“Access to the single market” a chimera.?

[mro...@btopenworld.com]

Roger Bootle - chairman of Capital Economics (Telegraph)

" countries all around the world that are not members of the single market have managed to export into it so successfully. “Access to the single market”, so powerful as an image, is in fact a chimera."

[...]

"it is with regard to the subject of the UK’s exit. Some politicians and businesspeople talk of the UK “crashing out” of the EU. Another metaphor is of British business facing “a cliff-edge”. They say that without a deal, the UK would “fall into the clutches of the WTO”.

It is as if the World Trade Organisation (WTO) were some sort of monster that devours its members – especially juicy new ones like us. In fact, the UK helped to set up the WTO in the first place and has remained a member all along, albeit with our seat vacant because our trade policy has been run by the EU. On leaving the EU, we would simply take up our seat once again.

Mind you, Remainers often portray trading “under WTO rules” as a disaster. At the very least, it supposedly represents a step into the unknown. Yet this simply means trading with countries without having an FTA and using WTO rules to govern trading practices. As part of the EU, the UK already trades under WTO rules with over 100 countries around the world, including the United States (our largest single export market), as well as China, India, Brazil and Singapore.

This arrangement is often described as the “WTO-only option”. But because this sounds so Spartan and threatening I have suggested that we should instead refer to it as “the American option”.

After all, without an FTA between the EU and the US, “WTO-only” is the basis on which trade between them takes place. Suddenly, it does not sound so threatening."

"In saying this, I am not suggesting that there are no sorts of agreement that can and should be signed. In particular, there are various technical arrangements called Mutual Recognition Agreements (MRAs) without which goods trade is next to impossible.

The EU has such agreements with virtually all countries around the world, including those that are neither members of the single market nor have an FTA in place.

Getting such agreements should be a simple matter and should not cause our negotiators any problems, not least because such MRAs are already in place.
All the UK has to do is simply to carry them over into the new world. If the EU refused to agree MRAs with us, this would count as discrimination under WTO rules and would lead to huge fines.

If our leaders, senior officials and negotiators, as well as the majority of British businesspeople and the commentariat, can convince themselves that not having an FTA with the EU is a perfectly acceptable outcome, then the Government will be in a strong position to say no to a bad deal. Especially for a country like the UK, the open sea should hold no terrors.

[James Hammerton]

On 08/05/2017 10:24, mro...@btopenworld.com wrote:
> Roger Bootle - chairman of Capital Economics (Telegraph)
>
> " countries all around the world that are not members of the single market have managed to export into it so successfully. “Access to the single market”, so powerful as an image, is in fact a chimera."
>
> [...]
>
> "it is with regard to the subject of the UK’s exit. Some politicians
> and businesspeople talk of the UK “crashing out” of the EU. Another
> metaphor is of British business facing “a cliff-edge”. They say that
> without a deal, the UK would “fall into the clutches of the WTO”.

I've never seen it described as "fall into the clutches of the WTO"
until this article!

>
> It is as if the World Trade Organisation (WTO) were some sort of
> monster that devours its members – especially juicy new ones like us. In
> fact, the UK helped to set up the WTO in the first place and has
> remained a member all along, albeit with our seat vacant because our
> trade policy has been run by the EU. On leaving the EU, we would simply
> take up our seat once again.
>
> Mind you, Remainers often portray trading “under WTO rules” as a
> disaster. At the very least, it supposedly represents a step into the
> unknown. Yet this simply means trading with countries without having an
> FTA and using WTO rules to govern trading practices.

Which would actually put is in a unique position since no one actually
trades with the EU solely on WTO rules.

As part of the EU,
> the UK already trades under WTO rules with over 100 countries around the
> world, including the United States (our largest single export market),
> as well as China, India, Brazil and Singapore.

None of the countries mentioned trade with the EU on the basis of WTO
rules only, and in fact right below we see Bootle concede this.

>
> This arrangement is often described as the “WTO-only option”. But because this sounds so Spartan and threatening I have suggested that we should instead refer to it as “the American option”.
>
> After all, without an FTA between the EU and the US, “WTO-only” is the basis on which trade between them takes place. Suddenly, it does not sound so threatening."
>
> "In saying this, I am not suggesting that there are no sorts of agreement that can and should be signed. In particular, there are various technical arrangements called Mutual Recognition Agreements (MRAs) without which goods trade is next to impossible.
>
> The EU has such agreements with virtually all countries around the world, including those that are neither members of the single market nor have an FTA in place.

