![\"\"](\"http:\/\/euatou.ideasoneurope.eu\/files\/2022\/12\/20221214_072749b.jpg\")
It\u2019s often helpful to try and tackle familiar problems from unfamiliar angles: it makes you think again about what\u2019s what and maybe it opens up some new ideas.<\/p>\nIt\u2019s often helpful to try and tackle familiar problems from unfamiliar angles: it makes you think again about what\u2019s what and maybe it opens up some new ideas.<\/p>\n
And so I present my t-shirt.<\/p>\n
[yes, that is a finely-tuned physique it contains, but let\u2019s leave that for another time]<\/p>\n
A night\u2019s sleep disturbed by the seeming lack of understanding about the basic choices the UK faces when it comes to economic relations with the EU had got me to some wild thoughts about another graphic. Possibly involving graceful curves. Which isn\u2019t me.<\/p>\n
Then I pulled out this top and a much simpler way of trying to work through the issue presented itself.<\/p>\n
The t-shirt is \u2013 of course \u2013 not just a t-shirt. It\u2019s an example of how modern economies work.<\/p>\n
Beyond its material existence as a piece of clothing, it also comes out of a system of production that has to comply with numerous bits of regulation: standards on health and safety; approvals for the chemicals used in dyes; intellectual property rights for designers; obligations on truthful marketing; rules-of-origin for raw materials; and much more.<\/p>\n
It\u2019s also (and this was the clincher) a fine piece of British manufacturing. Lovely people, Restrap<\/a>: totally recommend all their kit.<\/p>\n Using the t-shirt we can start to make perhaps more sense of options than would be the case with dry economic theory.<\/p>\n Let\u2019s start with a baseline case: someone in another country that the UK doesn\u2019t have any trade deals with hears about this t-shirt and wants to buy one.<\/p>\n Apart from having to sort out payment and shipping, the customer in our imagined country might encounter a number of additional barriers before they can pull it on.<\/p>\n The most basic of these would be either a limit on the number of t-shirts that can be imported each year from the UK (a quota) or a charge applied to each t-shirt being imported from the UK (a tariff). These are both classic ways of protecting domestic producers.<\/p>\n You can deal with these kinds of barriers with a free-trade agreement (FTA)<\/strong>. Usually these involve reducing quotas and\/or tariffs, but in the case of the FTA that the UK signed with the EU \u2013 the Trade & Cooperation Agreement \u2013 they went for zero quotas and zero tariffs, largely because these didn\u2019t exist beforehand to be removed.<\/p>\n Great stuff, but not actually \u2018free trade\u2019.<\/p>\n Remember all those rules I mentioned beforehand? Well those are still in place, so our customer in country X might find the importer who\u2019s bringing in the t-shirt has to satisfy national authorities of compliance with those various regulations and standards.<\/p>\n One big thing you can address is the question of where something comes from.<\/p>\n In our case, country X authorities might be concerned that even if the UK rules on producing t-shirts mean they\u2019re not a competitive threat to domestic producers, maybe a UK firm is just acting as a conduit for much cheaper producers elsewhere, taking advantage of the UK\u2019s low tariffs with them.<\/p>\n Similar, the t-shirt might be made in Yorkshire, but the raw materials will come from elsewhere, cotton not being a big crop in God\u2019s Own Country. But because enough work has been done on those materials inside the UK, per UK rules (which reflect international norms), it\u2019s now a UK-made product. More complicated items, like bicycles, are more complicated, but the same idea applies.<\/p>\n You can start to solve both these kinds of problems with a customs union<\/strong>.<\/p>\n All parties in such a union agree to have the same tariffs in place with third countries, so that you don\u2019t get the direct problem of diverting trade through the low-tariff state or the indirect one of bypassing tariffs by doing work on things to make them \u2018locally made\u2019. Now, wherever goods enter the customs union, they get the same treatment, which means it\u2019s no longer something that needs to be checked at internal borders. Indeed, you don\u2019t need internal tariffs at all.<\/p>\n All good stuff, but there\u2019s still a lot left on that original list. What if country X requires all text on items to be provided in the local language? Then the producer now has to either make a new version or supply some translation: neither\u2019s a big deal in this case, but it\u2019s still extra cost to do and if it needs to be signed off, that\u2019s still paperwork.