Apparently when George heard that it was an ambitious trade deal, he actually thought the word ambitious was relevant.
So to mark this Australia announcements, let's ignore the flannel and introduce some hard facts.
So to mark this Australia announcements, let's ignore the flannel and introduce some hard facts.
Our main international airport has limited freight capacity.
Consequentially, many companies rely on the Single Market to access European airports that have much greater dedicated freight.
Outside the Single Market, trading with air freight is going to be more expensive for whoever is picking up the bill.
What about sea freight, you ask? Well if what is happening is as I understand it, Covid has come at the worst time.
When I looked to see if sea capacity would also be an issue, I saw that the industry has the opposite problem. We are not limited by capacity because there is over capacity in sea freight.
Costs are going up due to environmental commitments, and people are looking at getting out of the industry.
If Covid results in countries inshoring then that will put even more pressure on sea freight.
Based only on what I've read, the sea freight industry could contract and this will lead to higher prices in world trade.
Now, I hope I'm wrong about over capacity in the sea freight industry. There is a lot of things going on, and I haven't had the time to look and understand the whole domain.
If I'm right then we're in a situation that would be very bad for the world economy.
In any case I am certain that the freight industry is facing challenges with increasing costs, and it is very likely to be impacted by Covid.
Based on how long it took air freight to recover from the impact of the Iceland volcano, it could be years before sea freight recovers.
Politicians getting excited about a trade deal made by countries with over 9,000 miles between them is perverse.
Politicians getting excited about a trade deal made by countries with over 9,000 miles between them, a limited transport infrastructure in a world where a main freight industry is under pressure, is perverse.
Yes, there are advantages on things like lead export.
But there are things which tariffs were never actually that high in the first place.
But there are things which tariffs were never actually that high in the first place.
Trade deals don't give significant gains in the first place, and trade deals between two liberalised economies like the UK and Australia are going to be at the lower end of what trade deals provide.
I can think of nothing about the trade realities or in trade theory that say this is going to be a significant deal.
Yet we are still given the political line that this deal will provide "profoundly significant" returns.
If they want to stick to that story the I think it's fair that they prove it.
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