Thread by @hhesterm

A short thread on "crummy market access" and evaluating an FTA. (Thread)

https://twitter.com/pmdfoster/status/1327317345275179009

It is no secret that I think the Brexit negotiations suffer from a fundamental problem: an FTA between the EU and the UK will likely be the most economically valuable for each of the partners. It will also make the conditions of trade considerably worse than they are now /2

I've written about this already (attached). But now I'm interested in one question: what makes a valuable FTA? /3

https://twitter.com/hhesterm/status/1261213664213905408?s=20

There are two ways to measure this: the content of the rules and the economic value. /4

Both measurements tent to create problems in extreme cases. Take the "content of rules" one. An FTA can have incredibly innovative rules giving unprecedented access to the widget industry of state B. Which really, is a bit of a joke if state B does not have a widget industry /5

In the other extreme if the UK and the EU were to agree on trade conditions amongst themselves that are considerably worse than WTO conditions (let's assume that were legally possible), it would still be the economically most valuable FTA for both. And yet, silly. /6

So where's the truth? You have to take both into account. Though I would still argue that the economic calculus plays a larger role.
But the different ideas show that maybe we should not spend too much time on this argument.