Thursday 13 October 2016

Bremoaners and Brexiteers shooting each other in the foot.

Going back to that BRC letter...

Falling back on to WTO rules would also increase the cost of sourcing from beyond the EU. The import cost of women’s clothing from Bangladesh would be 12% higher, while Chilean wine would be 14% dearer for importers.

Yes, we would expect the UK to remain a member of the WTO which is an advisory/co-ordinating body rather than a supra-national quasi-government. The obvious point is that the WTO has no rule stipulating minimum or default tariffs.

(Nobody questioned why the BRC specifically mentioned Bangladeshi clothes or Chilean wine. It turns out that they were cherry picking:

Bangladesh has been a WTO member since 1995 and, as a least developed country, benefits from the EU's "Everything but Arms" arrangement, which grants duty free, quota free access for all exports, except arms and ammunition.

The EU and Chile concluded an Association Agreement in 2002, which included a comprehensive Free Trade Agreement that entered into force in February 2003. The EU-Chile Free Trade Agreement is broad and comprehensive and covers all the areas of EU-Chile trade relations.)

Daniel Hannan, who is good on principles but useless on facts fell for it, as gleefully reported by The Daily Mirror, and tweeted thusly:

This is idiotic. Chilean wine 14% more expensive? It's currently subject to a 32% EU tariff, which we can now scrap.

Haha! cry the Bremoaners, he didn't know that there was an EU-Chile FTA! Others pointed out that the EU default tarrif on wine is 8p per bottle (although some official sources did incorrectly give the figure as 32%, which is about par for the course for EU tariffs on food, so a forgivable mistake on Hannan's part). So, they argue, Hannan's lack of grasp of finer detail undermines his general point! No it doesn't. His general point was and is sound.

And so bloody what? The BRC were clearly cherry picking examples, thus making their whole letter questionable, and they still haven't explained where it says that WTO members must impose a minimum tariff of 14% on imported wine. Because it simply doesn't, I've checked.

The final point is the general principle of continuity of international treaties, so if the UK leaves the EU, we are then almost automatically in a UK-Bangladesh FTA and a UK-Chile FTA on the same terms and conditions as the EU-Bangladesh FTA or the EU-Chile FTA, and so on, until and unless one party abrogates it.

6 comments:

Bayard said...

The thing about the Bremoaners (good word, BTW) that gets me is that they'd rather there was economic disaster on leaving the EU and everyone suffered, so long as they were proved right, than that there was an economic improvement and everyone benefited, but they were proved wrong.

Mark Wadsworth said...

B, true. But to some extent Land Value Taxers are guilty of this, so best not to throw stones...

jockox3 said...

Thanks for confirming. I saw something about having to impose tariffs on imports and immediately thought "that's got to be bollocks, surely it's our decision as the importing nation". Why would anyone be part of a regime that forced you as a country to increase costs for everyone?

Mark Wadsworth said...

J, problem is the BRC letter itself is not publicly available.

Lola said...

A free trade agreement is by definition a de facto tariff agreement. The whole idea of an FTA is nonsense. Free trade is free trade end of

Lola said...
This comment has been removed by the author.