Friday, 13 November 2015

Unicorns, fairies and Chinese free trade

You are going to hear the repeated meme that the EU has a Free Trade Deal with China. In a word... bollocks. "Free trade" and "China" do not really belong together in the same sentence. We say we have a free trade agreement but I can put on a miniskirt, heels and a ginger wig and say I'm Gwyneth Paltrow but it doesn't make it so (not even close since you ask).

Anyone who has any dealings with China knows that it is a seriously expensive and seriously bureaucratic process where you need to have serious upfront capital in order to gain access to Chinese markets. A lot of British companies turn their noses up at trade with China specifically for that reason. It's expensive and it's risky selling goods to an alien market where we don't have particularly good access to consumer data. 

To trade with China you have to go through our own Foreign Office to get permission and they then help you for a fee to register your brand for approval with the Chinese state. That is an expensive and costly process requiring all manner of certification and proof of rights. Only then are you cleared to sell via T-Mall, the Chinese version of Amazon - but only through a licensed portal, again with large upfront registration fees. By definition, this is nothing even approaching free trade. The notion that China has "opened up its markets" is absolutely risible.

More to the point, no trade agreement comes without a reciprocal arrangement - except we have actually opened up our markets to virtually any old Chinese tat by way of recognising their pisspoor regulatory standards - the enforcement and testing of which is largely fraudulent. As much as the EU got a crap deal for us - we couldn't have vetoed it even if we'd wanted to because we're in the EU.

The way it tends to work with China is that there is a series of existing separate agreements pertaining to specific goods and services. They are replicated with any country that wants one. China is aggressively seeking partnerships all over the world - even with Mexico. The deal that exists with the EU is just a big stack of the existing agreements, not all of which apply to us and some of which we don't even want. Especially their death-shed automobiles. If we left the EU we can pick and choose the ones we want and it's no major diplomatic effort to do so. We have a specific division of the Foreign Office dedicated to precisely that.

If you see any europhile scaremongering about losing proxy access to the EU-China "Free Trade Agreement", (which we wouldn't) the correct response (after you've finished laughing) is "big. fat. MEH!"

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