Frank Parker's author site

Home » Posts tagged 'Trade'

Tag Archives: Trade

Advertisements

No Deal? No Way!

It was the early 1960s. The company I worked for designed and manufactured specialist components for aircraft. We were asked for initial designs for such components to meet the stringent requirements of a supersonic airliner – Concord – proposed as a joint project between British and French aircraft manufacturers.

800px-concorde_1_94-9-5_kix

An Air France Concorde (the UK version of the plane’s name omitted the final ‘e’). Image from wiki media commons.

We were in competition with a French manufacturer of similar components. Whoever won the design competition, both companies would manufacture the components. Winning the design competition offered prestige, but it was manufacturing that held the promise of long term profits. So neither company tried too hard to win the design competition.

In the event, our designs were the closest to the specification so it was we who were asked to work up the designs into plans for manufacture. And, decades later, we all know that no-one made any money from Concord.

I tell this story because it is an early example of international co-operation in manufacturing. Britain was not even a member of the EU back then, although much effort was being put into applying, only to be vetoed by the then French president, Charles DeGaule.

These days most complex machines – not just aircraft, but motor vehicles and domestic appliances – are manufactured by international consortia using components sourced from around the world. Within the EU, these consortia take full advantage of the Single Market and Customs Union to import components tariff free from one part of the Union to another and sell the resulting machine in most member states.

In the automotive industry, for example, final assembly of one model might take place in the UK, and of another in France or Belgium, with components for both sourced from several countries. No wonder these companies are worried about the possibility of a ‘no deal’ Brexit. Their supply chains will be disrupted, their UK businesses rendered unviable. This applies to UK based component manufacturers supplying end users elsewhere in the EU just as much as to UK based manufacturers sourcing components from other parts of the EU.

It also applies to UK based food processors importing ingredients from within the EU, and UK farmers and horticulturalists supplying ingredients to EU processors. Such contracts generally take years to negotiate. This explains why the UK can’t “just walk away” as some of those who voted “leave” two years ago would wish. The reality is that, unless David Davis and his team can come up with something as close as possible to the existing Single Market and Customs Union, the future looks very bleak indeed for British businesses of all sizes.

Patrick Minford, one of the few economists who favour Brexit, admits this but is unconcerned, stating that the UK can do without manufacturing. The leadership of the Labour Party should be very worried about the livelihoods of their members and supporters. It is beyond belief that they are not fulfilling the proper role of an opposition and fighting tooth and nail to prevent #Brexit.

Advertisements

#Brexit: What’s the Plan?

I have heard plenty of talk about what Britain could do if she left the EU:

  • Control our borders
  • increase the volume of trade with the rest of the world
  • get rid of regulations that make it hard for small businesses.

And I’ve heard plenty of denials of the things the ‘remain’ campaign say might happen. I want to know what will happen. And I think it’s important that the voters understand that some of the things they think will change for, as they see it, the better, probably won’t.

I heard a man interviewed on TV the other evening saying “Tesco has a whole aisle full of Polish food.” As though that was a bad thing that he wanted to see changed.

Polish food on a supermarket shelf (from http://www.tcdailyplanet.net)

Aside from the fact that Polish and many other ethnic foods have been on sale for decades in the more cosmopolitan parts of Britain, and that their appearance in our smaller cities and market towns is to be welcomed, I have not heard anyone suggest that, if Britain leaves the EU, the Eastern Europeans already here will voluntarily go home. Nor has anyone, to my knowledge, suggested they will be deported. So there will still be the same market for Polish food as now.

The same goes for jobs and public services. Poles, Latvians, Lithuanians and Hungarians will still be doing the same jobs, still having children who will need school places and health care.

Some of the advocates of leaving have suggested that, if, in future, we reduce the numbers of immigrants arriving from Europe, we can increase the number coming from the rest of the world, especially the Commonwealth. That seems oddly at variance with the complaints, often heard in the past, about ‘alien cultures’ and the alleged unwillingness of people, for example, from the Indian sub-continent, to integrate with the rest of the population.

Key points

Let’s examine the three key points listed above and ask some pertinent questions which surely need satisfactory answers in order to gain an understanding of what this new independent Britain will look like.

Control of Borders: What practical measures will be required to do this effectively? If not a considerable increase in security at ports of entry, with thorough checks of passports and visas, then how will this ‘control’ be enforced? What will be the effect of that on tourism? What of people arriving in the many small ports and marinas around our coasts? And what about our land border between the Irish Republic and Northern Ireland? If people arrive as tourists, what is to stop them staying on? Another increase in the internal forces required to seek out illegal migrants seems inevitable. All these extra forces either mean an increase in public spending, or the diversion of budgets from other services, most of which are already underfunded.

Increase trade with the rest of the world: There is, currently in the final stages of negotiation, a treaty, known as TTIP, which is intended to set the terms of trade between the EU and the USA. You may have heard of it. A lot of people don’t like it. They especially don’t like proposed measures under which large corporations would be able to sue national governments for imposing restrictions, such as health warnings on tobacco packaging.

So, maybe, leaving the EU and, thereby, excluding herself from TTIP, will offer Britain a chance to negotiate something better. I suspect that most of the people who oppose TTIP are unlikely to trust a British government not to agree to similar, or even worse, terms. Especially if there is seen to be a need to conclude negotiations quickly. Better, surely, to continue with the existing negotiations as part of the EU, pressing the case for national sovereignty to take precedence over corporate profits.

Get rid of regulations: Setting aside the ‘regulations’ that never really existed, like straight cucumbers and the number of bananas in a bunch,

Bananas in bunches, wikimedia.org

what regulations will a future British government repeal? A minister from the ‘leave’ campaign insisted on TV on 23rd May that none of the protections of worker rights are threatened by our leaving.

What about consumer protection? Which, if any, such regulation is certain to be revoked? We need to know before we decide.

What about gender equality, including LBGT people? Many of the ‘leave’ camp espouse socially right-wing views. If you are someone who believes such ‘rights’ are a step too far, you no doubt hope that leaving will provide an opportunity to have them reversed. I, on the other hand, hope the majority of the British electorate are sufficiently liberal in their views to oppose any such move. Which is one of the reasons I am saying ‘don’t be so sure that everything you expect to gain from leaving will actually come to pass.’

Dire predictions

I hope that supporters of the ‘leave’ campaign will chip in with some serious answers to these questions. It is not enough to refute the dire predictions of the ‘remain’ camp. Nor to make loud claims of what a future Britain would be enabled to do if not restrained by her EU membership. If significant change is to follow from a decision to leave, what is the nature of such change? What are the practical implications?

And, if there is not a clear intention to back-track on what many see as the benefits of our membership, why bother?