The customs union debate is just getting at me, I mean, the sort of things which are aired are staggering, so here’s a thread. 1/
First that the EU customs union is protectionist. Really, with average tariffs around 4% (bit more for agriculture)? Exchange rate fluctuations often have much greater effect. 2/
BTW, if the EU were the US they’d accuse the UK of having had the EU Ref to achieve a competitive devaluation. 😉 2/
In a customs union the UK loses its ability to strike trade deals. So what? The EU has many free trade agreements, and it gets very good terms because it offers free access to 500 million consumers market. 4/
In international trade, size does matter. And you need some protection (higher) tariffs to be able to offer something to the other side. 5/
But tariffs are a side show. It is on regulatory issues that trade agreements matter. This is where both size and voice really count. Look at GDPR, which everyone knows by now. The whole world needs to comply: EU market size. 6/
I thought that Brexit would lead the UK to try to acquire some global regulatory leadership. Difficult but not impossible. But no, the Govt just wants to sign up to EU regulations, agencies and all. 7/
This could still be done, particularly in services, where the WTO concept of trade in services liberalization has clearly failed. But no indications that this is being pursued. 8/
No need to believe me on regulatory issues. What has the US already indicated it wants from the UK? To abandon EU regulatory alignment and adopt US-style regulation. 9/
And the Indians? Do they talk about tariffs? No, they want more immigration. 10/
Nor does remaining in a customs union preclude a border in Ireland. All kinds of checks need to be eliminated. This took the EU 10 years in the 80s/90s. Not replicated anywhere else. 10/
But I understand the fierce debate. If the UK cannot conclude its own trade agreements, how on earth could Brexiteers continue to argue that there are some tangible economic benefits to leaving? /end
PS Apols for getting the numbering wrong ... Doesn’t affect the substance though.
