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David Henig Profile picture
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20 May, 4 tweets, 2 min read
In this week's @BorderlexEditor Perspectives column I set out to make sense of a torrent of trade policy initiatives at the WTO, OECD, US and EU, and see a clash between international measures to liberalise trade and national ones to control it. borderlex.net/2021/05/19/per…
What seems most significant is that the EU and US no longer appear to believe in expanding global trade. That might be the first time since the founding of the GATT in 1947. It puts a big question mark over the future of the system of rules.
Next year will be the 75th anniversary of the modern global trade system, with the principles of facilitating trade and non-discrimination at its heart. Perhaps that would be a good time to discuss the principles suitable for a 21st century system. borderlex.net/2021/05/19/per…
US and EU resentment of the centre of global trade power moving to Asia? Certainly the rise of China. But arguably at least as much a story of success in goods trade to the extent of future gains being unclear. Plus domestic distribution.

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More from @DavidHenigUK

David Henig Profile picture
20 May
This is the heart of the matter of UK trade deals (and modern trade) and agriculture, and the reason we're having such a fevered but abstract deal is that Ministers have never said what the said measures will be - and it really matters. theguardian.com/environment/20…
This might have been the heart of the matter 50 years ago, but tariffs actually paid are now low (and we also have to think of developing country preferences) that much lower prices are unlikely, and at what cost?
Another way to look at UK-Australia - they want greater agricultural access to our market. That has a value and therefore they will 'pay' in some way (but not if they don't need). So what do we want? What is the 'price' for access to the UK market? Others will take note...
Read 4 tweets
David Henig Profile picture
19 May
We trade. That is not at issue. The 19th century trade v not argument can safely be left in the 19th century.

The issue is the conditions for that trade, and the impacts these might have.

(to retweet endlessly into the void)
Hadn't picked up Scottish tory unhappiness about the UK-Australia trade deal but as repeatedly said, choices over trade policy. And as with EU agreements, denying the choices doesn't make them go away.
Right, so if we don't get a UK-Australia trade agreement we are pro-China, but if we do get an agreement we are anti the union?

This debate is moving into the realms of total absurdity. Its a trade deal. Others do them. It doesn't mean that much.
Read 6 tweets
David Henig Profile picture
19 May
Well this seems like good timing for my (with @AnnaGuildea) new @ECIPE publication. On why Free Trade Agreements only have limited value because in many countries we are as close to a perfect market as we're going to get. ecipe.org/publications/f…
Basic argument - the main economic gains from Free Trade Agreements come from encouraging more efficient production, and that has largely happened. Tariff reduction now leads to negligible growth. Where customs or other barriers are significant, reducing them can be significant.
Not that world trade is flawless. Regulatory barriers in goods and services trade are still high and this provides a huge bias towards large companies better able to overcome them. Domestic distribution is an issue, though manufacturing output and tariffs don't seem correlated.
Read 5 tweets
David Henig Profile picture
19 May
Ok #tradetwitter can we all agree that we're not all going to roll out our pieces from 3 or 5 years ago suggesting that agriculture in trade deals might be a problem, as obviously that was just silly project fear and not at all completely inevitable if government didn't listen
Anyway, with respect to a UK-Australia deal it is not whether their agricultural produce will be allowed into the country tariff free (yes), but:

- unlimited or with quotas
- whether some sensitive products are excluded
- under what conditions e.g. animal welfare
- what we get
Contrary to what the 19th century wing of #tradetwitter believes, the debate on agriculture in an Australia trade deal is what every country should go through in advance of a deal. Indeed, if there is no similar argument in Australia why not? Are we not asking enough?
Read 8 tweets
David Henig Profile picture
18 May
The sharp-eyed will notice that this falls some way short of removing checks of produce going from Britain to Northern Ireland as demanded by unionists. As such, the EU may ask whether with this arrangement the UK government would take responsibility?
Reduced paperwork under the EU-New Zealand veterinary agreement? There are also pages of equivalent regulations, so we are talking a form of regulatory alignment.
This all seems plausible
Read 5 tweets
David Henig Profile picture
18 May
One day into discussing UK free trade deals and the simplism on display is already showing why it is so difficult to have a sensible policy debate in this country. You'd never believe that trade agreements are controversial and complex policy choices everywhere. Let's unpack.
First of all terminology. Free trade agreements do not deliver free trade. Rather at minimum they reduce tariffs and increase services access compared to those under WTO rules, typically accompanied by more detailed rules for trade in a whole range of areas.
Given that tariffs paid by developed countries are on average very low, reducing them further has limited if positive economic impact. Improving services access or reducing non-tariff barriers may have a greater impact, but are pretty difficult to achieve.
Read 8 tweets

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