This is the first time I've seen Brexiteers in the media, other than
Richard North or Christopher Booker, acknowledge that actually no one
does trade with the EU on WTO rules alone.

>
> Getting such agreements should be a simple matter and should not cause our negotiators any problems, not least because such MRAs are already in place.
> All the UK has to do is simply to carry them over into the new world. If the EU refused to agree MRAs with us, this would count as discrimination under WTO rules and would lead to huge fines.

I would like to see this claim about fines explained in detail - my
understanding is that so long as the rules the EU applies the same rules
to all third countries (in the absence of agreements otherwise) they're
fine.

The trouble is the default rules with the EU would involve a lot more
customs inspections being required for EU/UK than is presently the case
and this could cause serious logistical problems. It's the sudden
overnight transition when Article 50 kicks in if there is literally no
deal that is the problem here.

And as for Bootle's claim about discrimination - WTO only offers limited
protection against discrimination, especially when it comes to Regional
Trade Agreements.

This article from Pete North (Richard's Brother...) is apposite:
http://leavehq.com/blogview.aspx?blogno=128

E.g. he says: "In reality, the WTO rules only afford very limited
protection against discrimination, and then only in respect of tariffs -
which are no longer central to trade matters."

He also says: "As the WTO site itself says, "by their very nature RTAs
(Regional Trade Agreements — as is the EU) are discriminatory", and,
under WTO rules, an amount of discrimination against third countries
(and that would include the UK) is permitted."

>
> If our leaders, senior officials and negotiators, as well as the majority of British businesspeople and the commentariat, can convince themselves that not having an FTA with the EU is a perfectly acceptable outcome,

No - it's not a case of our leaders convincing themselves but rather
establishing that it is in fact the case. If they're convinced and wrong
then they will make a mess of things...

then the Government will be in a strong position to say no to a bad
deal. Especially for a country like the UK, the open sea should hold no
terrors.
>
>

Regards,

James

--
James Hammerton
http://jhammerton.wordpress.com
http://www.magnacartaplus.com/

[mro...@btopenworld.com]

On Monday, May 8, 2017 at 2:13:40 PM UTC-4, James Hammerton wrote:
> On 08/05/2017 10:24, mro...@btopenworld.com wrote:
> > Roger Bootle - chairman of Capital Economics (Telegraph)
> >
> > " countries all around the world that are not members of the single market have managed to export into it so successfully. “Access to the single market”, so powerful as an image, is in fact a chimera."

[rest snipped solely for reasons of brevity]

https://www.wto.org/english/thewto_e/thewto_e.htm

"Membership 

Members and observers  

*The WTO has over 160 members representing 98 per cent of world trade.* Over 20 countries are *seeking* to join the WTO.

Accessions  

To join the WTO, a government has to bring its economic and trade policies in line with WTO rules and negotiate its terms of entry with the WTO membership."

Trade is as old as civilisation itself and predates the EU considerably. It is fundamental to international relationships. Some EU members (e.g. UK. Germany,France) actually pay for access to the Single market. Other EU countries (e.g. Luxembourg (highest per capita GDP within the union) Poland and the former Iron curtain countries do not pay. Just one anomaly.

Non EU countries (known in EU parlance as third countries) enjoy access to the Single market but not tariff free access. They pay what is called an external tariff which is WTO related. All EU countries are members of the WTO whose rules stipulate that there shall be no discrimination between members unless a trade agreement is in operation.

Since EU rules forbid the establishment of trade agreements between members and third countries, this means that all trading after will be under WTO arrangements a constraint that applies to all third countries. Why else would there be any point to the WTO?

There is no reason to believe that these other counties will insist that future trade between them and the UK will be carried out under EU arrangements. Self interest always has and always will out.

Why shouldn't it?


In fact EU trade is not in the ascendancy. In world terms it is in decline.
as a proportion of world trade. The EU is not a super power. In fact it is not a power at all. There is no such thing as a country called Europe and hopefully never will be.

[theother...@gmail.com]

Failing to plan is planing to fail - We failed to plan so it is going to be an uphill effort. Lets just hope the people handling this are up to the job (on both sides). There will be upheaval, that is inevitable, of course we live in a state of constant upheaval but sometimes it gets a little intense.

