Monday, 9 April 2018

Free trade is not the answer to the Brexit question

When media speaks of Brexiters they either mean people who voted to leave the EU or they mean Tory MPs on the right pf the party. Increasingly it's the latter. People who voted to leave have largely stopped existing as far as the media is concerned. Especially so when it comes to post Brexit trade debate.

The first thing to note about the trade debate is that there isn't one to speak of. For sure the trade functionaries who seek to own the debate still blether about chlorinated chickens and Daniel Hannan, the Owen Jones of trade, is still promoting is factually deficient theories but on the whole the issue has dropped off the agenda.

One might expect that the Institute of Economic Affairs might have something to say on the subject but they seem to be preoccupied with the sugar tax and the gender pay gap. Trivia when one looks at the bigger picture. One suspects this is because there is just enough knowledge in the public domain to take them to pieces any time they put their heads above the parapet, when all they have to go on is the lunacy of Patrick Minford and the snake oil of Shanker Singham.

What seems to be missing is any sort of objective based roadmap. Trade liberalisation has become an end in its own right where we seek to do deals for their own sake without any reference to the lessons of the referendum. Even if we could say that Patrick Minford's unilateral trade liberalisation would be beneficial, it isn't what people actually want.

By Minford's own estimation, such a radical approach would destroy UK manufacturing when those are exactly the sort of jobs that voters, leaver voters especially, actually want. That is what makes leaving the single market, endangering the automotive industry, a bad idea. Any trade policy should be geared toward further enhancing the profitability of existing value chains rather than broad stroke policy.

We might also read into the referendum that there is a dissatisfaction with with disparity of opportunity between London and the regions. That ought to suggest certain domestic policies which should further inform our trade policy. This tells us we need a well thought out trade strategy with objectives in mind - where we need careful decision making rather than policy informed by Tory free trade dogma.

More to the point, Brexit was not strictly an economic proposition. There are cultural factors in play which come with demands to curb immigration, where again that should inform our trade decisions. I cannot imagine Brexiters voted for a more liberal visa regime with India, nor indeed is the case made for liberalising trade in services where India is concerned.

From the Tories we see abstract ideas like CANZUK or an ambitious USA deal, along with Boris Johnson's mutterings about the Commonwealth, but this typifies the entire Tory approach to Brexit; floating ideas with no reference to what is happening in the real world, no consideration of what other countries might have to say about it, and whether it is even desirable.

The debate is also bogged  down in typical Westminster bubble confusion. Like the Brexit debate we cannot expect a coherent conversation when the participants struggle to comprehend even the most basic terms and concepts. Few seem to understand that trade is a governmental discipline separate to that of commerce. We, therefore, have a battle on our hands just to inform the debate before we can begin to influence it.

There are also intractable contradictions to negotiate. When you put it to an average member of the public whether or not they want free trade, most will say they do, but will be less enthusiastic when the possible implications are set out. One thing this blog has been keen to point out is that any future trade policy will require a great deal of international cooperation through the global institutions as well as intelligently directed aid spending - which is not the most popular view in town right now.

I have previously taken the view that at least some of our aid spending should go toward international development to grow emerging economies with a view to curbing migration. I have since seen thinking that suggests development aid may actually have the opposite effect. This shatters some of my assumptions but then for all the super brains inside the EU they have been labouring under the same misapprehension. We therefore need to ask what will work.

This is not to say that development aid of itself is not still a worthwhile endeavour since more trade in goods overall is more opportunity for our ample services sector. The question is one of how we get the UK to the front of the queue. That is where intensified participation in all of the global forums comes in.

On that matter I get the impression that this is a much neglected domain where we have a handful of generalists attending too many diverse forums failing to appreciate their significance and instead giving undue attention to WTO affairs as though the WTO is the alpha and omega of trade politics. We need to be engaged across the spectrum to make the best use of the global rules based system.

The folly is assuming that on Brexit day with our new found freedoms we can race off and achieve instant and revolutionary results. Nothing in the field of trade happens fast and very little is straightforward. Being that the case, the more radical the mode of Brexit the greater the workload we have and the longer it will take to recover. We may find that by maximising sovereignty our real world power is diminished along with our ability to finance new initiatives.

Of course, though, it is presently unrealistic to expect any clarity or coherence with politics in its current state of dysfunction. With regard to recent events concerning Syria and Russia we see our politicians reverting to their old habits based on their residual self-image of being righteous saviours and a power in our own right. As much as that was a dangerous delusion as members of the EU, it could prove catastrophic in a post-Brexit world.

That, I suppose, is what makes domestic politics the main concern for the time being, where necessarily we will be an inward looking country. We cannot possibly hope to project a vision into the world without a degree of political coherence at home. We need a new domestic political settlement because the "centrist" old status quo has gone forever.

I am am often asked how Brexit is supposed to bring about economic revival when there are so few economic arguments in favour of Brexit. I am still of the view that had we elected to remain in the EU we would have persisted with the narcissistic presentation politics we have known since the early days of Blair, masking the decline and failing to address those underlying issues which were gradually undermining the foundations of British society. Resolving our political dysfunction is a prerequisite to any economic revival.

This is where I part ways with the majority of Brexiters. I do not see Brexit as an end in itself, nor do I think we have a buccaneering free trade future just around the corner. I fully expect Brexit to take a major economic toll and I don't even think that our politics has hit rock bottom yet. Not until the symptoms of our political choices over the decades manifest themselves in intolerable ways will we see signs of a political renewal.

Brexit is not a technocratic two year negotiation. It is the beginnings of a ten to twenty year journey to rediscover who and what we are and where we fit in the new global order. It is an adjustment to our actual status as a mid-ranking post-colonial power where we must reforge our institutions to reflect that reality and purge from our politics the belief that the world is our plaything. Only then will we have an idea of what we want to achieve in the world and a realistic perception of our position in it. Then, maybe, we can have an intelligent debate about trade. 

No comments:

Post a Comment