Thursday 2 August 2018

Defying gravity

There was a story in yesterday’s Western Mail about discussions between Liam Fox and Japan, which reported that Japan has promised to back the UK’s bid for membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after Brexit.  (I haven’t been able to trace an online version of the story in the Western Mail itself, but it appears to be a syndicated story from an agency, because the same story with the same wording also appeared in the Daily Express.) 
It’s clear that Fox, like most of the Brexiteers, believes that it is better to have an agreement with countries a long way away than one with those nearest to us, as though that can somehow make up for the loss of opting out of the more local agreement.  It completely ignores the gravity model of trade, but that should not surprise us given that Fox’s own cabinet career has itself been remarkably resistant to the normal rules of gravity.
As the New Zealand Trade Minister explained in this report, one of the drivers for the agreement is that “CPTPP has become more important because of the growing threats to the effective operation of the World Trade Organization rules”, although I’m sure that isn’t quite what Fox and the rest of the Brexiteers have been telling us about the WTO option.
However, it was the final paragraph of the Western Mail/ Daily Express report which really struck me:
“Eliminating tariffs and quotas between members and involving mutual recognition of regulations and rules on cross-border investment, CPTPP is seen as a swifter and more effective alternative to forging separate trade deals with individual member states.”
Now there’s a vision.  A free trade area encompassing some of the world’s biggest economies coming together to agree a common set of regulations and rules, which will apply to an increasing range of goods and services over time instead of a patchwork of individual bilateral agreements.  It’s such a brilliant idea, I can’t think why no one has thought of it before.  It’s a pity that there’s nothing similar closer to home, in Europe say, that we could join instead of going half way round the world and pretending to be on the Pacific Coast.  Oh, hold on a minute…

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