The Damage From Reduced Tariffs On US Food Is Exactly The Benefit To The UK

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As is usual when talking about trade we’ve got one side of the argument entirely misunderstanding the subject. The claim is that if the UK cuts tariffs on food imports from the US then this will damage UK farming. Yep, it will. That damage will be exactly and precisely the benefit that cutting tariffs on US food provides to the UK. Because the point if all of this having an economy stuff is to enable consumption. The point of trade is to be able to have the stuff that Johnny Foreigner does better or cheaper than we dowe do.

The UK government is drawing up plans to slash tariffs on US agricultural imports to advance progress on a trade deal despite concerns from some ministers and Conservative MPs about the damage they could cause to British farming.

Another way to make much the same point. The current restrictions allow UK farmers to charge UK consumers more than they would in a free market. So, we reduce those restrictions and the amount UK farmers can gouge UK consumers reduces. The benefit to the UK of reducing the restrictions is exactly the amount of that lesser gouging. Or, the benefit is precisely that amount by which UK farming gets damaged.

That is, if UK farming were not to be damaged by free trade then there would be no point in having free trade. For free trade wouldn’t change anything thus why bother? It’s the very fact that there will be damage which is the justification for the free trade.

Let us not forget that the great flowering of British living standards happened after the Engels Pause, after the abolition of the Corn Laws. The very laws that meant that the benefit of the Industrial Revolution flowed to the capitalists and landlords rather than to the workers. Why wouldn’t we be in favour of the workers, now as in 1846?

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john77
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john77

The gain is actually a bit more than that because reducing or removing tariffs on US imports will cause some other farmers from whom we import food to reduce their prices and profit margins in order to remain competitive. Food importers (like the UK) want low prices, food exporters (like France and Denmark) want high prices. Reducing tariffs will reduce the amount that we pay to keep Danish and French farmers in the lap of luxury.

Chester Draws
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Chester Draws

Most French farmers are very modestly remunerated.

They last that way, with ridiculously small farms and labour-intensive methods, because the white heat of modernity is not put on them.

It’s a stupid system, kept only for nostalgic reasons. But they are glorified peasants.

BlokeInNormandyFromTejas
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BlokeInNormandyFromTejas

I do believe it’s kept that way because otherwise they will go on strike and block the Peripherique, causing untold inconvenience to the fonctionnaires living and working there.

John B
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John B

They do have small farms thanks to inheritance laws since the Revolution, but much of the land is poor, suitable for a few goats, sheep, chickens, ducks or wine-grapes. They do live largely off Government subsidy (CAP), and augment income from summertime tourism which gives a huge boost, so the crazy French Covid-19 rules are going to hurt. It is indeed a stupid system, kept not for nostalgia but in the absence of any other work in rural areas, the rural economy would collapse and since rural economy in France is very large in terms of the number of population… Read more »

Leo Savantt
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Leo Savantt

There can be benefits to UK farmers, the USA is a huge market and one that enjoys luxury products. Angus beef and mature cheddar as well as added value products made from local agricultural ingredients such as fine whiskeys and Theakston Old Peculier (a personal favourite of old) can find markets in America. No doubt UK wheat producers will be hit, but growing wheat in England, being the second most densely populated country in Europe, is perhaps a complete waste of space, which isn’t the case in the US prairie. Overall, as the abolition of the Corn laws demonstrated, freer… Read more »

Bruno
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Bruno

No doubt. I’m told the explosion in flavoured gin is partly down to the need to find new markets for British sugar beet production, post Brexit. ( Expect it’s all going into hand sanitizer at the moment, who’d have guessed that a year ago?) But how far is food similar to PPE, how much domestic food production do we need to subsidise, for security? Any?

John B
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John B

None. If there is no alternative source it won’t need protecting and will fetch a good price.

Boganboy
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Boganboy

Unlike a century or so ago, I don’t consider Britain’s in any danger of blockade at present, so it might as well take advantage of free trade.

Of course if this was about buying oil from the Middle East, or that crazy plan to have all its energy generated by solar power in the Sahara, I’d have a different opinion.

john77
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john77

The plan was to have *some* of its energy imported from the Sahara when the use of fossil fuel to generate electricity is banned in Europe (but not, of course, in China). In the context, the proposal is *not* crazy, just pretty wasteful compared to using Norwegian hydroelectricity as a storage mechanism when the sun doesn’t shine and/or the wind doesn’t blow. Sadly Denmark needs Norway even more than we do.

Boganboy
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Boganboy

My objection is really political, not technical, although I’d say there’d certainly be technical problems as well. At present, Britain doesn’t really need to worry about the North African countries, except perhaps to help Italy tow the illegal immigrants back to Africa. But if it obtained a large portion of its energy from North Africa, especially in the form of solar electricity, which would be very difficult to store, it’d leave itself open to endless pressure from embargoes, sabotage, cartels etc. If the UK simply abolished the regulations against fracking, or perhaps bought GE Hitachi’s breeder reactors to provide its… Read more »

Quentin Vole
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Quentin Vole

I guess you’re (rightly) ignoring various insignificant flyspecks (Monaco, Vatican City, San Marino and Malta), in which case England ties with NL for the coveted title of ‘most densely populated’ (who’s ahead usually depends on whose census was more recent). But Central England (without the far North, E Anglia or the W Country – where 80% of the population live in half of England’s land area) has over 700/km². That’s 2.6x the population of the NL in 1.5x the area.

Leo Savantt
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Leo Savantt

Yes, basically I was ignoring all of those but Malta. The Netherlands is just behind England and has 393 people per square kilometre, whilst England has 407, Malta is way ahead with 1,260. Monaco, which is not a country but a principality, has a massive 18,369. The least densely populated European country is Iceland, with just 3 people per square kilometre.