<\/p>\n So the big step to address these barriers is to have a common or single market<\/strong>.<\/p>\n As the name suggests, you\u2019re trying to make something that\u2019s more like the conditions you\u2019d expect to find within <\/em>a country. I hadn\u2019t have any additional checks or controls when I bought this Yorkshire item from Surrey, so why do the same with country X?<\/p>\n In principle, you can do this \u2013 it\u2019s more or less what you have in the EU, for example. But it\u2019s very much bigger thing than an FTA or a customs union.<\/p>\n That\u2019s because it can involve an awfully large number of things.<\/p>\n Importantly, it\u2019s not simply about removing differences in rules on producing and moving goods (which itself includes manufacturing, transportation protocols, workers\u2019 rights, environmental protection and more).<\/p>\n It\u2019s also about removing differences on offering services (e.g. accessing the help service should I need guidance on, um, making my t-shirt work), moving capital (e.g. being able to have transaction-cost free purchase options in other countries) and allowing workers to move too (e.g. to make it possible to hire the finest t-shirt makers from across the area without restrictions).<\/p>\n Suddenly, the simple idea turns out to be really quite involved, especially because you can\u2019t just do these things for t-shirts: you do them for the entire economy.<\/p>\n This last point is the key one.<\/p>\n A lot of what we talk about when we look at UK-EU relations is specific cases: visas for musicians, rules on fish, proper cheese from France.<\/p>\n But in many \u2013 maybe most \u2013 cases, the principles involved are ones that tend to imply much bigger and more generalised processes.<\/p>\n Certainly, in each of these situations \u2013 no specific deal, an FTA, customs union, a single market \u2013 there is a degree of wiggle room. The EU\u2019s single market has various gaps in it, for example, just as the UK has mixed in a very high level of integration with the EU for Northern Ireland alongside its otherwise very minimal FTA.<\/p>\n However, wiggle room is not the same as the fundamental differences that come with each basic option.<\/p>\n The more you work together to remove barriers to trade, the more you limit yourself in what you can do with third countries and what you can do domestically.<\/p>\n A customs union is not just an agreement on common external tariffs; it\u2019s also an obligation to negotiate as part of that union in tariff discussions with other states.<\/p>\n A single market is not just a means to get full and free access to your partners\u2019 markets; it\u2019s also a permanent negotiation about addressing emerging barriers and a significant intrusion of your partners into making decisions about what happens in your country.<\/p>\n Which brings us back to the t-shirt.<\/p>\n Economic integration is also political integration. None of the steps to \u2018improve trade\u2019 outlined above comes without some political implication domestically.<\/p>\n That\u2019s always been the case, both in the abstract and in the particular case of the UK and the EU. And it would be foolish to pretend otherwise.<\/p>\n Too often, we have seen either a framing that is solely economic or solely political, without really trying to put them together. It\u2019s not that \u2018X% hit to GDP\u2019 or \u2018taking back control\u2019 is wrong, just that neither is the full picture.<\/p>\n And so it is with our t-shirt, which by this point is starting to wonder if some other piece of clothing might not have been pulled out of the chest of drawers.<\/p>\n The t-shirt is both an item of clothing, to be traded as a product, and a representation of UK domestic producers, generating local value and competing in a globalised market.<\/p>\n The more we can recognise those different aspects and the need to take a considered view of how they might best be balanced, the better we will be able to make the big choices about what basic model of economic relations with the EU best serves our collective needs.<\/p>\n","protected":false},"excerpt":{"rendered":" It\u2019s often helpful to try and tackle familiar problems from unfamiliar angles: it makes you think again about what\u2019s what and maybe it opens up some new ideas. And so I present my t-shirt. [yes, that is a finely-tuned physique … Continue reading Like UK-EU relations how?<\/strong><\/h3>\n
And there we go<\/strong><\/h3>\n
The t-shirt dilemma<\/strong><\/h3>\n