The share of Britain’s exports going to the EU is declining, while the share going to the rest of the world is rising. If that trend continues, then in ten or twenty years’ time, Brits will be asking themselves with even more urgency: exactly what are we doing in the EU?
But the above chart UNDERESTIMATES the declining importance of the EU for Britain. Reason is that at the moment, British trade is clearly skewed TOWARDS the EU because of the tariff free agreements that Britain has with the EU. I.e. if Britain had the same agreements with the rest of the world, then the share of Britain’s exports going to those non-EU countries would be even higher.
The chart is from here.
Tariffs arehistorically pretty low globally now thanks to the WTO and past talks.The barrier to trade these days is more non tariff barriers(NTF).Typically these include saftey standards and declarations of origin.This is boring technical stuff you need to deal with in trading with many developed nations.Often agreements are set up to recognise one anothers standards to avoid hold ups at borders with paperwork etc.These type of agreements are becoming more and more common.It makes sense to have global standards too so everyone accepts the same standards.Makes global tade much easier if we all make recognised,standardised and homogonised widgets.
ReplyDeleteTopically,this also makes the EU superflous to requirements since we need globally set standards not just European ones.
We could have one with the EU eventually should we wish to leave,but they take years to negotiate properly.But done on a sector by sector basis they are more effective than TTIP style negotiations which are very complex and unwieldy to negotiate.
Where that leaves your chart is moot.But with the EU economy struggling,trade to the rest of the globe can only continue to grow.