of the EU, the UK will be able to negotiate directly with a host of other states.  And having what they now admit will necessarily be ‘less free’ trade with the EU27 is, in their view, a price worth paying to get to that position.  (I understand, and have considerable sympathy with, the argument put forward by some of the so-called ‘left-wing’ Brexiteers that the UK could negotiate fairer deals with developing countries, who can at times be subject to exploitative deals by large blocs like the EU.  I somehow doubt, however, that concern for the exploited poor is uppermost in the minds of the Tories who are actually driving Brexit.)
One of the little-discussed flaws in this picture of the world is that the EU is not as unique as is often claimed.  It may be the most developed and integrated free trade area, but it is far from being the only one.  Other common markets and customs unions exist elsewhere.  There are many countries which have recognised the benefit of acting collectively on a regional basis to boost trade amongst themselves and to negotiate collectively with the rest of the world; and they see the EU as an example and are working towards a similar level of economic integration.  It’s also one of the ways in which developing countries can respond more powerfully and collectively to any attempt to impose exploitative deals upon them.  But here’s the thing – when negotiating a trade agreement with any country in relation to products which are covered by the provisions of another customs union or common market, the UK will need to talk to the relevant bloc collectively rather than discuss the deal with the individual states.
It raises a simple enough question.  In a world increasingly coalescing into distinct regional trading blocs, which is the best route to increasing free trade between them rather than purely within them?  (That is, is it not, a key part of what the Brexiteers say that they want?)  Is it, as the Brexiteers claim, for individual states to break free from their existing collective agreements and negotiate directly with each other on a bilateral basis creating a multiplicity of different and unique agreements, or is it for the regional blocs to talk directly to each other leading to a smaller number of more comprehensive deals? 
The answer to that question was blindingly obvious even before it became as clear as it now is that leaving an existing trade bloc introduces more trade barriers than it removes.  That in turn raises a supplementary question – if the Brexiteers know that their approach is going to lead to less free trade overall and a much more complicated set of agreements, why do they persist in arguing that ‘free trade’ is their prime objective?


Jonathan said...

But free trade is not their prime objective. If it were, they would stick with the EU. The EU is likely to work with the US and follow the loosely liberal consensus as to world trade and to do away with both tariffs and borders to a large extent. The EU has not got there yet, but such is the trend. The US under Trump is putting up a show of isolation - it is the US after all - but they too are on the liberalising trend in the longer term.
But we have to examine what other tendencies exist. One of them is nationalism. We feel it in Wales after all, don't we? We are trying to assert Welsh sovereignty.
And so are the Brexiteers.
In my view sovereignty is more important to the Brexit lot than free trade. Sovereignty/patriotism is a mess if you are English/British. You don't have the clarity an American does - sign up to a written Constitution (and flag) and you are in. Britain has intangibles: Queen, Country (which one?), fair play, Agincourt, the Battle of Britain. I think Brexiteers do have a vague idea that mercantilism is up there with cricket and part of the English spirit, like the King James Bible or HMS Victory. But take Sir Francis Drake or Clive of India or Plasau :( Talk about mixed motives. But it is not historically true that Britain has been mercantilist, like Venice, Hong Kong or Switzerland. We never had pure Free Trade in the 19th Century. We had adherents, yes, but the Empire was more important.
My conclusion is broadly the same as yours, that the Brexiteers don't really do reality and decieve themselves and us - if we let them.

John Dixon said...

"But free trade is not their prime objective. [...] In my view sovereignty is more important to the Brexit lot than free trade."

I completely agree with you on that. The problem is that they keep trying to pretend the opposite, doubling down on the lies and half-truths. As an independentista, I have a lot of sympathy with the idea that sovereignty has a non-monetary value (or perhaps price) which can be set against the purely monetary cost of a loss in trade or GVA. That's true for all sorts of things - we value democracy over dictatorship, for instance, and I think more people would still do so even if dictatorship produced better economic outcomes. But my definition of the 'sovereignty' that I seek is rather different, and more twenty-first century, than that of the Brexiteers, recognising that we live in a more connected world where no one power can 'rule the waves'.

The problem is (as you have identified well) - they don't really understand what this 'sovereignty' is. It's ill-defined and means many different things to different people. About the only thing we can say is that the 'sovereignty' sought by Brexiteers owes more to an incomplete and faulty understanding of the past than it does to the reality of the modern world.

That also puts a slightly different perspective on your comment that "We never had pure Free Trade in the 19th Century [...] the Empire was more important." To some of them, that was what 'free trade' meant then and today - the ability of the imperial power to impose trade terms on others. One only has to listen to the words some of them use to conclude that they still think that they can do that. It's a central part of their delusional view.