The Caucasian Country Club

club.PNG

(Members only) Lovely in here all posh and everything.

I don’t what to be in a private trade club of the elite and predominately Caucasian countries. I want to trade freely with the world of Asian, African, Latin American too.

Regarding trade what is the size of the consequences, good and bad, of leaving this protected environment?

Day one proposition. The world average trade deals seem to apply tariffs less than 5%. So offer the EU 5% on everything by which I mean they can charge 5% tariff on all goods we ship to them if they want to. I’ve chosen 5% as an over estimate (yup see other post). In return we put 0% tariff, nothing, nada on goods we import from them. What! They have got to be happy with that, haven’t they, you are giving them a great deal. Bear with me. Yup this is a scenario where we get a worse deal with the EU which will have some impact on some businesses, definitely. The percentages are small so I’d suggest that in many cases the consequential impact might be manageable. I don’t mean to under estimate the difficulties that might be created, I do mean to point out how able UK businesses and business people are at coping and adapting. And remember 5% is an over estimate to make things seem as bad as possible to make my point that the worst case is not necessarily as bad as you might believe.

But on the upside we would be free to do deals with the rest of the world. The current lack of decent trade deals with the rest of the world is crippling some business, in fact there are loads of businesses that simply don’t exist because of the EU. So in some cases the consequential benefit could be very very big.

So business gets a bit more difficult in some areas but on the up side whole new businesses become possible where they weren’t before. Smaller downside, bigger upside than you might guess from the news?

There is a balance here somewhere that I’m not hearing anyone talk about.

There was an example of each case on a recent program. A cheese maker who sold cheese to France, yes his business might be a bit more tricky if there was a small tariff on his exports to France. On the other side a hovercraft manufacturer who can’t sell to Brazil at all because there is what sounded like a 100% export tariff on her hovercraft exports to Brazil. So that whole business is just impossible because a 10 grand hovercraft costs a Brazilian 20 grand. If we did our own deal with Brazil she could sell loads of hovercraft.

Why is it so bad for trade to leave? Is it really as black and white as Remain are saying?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s