Wednesday, 12 October 2016

I don't do dirty work, sucka!

Have you ever applied for a job only to learn later that an internal candidate was already lined up for the role? I witnessed it many times in my previous career as a wannabe academic.  How does it work?  Maybe a university wants to promote a promising researcher so that they too can enjoy the endless glory and wild financial excess of lecturer status.   Perhaps they even threw hints at the eager researcher that if they took on a punishing teaching load and helped improve the departmental research rating they would "do well" in the future.  There's a catch, though, because they need to adhere to equal opportunities legislation:  they can't just make an offer without throwing the process open to any potential candidate.  All the department needs to do is create a role with a very specific wishlist tailored exactly to their researcher.  Sure, half a dozen applicants will tick 5 or 6 of the boxes but only one will tick them all.  You might say that the open market was rigged to favour a specific outcome.  Welcome to the world of non-tariff barriers.

Don't bother applying, this one's reserved for a time-traveller.
In previous posts I argued that Liam Fox's assertions about post-EU free trade opportunities are no more than bluster - the UK will not magically gain access to any financial lever that could significantly alter its current trading position. The loss of influence on  EU non-tariff barriers, on the other hand, will likely be a blow to the UK.

Non-tariff barriers come in various forms but they are typically a set of product standards designed to favour a local manufacturer.  Advantage might come from advance warning on a change to the standards.  It is rumoured that Dyson missed out on advance warning of a change to EU standards on vaccum cleaner power measurements.  He's been campaigning against the EU ever since, claiming that it is all rigged towards German manufacturers. Alternatively, it might be a labelling standard that specifies a geographic location.  Scotch Whisky springs to mind here.  Anyone can distill whisky and sell it in the EU but it can only be labelled Scotch Whisky if it is made in Scotland.   If you've ever tasted Swiss Whisky (Swissky?) you'll be glad that the good name of Scotland's greatest product isn't sullied by inferior rock juice.  How else might favour be bestowed?  Do you remember the hullabaloo about incandescent light bulbs?  That was a clumsy attempt to favour manufacturers of CFL (Compact Fluorescence) bulbs.  If you have a devious and villainous mind I bet you could come up with at least a dozen nefarious schemes before you reach the end of this post.

[Note: Dyson should spare his anger for the UK government, which actively supported the new rules on vaccum cleaner testing.]



A bottle of the finest Swissky.  Ein kleines Dram, bitte.
The well-worn metaphor of tents and directional toiletting seems to fit here.   Dyson's anger at the EU and his claims that German manufacturers were foremost in the minds of EU legislators won't be changed by Brexit.  Let's imagine for a second that Dyson's claims are correct and that EU legislators deliberately protected German vacuum cleaner producers. What will change after the UK leaves the EU?  That's right, they will still favour German manufacturers.  If his claim is a paranoid fiction then leaving the EU will have the same outcome:  EU legislators will definitely favour non-UK manufacturers after Brexit is complete.  In fact, they have probably already removed Dyson from their spreadsheets.  Dyson, of course, will still be required to abide by EU legislation on vacuum cleaner efficiency if he wants to continue selling his product in the EU27.  His business is not enriched by Brexit in any way at all.  UK consumers will still be faced with a range of vacuum cleaners that conform to EU standards because nobody is going to manufacture product solely for the UK market.  If you think you are going to be spending happy evenings reading samizdat vacuum cleaner user guides you are going to be solely disappointed.  Staying in the EU really is a "win some, lose some" deal.  After all, the EU has 28 nations so sometimes the interests of one will trump the other.  Leaving the EU is more like "lose some, lose some more, lose them all".

Liam Fox probably thinks these non-tariff barriers are, erm, barriers to free and open trade.  He seems like a high-minded chap taking a principled and brave stance, Britain leading the way and all that.  The question is whether leaving the EU will change anything anywhere in any way at all. I don't think it will because everyone is at it, even the exalted (by Liam Fox) US.  A recent case at the WTO concerned country-of-origin food labelling standards that were seemingly designed to favour the US over its NAFTA partners, Canada and Mexico.  The WTO helpfully maintains a handy list of all ongoing trade disputes.   It is a stupendously huge list and they are pretty much all involve non-tariff barriers.  Everyone is up to their neck in this - the US, Canada, India, China, Chile, the EU. Everyone.

There is no reason to think that the UK won't impose its own non-tariff barriers when it goes it alone. Imagine that a major donor to the Tory Party decides that their business is being undermined by cheap imports.  Import tariffs are not an appropriate lever because free and open economies maintain low tariffs.   Liam Fox has banged on about this so much that it is stuck in my brain like a shit song off the radio.  What else can be done?  Hmm, labelling, country-of-origin, technical standards, inspection, testing, quarantine.  Do us a favour, old boy, eh? 

If you start reading a lot about trade you soon come across terms like "managed trade".  They crop up again and again and again.  Even if you're an avid supporter of free trade, it is a fact of life that vested interests undermine it at every turn.  Free and open trade will remain a chimera as long as there are borders and lobbying groups and a hungry press demanding a rapid response to economic crises.  As members of the EU we had preferential access to the biggest trading block in the world.  It might have been "managed trade" rather than Liam Fox's ideal of  free trade but we did have preferential access there.  We will never have a deal like that again and when we leave it we will have nothing.  There is no upside. We will just be left defending legal cases from the US because we want to eat meat washed with water instead of pesticide.

Over and out,

Terry

PS That is really enough about trade.

PPS I don't really think Liam Fox is high-minded and principled.

PPPS No pop video today.  I could only come up with "Through the barricades" by Spandau Ballet. Nobody wants that. Ok, you're twisting my arm.  This time a weak word-play on the effect of vacuum cleaners. What a racket!

3 comments:

  1. I really don't think that Fox and his ilk can be as stupid as they seem to be.

    What, I wonder, is at the bottom of all this EU hatred?

    Is it xenophobia? Is it some sort of harking back to the days when their beloved Britain ruled the waves and waived the rules, just becasue it could?

    Is there some sort of hope that the USA will sign up top something akin to protected territory status and the UK will become all but the 51st state?

    The freedom to have very expensive light bulbs or less efficient vacuum cleaners seems a high cost to pay for any of these things, even if they were attainable (which they aren't).

    And as you say, if the UK wishes to continue selling any of these things to the EU, they'll have to manufacture them to the standards required by the EU. You wonder if it would be worth having a separate production line making inferior products for UK only sales.

    Still, there's always the royal yacht to look forward to, with Liam and Kate on the bridge, waving and smiling to the native peoples as they bring them enlightenment and nasty expensive old light bulbs!

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    1. I'm not even sure becoming the 51st state is the plan. Anyway, that was more likely to happen under TTIP, now closed to the UK. TTIP does seem to have stalled anyway. It is rumoured that the EU was wary of investor-state disputes. There's that "control" again. I do worry that eagerness to sign trade deals will result in a weak negotiating position, resulting in terrible deals.

      I don't understand all this hatred of the EU. It certainly has plenty of problems but the response is completely out of proportion. It's been compared to tyranny and called Fascist. Bureaucrats have been labelled Nazis. Falsehoods circle round the press without correction. I can only explain this with English nationalism and its peculiar sense of imperial power.

      I, for one, look forward to the Royal Yacht. This time, I won't have to pay for it! That's not a serious proposal, is it? What a mess.

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