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Tuesday, 11 July 2017

'Free Trade' Deals and Point Protection

Mrs May was apparently very pleased with the offer that President Trump made to her on the side of the recent G20 Meeting, that Britain would have a 'great' free trade agreement with the USA after Brexit. He probably didn't remember that the next day; and even if he did, it does not add up to a string of words. The US Congress, specifically the Senate, has the power to make or to decline to ratify Treaties of all kinds; and Mr Trump has enough hassle with the Congress [even though both houses are controlled by his recently-adopted party] for him to be willing to make a big deal of a mere trade agreement with the UK.

Much more important is the fact that the USA is an instinctively protectionist state. It is the natural reaction of American politicians to set up temporary tariffs or other means of restricting imports, wherever a significant sector of the US economy activates its lobbyists to make Washington aware of any potential existential threat. For post-Brexit Britain - if we ever reach that state - to depend at all on the US as a crucial export market would be even more foolish than it would be to leave the European Economic Area.

British manufacturers' organisations have already issued warnings about the tendency of India, China and other advancing economies to follow the US example. As industries in those countries are developed to be able to offer sophisticated consumer goods, pharmaceuticals, advanced software and the rest of the range of sophisticated products and services, so the tender 'infant industries' can run to their governments for protection against the inroads of alien producers into their markets.

Although the UK has been laggardly in developing the market for inventions that continue to pour from British residents [including immigrants], the potential for the expansion of Britain's global markets continues to be among the best in the world. Shamefully, many innovative British businesses are sold to aliens [and then misrepresented as 'inward investments] simply because their developers have not been able to get development funding. Other brilliant British inventions, that do get adequate investment and build up their markets, are picked off by alien predators before they make anything like the contribution to the balance of payments that they should: and once the ik [the intellectual property] that the companies own has been alienated, the benefit of that ownership goes wherever the alien owners of the business direct it. This depressing pattern has been developed even while the United Kingdom has been within the cocoon of the European Union, and will not be broken by a 'hard Bexit': rather, it will ensure that the economy shrinks drastically.

While the UK is fully within the European Economic Area it will not be subject to point protectionism by Europe. If our government is crazy enough to try to take us out of the EEA, they would expose the country to European point protectionism, whenever a British concept or project caused a scream from EEA firms and interests. That is the way of the world. Lobbies transcend Trade Agreements and set aside solemn international agreements. Ministers seem to be oblivious to this, as to so many other obvious facts. They have no right to cross-party support in the Commons.

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