Globalisation is an easy punchbag for populist politicians who distort the basic facts of modern day trade. The BNP are well ensconced on the bandwagon of protectionism and their policy suggestions exemplify the dangers of selfish economics.
The BNP’s policy on EU relations calls for a “cordial relationship” with “our European neighbours” but a complete withdrawal from the Union. What exactly does a cordial relationship mean? Something akin to Iceland’s association with the EU? The fallacy that Britain would be better off in the European Free Trade Area like Iceland has, following the collapse of its economy (the koruna has been trading only intermittently), been comprehensively rubbished. The Prime Minister has called for Union membership as soon as possible. The Icelandic finance minister has also stated that “the euro is the only serious option” in seeking a new, stable currency.
Or perhaps the BNP envisages a more distant relationship. It is hard, however, to see the logic behind withdrawing Britain from the largest market economy in the world, especially during the current recession. The the four principle freedoms upon which the European single market is founded, guarantee that we can continue to trade with France, Germany, Poland and Romania without encountering protective tarriffs or barriers to entry designed to reduce competition.
To some, defending domestic companies from foreign competitors may seem like an ideal solution to the current recession. Reducing market competition so British industry can get more of the action. They would be wrong. A lack of competition simply props up inefficient business models, which would otherwise not survive due to wasteful allocation of resources.
Successful businesses such as Tescos (which today anounced record pre-tax profits of $3 billion for the first quarter), need to operate gloablly, as they have already saturated the UK market and would struggle to grow any further. But protectionism can quickly lead to “beggar thy neighbour” retaliation from other countries. We would be damaging our own interests by limitng access to foreign markets.
Furthermore, it would limit consumer choice, one of the best ensurers of a healthy economy. Britain would be isolated from Europe and the world and our economy would suffer, because as a nation, we cannot and never will be self-sufficient, both on a basic, agrarian level, and on a business level.
Regardless of whether one considers the argument from a European or international level, protectionism just doesn’t work. And the BNP have made it their leading policy on trade.
April 22, 2009 at 6:05 am
selfish economics !!!!! is it selfish to want to protect and preserve our economy ? the cordial relationship is the way to go if we are to survive as a nation, the general opinion in Spain at the moment is withdraw from the euro as most Spaniards feel they are a lot worse off under it. i see you have a link to mandelson above ! this creature has no rite whatsoever to be a part of any government having been twice caught out and proved to be a very dishonest individual so any quotes from the good “lord” should be treated with the contempt they deserve !
April 22, 2009 at 11:14 am
As you will note, the link you referred to is “automatically generated.” I cannot take responsibility for those posts.
The most effective way we can “protect and preserve” our economy is through international trade. Globalisation is here to stay and we can’t make it go away by trying to ignore it through protectionism. As Ricardo demonstrated through his comparative advantage model, trade is the most effective way to grow an efficient economy.
The European single market is the biggest free market in the world. It has allowed British companies to find new markets to grow in. The rules governing the market, the “four freedoms” also create a stable business environment, making businesses feel safer and reducing uncertainty in times of recession.
Spain is feeling the pain at the moment, in part because of its unchecked housing boom and unsafe credit flow, but also because it did not carry out the structural reforms its pledged to, and knew that it needed, on entering the Eurozone. However, the strength of the Euro has shown that it is a haven of stability in these uncertain times. Surely the fact that it has become the world’s second reserve currency speaks volumes about its viability.
The fact that the BNP wants to cut us of from the “free” single market and further more, wishes to enact protectionist measures to prevent outside trade (and inevitably contribute to an unhealthy, inefficient economy, ill-equipped to compete internationally) shows the party’s tenuous grasp of basic economics.
April 30, 2009 at 8:23 am
I think you conflate leaving the EU with protectionism.
The EU is not a free trade entity AT ALL, but a tariff club. It is “ok” to trade within, but tariffs exist for those importing into the EU. Heck, there is a 6.5% duty on plastic goods, for heavens sake. Have you seen the tariffs? Reams and reams of them covering products down to the absurd detail.
If Britain left the EU, it would be tariffs entering the EU that would be the certainty here unless the UK remained within the EFTA, that would be resolved. Not being in the EFTA would make you realise what a monster the EU is in terms of “free trade”. Being in the EU is an act of “ladder kicking”.
To remain inside the EU would be to support anti-free trade behaviour.
If you lambast the BNP for protectionism if you find it, fine, but trying to conflate that with the general concept of leaving th EU is misleading and risks you being accused of another, more Federast, agenda.
FYI I am of the LPUK. We recognise and desire free trade WITH ALL, not just inside the EU.
May 6, 2009 at 1:21 pm
Thank you for your comment.
The EU is indeed a trading bloc, as opposed to a Free Trade Area and consequently there are indeed, quotas, tarrifs and other barriers to entry.
However, as you will note in what I wrote I did not refer to the EU as a free trade entity, but rather made the point that the single market is governed internally by the four freedoms (movement of people, goods, capital and services). I will correct/clarify what I meant in the post: The ‘goal’ of the single market is for it to be a free market internally. I recognise that it is not a fully free market currently.
Your argument, however, supports mine. From a standpoint of self interest, of course it would be disadvantageous to exit the EU as we would encounter all these tariffs and quotas.
I argue that leaving the EU is one of the BNP’s protectionist policies because this proposal, combined with the rest of the BNP’s suggestions, form a protectionist agenda.
Of course, I also recognise the problems the bloc causes for the third world and the concept of free trade in general, particularly through the subsidies caused by the CAP. But currently, the best way to support our economy is to remain within the EU, where not only do we benefit from the single market, but we get to decide how it is run (unlike as a member of EFTA).
April 30, 2009 at 10:37 am
It is a surprise to me that the Swiss manage to survive quite well being surrounded by members of the EU. They also have some world class companies operating on a global basis. They seem to punch above their weight in the world. Surely they must see the benefts of the EU and join the union.
Norway is another country that struggles to survive. It refuses to share its fish with the other countries in Europe and its fisherman suffer accordingly. They get all of the problems and none of the benefits of the EU. Why aren’t the Norwegians clammering for membership?
Why aren’t the English allowed a referendum on the EU Constitution/Lisbon Treaty? Isn’t the EU democratic?
May 12, 2009 at 12:12 pm
Yet, Iceland is preparing to apply to EU membership as soon as Ms. Sigurdardottir says is possible. The cautionary tale of Iceland shows how dangerous it is for a medium sized economy such as the UK’s (or small in the case of Iceland’s) to support global corporations without the safety net of the single market (or indeed the single currency).
The Swiss already have preferential trading agreements through the EFTA but it is the peculiar nature of the Swiss banking system’s evolution that its many wealthy clients rely on Swiss neutrality – often to dodge the law.
Yes I agree that the CFP is a mess and it needs urgent reform to preserve not just British fish stocks, but the existence of threatened species like cod, which do not respect maritime boundaries.
May 20, 2009 at 11:05 am
[...] again we see the stain of extremism in even this area. Firstly, as I have mentioned previously here and here, the BNP favours the dangerous road of protectionism. More astoundingly however, in a [...]