Monday, 18 June 2018

Like it or not, trade costs money.

I have no doubts that Britain can operate a successful independent trade policy after Brexit but not if we leave the single market. You see, trade costs money and it takes time. It is not beyond our wits to negotiate reciprocal tariff free arrangements but that does not mean the trucks start rolling. The EU has this exact same problem in that African and Asian producers struggle to meet the standards.

What we are looking for is not one off trades, but to establish lasting value chains where eliminating tariffs doesn't even begin to address the issues. For a start a lot of African ports are not capable of servicing more trade. There are several issues.

The lack of dredging of shipping channels means some ports are now no longer capable of accepting the bigger ships and can only take some classes at high tide. We'll need to spend money there. That dreaded foreign aid thing.

But let's say we sort that out, it's no good accepting Nigerian agricultural produce if they don't meet the standards - so we have to invest in training and equipment to meet our safety requirements. And what about logistics?

Lagos port frequently experiences missed tides because of congestion - where the tailbacks go right through the city lasting sometimes over 14 hours. even with advanced refrigerated containers that still means spoilage. And they are not cheap to run.

So we are then looking at port modernisation, improvements to road infrastructure, standards governance, elimination of corruption, traffic management and a whole host of things that could open up services opportunities in an aid for trade framework.

But here's the rub. It's going to take a very long time and it's going to cost a lot of money. How then are we going to finance this if we have dramatically pruned our European exports by leaving the EEA?

Ultimately the goal we share with Europe is to stem the flow of economic migrants and this can only be done by improving the economic prospects of Africa so our trade policy must be part of our foreign policy and central to that is foreign aid.

We now know that Trump's trade promises are not worth the paper they are written on and the EU has already entered a trade space race for Aus/NZ trade so we are at the back of the queue. That means we must preserve our EU trade at the very least.

The short of it is that no mixed bag of international FTAs is ever going to rival or substitute the high level of technical integration that facilitates the levels of EU commerce we currently have. "Global Britain" said without substance is just a moronic talking point.

Moreover, our goals for external trade are likely to be so expensive that we'll want to coordinate with both Efta and the EU. Irrespective of Brexit we will still want a high level of economic and political cooperation with the EU. Britain is no superpower and we need allies.

This is another area where we are ill-served by "free market" think tanks who assert that the elimination of tariffs alone is all that's needed to stimulate trade. Particularly the idiotic Taxpayers Alliance who have a knee-jerk reactionary attitude to foreign aid.

UK investment in curing crop blights not only prevents African agriculture from collapsing, it is also essential to trade and provides opportunities for UK research services. Similarly investing in immunisation can stop mass exodus by reducing outbreaks.

These projects may seem peripheral to trade but the UK is a services and knowledge exporter and that means we need an active foreign policy centred on international development. Creating overseas markets means more trade for them thus more business services for us.

Instead we get the juvenile mantras about "fwee twade" and spending foreign aid money on public services. The latter being the very antithesis of the "global Britain" we were promised. It's the very isolation these such think tanks claim they are against.

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