The world has changed, I gather the international consensus is that we are now in the Anthropocene era and that started about 60 or 70 years ago when all the curves angled sharply upwards. With 10bn mouths to feed, egos to stroke and insecurities to assuage we are going to have to adapt to what we have created and that is going to be quite an adaptation.

For the moment all we have is speculation and with elections looming the propaganda is seeking to paper over cracks and magnify small elements that appear to fit with one or other factions vague promises. It is best to ignore what politicians say and look at what they actually do, the two are often somewhat different.

Nation states really ceased to be viable with the development of nuclear weapons, the situation is akin to using flame throwers to resolve domestic disputes. We will need to work together on this or we will all suffer badly.

You suggest a close political union in Europe would be a 'Bad Thing' but really it is just a question of where the border lies. It is culture that separates us (and possibly the differences in brain structures because of the languages we use, a friend of mine is working on that one at the moment). If Europe were defined as the area as far east as Poland and Czechoslovakia it might work, much beyond that and you are into the slavic cultures to the north and the islamics to the south and beyond that are the asiatics.

The Americans managed to take people from all the European countries and beyond and merge them into something that passes for a 'country', although there are groups who wish they hadn't bothered and had stayed as independent states, pretty much like Europe used to be. The Americans put a lot of effort into developing that common culture that defines America and Europe would have to do the same, so extending the EU across those cultural divides would probably be counter productive.

The British are still having difficulties keeping their separate countries together, would you contend that given their differences of opinion in priorities that means there is no such country as Britain?

Nostalgia is a distorting lens and the world will not be 'as it was' ever again. By the time the human population starts to decline (in about 70 years if we can avoid war and deal with natural catastrophes) we will be sharing the planet with artificial intelligences and that changes everything. Old ideas such as 'earning a living' become largely irrelevant, there just won't be enough for us to do, and much of 'politics' will be redundant as opinion will be largely replaced by established fact. Bilionaires may also die out as automated systems will be better at second guessing than humans and do not require pay rises in recognition of their work (as a stock holder that looks like a good deal to me).

So, in the not too distant future Earth is going to have to adapt to all these changes. As the human population then declines we can look at forming 'clubs' based on culture again, and perhaps even go to war to settle those vital questions like who's god is more peace loving than the other, but it will never be the same. It never has been.

The interplay of human insecurities and social dominance is a very murky area, which is why Great Leaders tend to be so awful. We may be able to resolve that in time, and apply therapies that ameliorate those problems, but by then a lot of what we actually do will be determined by non-human entities, initially using algorithms (ponderous but they do get you there) and later as AI develops using more subtle 'intuition-like' processes (a lot faster but prone to errors).

This is already happening, for example Corporations can pay extra for a super-high speed link to the financial markets, so the machine spots a rise in prices and gets its bit in just that fraction of a second faster than the system can handle, the machine owner makes a killing and the pension fund (possibly your pension fund) gets fleeced. There are no human's in that loop.

That isn't capitalism its banditry but westminster does not regard it as an 'issue'.

It isn't all bad - on the London underground there are cameras watching all the platforms but no humans are watching over them. the cameras feed into a neural network who's one trick is that it can tell when the platforms are filling up. It then signals the signalling system which allows the trains in that section to run closer together to shift people away more quickly.

As someone who uses public transport in cities I consider that a Good Thing and similar systems are already in use handling the supply of good to supermarkets. Humans just couldn't handle it, or rather they could but no where near as efficiently. Expanding that outward into the wider picture and politics will be on an ever shrinking island, increasingly reliant on the advice of machines rather than corporate donors. Whose who resist will not function as efficiently and efficient administration makes a big difference to quality of life (just look at what happened at the end of the last ice age when climate change lead to famine, mass migration (the sea peoples and all that) and the collapse of the various advanced civilisations that had felt themselves so secure. Civilisation is actually rather fragile but on balance I consider it preferable to the alternatives.

However we are left with those human insecurities, cognitive biases and other issues that bedevil human societies. That is the problem, not the machines.

So how would you like to see the world trade system develop? Would you insist on humans running things even though this means you might starve for a bit now and then?

If (as it seems) the climate is changing (whatever the reason) there are going to be issues of water distribution and food production. We will have 10bn mouths to feed and 10bn insecure, flaky and often deranged minds to cater for. That is going to be quite a party and for many it will be within their lifetime.

Cheers

Mike