Guy Verhofstadt has decided to take time out from politicking to be a President of Europe to teach us all about the merits of free trade agreements. In which he entirely and absolutely fails the trade module of his Economics 101 course. Sure, par for the course for a federast but still, amusing that he parades his ignorance in the national press.
The error is this:
The real global trading power, of course, is the EU, which has recently concluded trade deals with Japan, South Korea and Canada. As an EU member state, the UK automatically benefits from the 40 trade agreements the bloc has in place with more than 70 countries. If the UK opts for a “hard” Brexit and leaves without a deal, as Johnson has indicated he is willing to do, it would immediately lose preferential access to markets that account for around 11% of its total trade.
Trade isn’t about access to other peoples’ markets. It’s about what we let into our own.
Moreover, the EU is finalising negotiations for a new free-trade agreement with the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – as part of a broader association agreement between the two regions. That will cement the EU’s position as the global leader of open trade. Though European companies already export a great deal to Mercosur – €42bn in goods in 2016; €22bn in services in 2015 – tariff barriers are currently high. European exporters face levies of 35% on cars, 20-35% on machinery and related components, and 14% on pharmaceuticals.
What other people charge themselves on our exports doesn’t matter a toss to us. What does make a difference is what we charge ourselves for the temerity of buying off Johnny Foreigner.
Just to repeat for the hard of understanding – or federasts but I repeat myself – the aim, point and purpose of trade is access to the imports. Those things that J Foreigner does better, cheaper, fancier or faster than we do. Exports are just the effort that we put in to gain access to them. The only logical stance to have upon trade is therefore unilateral free trade. This is not what the European Union does nor what anyone in power within it believes. Therefore we’re better off out so that we can ourselves adopt this only logical stance.
At which point, Mr. Verhofstadt, stuff that in your Mannekin Pis and leave us alone to be sensible.