onsdag 1 november 2017

Free trade argument continues

If you were able to coherently tell us what your point is then I would be happy to answer.

I have but you cannot see it. It is an example of the head-vase illusion; if you are convinced there are two heads you cannot see the vase.

There is an almost universal habit of considering trade relationships through the wrong end of the telescope. It gave rise to the mercantilist principles which dominated in the seventeenth century, and were rebutted in the second half of the eighteenth, when the principles of free trade were established under the influence of Smith and Ricardo . Free trade took hold strongly in Britain in the nineteenth, the high point being the repeal of the hated Corn Laws in 1846, which were reinstated in 1973. Protection dominated in the US throughout the period; the damage done to the US economy was chronicled by Henry George in "Progress and Poverty".

Post 1945, mercantilism has crept back in the guise of populist/nationalist policies promoted by sloganising such as "Buy Home Produce". The British Empire was at it during the inter-war period, the EEC/EU has always been at it, Trump is at it. It exacerbates international tension, as is summed up in the the quote “When goods don’t cross borders, soldiers will”, attributed to the 19th century French Liberal economist Bastiat.

Your beef seems to be the entire notion of a trading block, i.e. it should be open to all and sundry. 

Yes. I am against the entire notion of a trading block. They only happen because of the habit of looking at this the wrong way round. Open to all and sundry implies that importing is inherently a bad thing and must be controlled. That is an interference with a basic human right. People should be free to purchase from whoever they wish, regardless of whether they are on different sides of a national border.

I am afraid they don't work like that. The bull comment was flippant, but I stand by my point - you wilfully ignore the legal framework/current reality.

The current framework is not a divine ordinance. There is nothing to prevent any individual country from opting out of the game and allowing its own people to decide what they want to buy. If it is a good thing to restrict movement of goods across borders, why not have such restrictions around every town in the land, to discourage people in Oxford from bringing in goods from Reading?

And yes for my sins I am a lawyer that works with EU law in their day job.

I am surprised. I would have expected a lawyer of all people to read carefully and ponder what was said. Would you say you are a disinterested party in this debate?

Also you have switched from supply chain parts to seemingly finished products - different arguments. What is your point regarding those specific products? Simply that they are not substitutable? I think cross elasticity of demand would say otherwise given competing products are freely available. 

It is the same problem. Purchasers will have to find alternative sources or adapt to different products. I never said that it was impossible, but there is cost and inconvenience. There is, for instance, a flourishing microbrewing industry in Sweden. The raw materials grown in Kent and Essex need to be handled differently from their German equivalents. The producers will have to spend time fiddling about to get the process to work properly

Never heard of mutual recognition or complying with standards?

Standards exist outside the EU or indeed any particular trading block. Ultimately, trade is driven by demand. Suppliers have a vested interest in keeping their customers satisfied in the long term. The EU's standards are not always guided by sound principles. A few recent examples include the ending of the Esbjerg-Harwich passenger ferry due to fuel regulations which made the service uneconomic, the regulations on electric lamps which created a residue of mercury waste, and railway technical standards which were the reason why further railway electrification in Britain has been cancelled.

Nor are the standards even adequate, which has led to the development of voluntary schemes such as KRAV, Bra Miljöval, covering issues like animal welfare and residues in food.

1 kommentar:

Robin Smith sa...

Good one. People will not agree if it means analysis of current world view, which generally in society is protectionist. But its always been like this, this is why religion has been so dominant - each has a despotic protecting father figure who its forbidden to question. Today government is starting to dominate. Taxation is the same kind of thing as protection money, collected by the gang members. This is why gang films are so popular and artistic metaphorically.

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