Wednesday, 8 June 2016

Nobody move or the exporters get it!

From Sky News:

British exporters are at risk of paying up to £5.6bn in duties if the UK votes Out, the head of the World Trade Organisation says.

Although director-general Roberto Azevedo believes Brexit would not stop the UK from trading with international partners, during a speech in London he warned "it could be on worse terms".

The WTO chief also said "it is impossible to tell how long it may take" for the UK to re-establish terms of trade within the EU - and said negotiations in the past had been known to take 10 years or more.

We've done this one. The UK would have no problems getting the same tariff-free terms as Iceland or Turkey, that is EU policy; or the UK could remain in the EEA/rejoin EFTA. As to third countries, there is the basic principle in international treaties that we would continue on the same terms. For example when Czechoslovakia split into two, each new country entered into a double tax treaty with the UK on identical terms to the old UK-Czechoslovakian one.

More to the point, this is the head of the WTO talking. His organisation is there to try and remove trade barriers and tariffs, and has been doing a reasonably good job over the decades, albeit at a slow pace. So it's like the police warning people to stay away from certain streets instead of policing them properly.

If he were taking his job seriously, he would be issuing a stern reminder to the EU that Brexit is not an excuse for stupid retaliatory mercantilist meaures.

As I've said before, I'm as cautious as the next man, if TPTB could come up with a couple of really good arguments for Bremain, then I might chicken out of voting for Brexit, but so far it's just been complete crap.


Bayard said...

"but so far it's just been complete crap."

The whole debate has been a Gargantuan crapfest on both sides, unfortunately. It looks like the winner will be the side that told the most convincing lies.

Mark Wadsworth said...

B, at leasts the Brexiteers are saying "we could do A" or "we could do B", whether or not you agree with A or B, those options are currently closed to us. And just because lots of Brexiteers are racist etc doth not make the EU a good idea.

Random said...

Why does it matter anyhow?

Do the simple experiment. Take everything you earn on import tariffs and use it to subsidise your exports. Expect the other side to do the same. Where do you end up?

Tariffs are about making your internal stuff cheaper than external stuff and encouraging external to internal substitution. If a price of a good goes up, less is bought. So foreigner has to reduce price in Sterling if they wish to maintain volume.

Tariffs just mediate between local and foreign stuff. They don't shift overall prices or volumes that much.

Bayard said...

Mark, on balance, I would agree, I think the leave camp has the stronger arguments, but they have not resisted the temptation to answer crap with crap, sadly.

Lola said...

R. Yes. In effect tariffs are a tax on the citizens of the country that applies the tariff

Dinero said...

"British exporters are at risk of paying up to £5.6bn"

is that actually correct - is it not importers who pay import tariff invoices.

Dinero said...

I thought this would give folks here a laugh - the Galliard homes "brexit guarantee" ,

white box top of page here -

DBC Reed said...

What doth make the EU a good idea is that it is a guaranteed free market of 500 million people, that we are not part of the Eurozone,or the Schengen borderless area and that Scotland remains part of the this country while we are EU members.
That we are not making as much as we could of the EU now, is down to our Horror comic property price levels which take top slice off our possible spending on goods and services. Since we have to import many of these goods from low wage areas of the world,we have not developed class goods for the home market that we can export.The contrast is always with Germany with its high-wage/low rent regime: HP/E ratio 11.2% UK 81%
If we jump off the Shard with Boris Johnson squealing Freedom! survivors will have to address the same price/rent problems but under immense pressure what with Obama and Merkel saying we will be at the back of the queue for alternative trade deals.
The events at parliamentary committees showing national High Street institutions in the hands of a rabble issuing death threats at management level will probably mark the end of the deregulation pipe dreams of Lola and a return to something like public capital- private sector partnerships if handled skilfully by Corbyn and McDonell.
This referendum is not our fight as the basic problem of low wage/high rent will have to be addressed under either trading system.
At least with Remain we stand more of a chance.

Lola said...

DBCR. Small correction. We don't have a low wage/high rent problem. We have high wage/high tax/high rent/regulation problem. (The regulation adds considerable deadweight costs).

I actually agree that a Brexit won't in itself, attack those issues. But having recovered full democratic control we have more of a chance of doing so. The EU is one of biggest rent seeking organisations on the planet, so has no interest in or intention for reform.

Furthermore, the EU will end up at land taxes - it has little else left to tax - but they will apply them as an additional tax, which is not what you and want, is it?