A not entirely accurate map Credit - Wik

It’s a basic truism that no free to freeish trading arrangement can be worse than autarky. Trade simply does make us richer, richer than any possible closed system. After that the only argument becomes, well, how many people are we going to have free trade with? Which is where the Japanese ambassador gets it wrong over Brexit and the Single Market:

For Japanese enterprises which came to the UK to sell into EU markets, tariff-free trade is the guiding star that decides where they locate.

“The reason that many of those companies have come is that this is the best gateway to Europe,” he says. “If that is in danger, if that is no longer sustainable, of course they will have to look at what they will have to do best. The existing arrangement for the single market is a total frictionless trade.”

He believes membership of the single market is as good as it gets for Japanese firms wanting to sell into the EU from European bases. “The EU is a very exceptional single market. I don’t think the single market could be substituted by something and be better or even be the same.”

That might well be entirely true. In fact I can imagine that it is. But we don’t run the economy for the benefit of producers – or at least we shouldn’t. Which makes what is being extracted from this interview wrong:

Britain will not get a Brexit deal better than the current single market, it has been claimed.

Britain can gain a very much better deal than the Single Market. For those EU trading arrangements do indeed allow free trade across the EU. But they also limit, significantly, trade with non-EU members. That is, we’ve limited ourselves to free trade with 500 million people rather than 7 billion.

Brexit allows us to have free trade with 7 billion, making us better off. Do also note that the true benefit of trade itself is the imports. No, not the effects upon producers of being able to make exports, but upon consumers of gaining access to imports.

We, as in “we,” the peeps of Britain, will be better off outside the EU and declaring unilateral free trade. As Patrick Minford has been pointing out for more than a decade now. And given that the country should at least be run in the interests of us “we” then that’s what we should be doing, isn’t it?

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1 COMMENT

  1. Trump recently has shown refreshing clarity that the US’s alternative to the TPP is not no trade at all, but trade treaties with each individual country on the Pacific rim. However, as always, he views these treaties not as things that maximize individual action but with constraining terms that Trump can negotiate and thereby “win.”

    Unfortunately, the “renegotiation” of the North American trade treaty continues apace, with Ford Motor at the table demanding a rewriting of the terms that make a car North-American-made. This is not for the sake of Americans who wish to buy Hyundais. Again, the only thing wrong with NAFTA (other than being 1000 pages too long) is that Mexico broke it and raised its sales tax, which hits US goods and not Mexican.