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Some Brexiteers favour a radical response: get rid of all tariffs on imports, as Hong Kong, Macao and Singapore have done. Extravagant assumptions about the ben

Some Brexiteers favour a radical response: get rid of all tariffs on imports, as Hong Kong, Macao and Singapore have done. Extravagant assumptions about the benefits of this explain why some pro-Brexit economists see no deal as much less damaging than most of their colleagues. But tariff abolition would have huge effects on agriculture and some types of manufacturing. The government has no plans for such an extirpation. Followed by no examination of the experience of Hong Kong, Macao, and Singapore. Instead bemoans the "huge effects" on protected industries. One could be forgiven for making the mistake of assuming that a magazine called The Economist would understand the benefits of free trade beyond the EU and the harms of corporate welfare.

tdb7893 8y ago
It would add context but on the other hand they are all very small autonomous Asian cities so I wonder how well the would actually generalize to the UK.
kennywinker 8y ago
Free trade and corporate welfare are not opposites. By allowing free trade you allow companies to operate wherever the operating cost is lowest, while still selling to the residents of your region. Incentivizing local production (by tarriffing imports) means business operate locally, and importantly, pay taxes locally. You can call that corporate welfare, but for many cases I think that misses the mark.
- jstanley 8y ago
  By allowing free trade you allow companies to operate wherever is most efficient. This reduces costs, and therefore reduces prices (through competition). Everybody is a winner (apart from the previously-protected businesses who now have to compete on a level playing field).
  - Pfhreak 8y ago
    Everyone, that is, except the people who have to live with the externalities that come with chasing efficiency. Some of those places that are more efficient are more efficient because, hey, they don't regulate emissions. Or they don't have strict safety standards. Or they don't require employers to take care of injured workers. Clearly, not everybody is a winner.
  - Spivak 8y ago
    > wherever is most efficient This is only true when all actors play by the same rules. Without this requirement the most efficient places to operate are where there are the fewest labor and environmental protections. I would 100% be in favor of eliminating tariffs to countries that meet the same standards but its silly to say that we're better off exploiting not-quite-slave labor.
    - mrtksn 8y ago
      >I would 100% be in favor of eliminating tariffs to countries that meet the same standards That’s the current situation with the EU. Turns out the UK is not happy with that.
      - ralfn 8y ago
        The British upper class wants the freedom to abuse their lower class more and they sold this nonsense to them with a spiel about sovereignty. Thank God the Brits have such a taste for irony. They'll be feasting on this one for the better part of a decade.
CPLX 8y ago
How's the farming community doing in Hong Kong, Macao, and Singapore?
- jstanley 8y ago
  Imposing tariffs on imports is classic protectionism - are you actually arguing that that is a net benefit? Of course the protected industries benefit from protectionism, the argument against protectionism is that everyone else loses. There is no reason that a transaction with a counterparty in Shanghai should incur any more taxes than an equivalent transaction with a counterparty in Manchester.
  - kennywinker 8y ago
    > are you actually arguing that that is a net benefit? Net benefit to who? Global capital efficiency, people? Jobs going overeseas to countries with lower wages and less safty/environmental/etc. regulation has been a net loss for humanity... but it has been a major win for capitol!
    - jstanley 8y ago
      Why is it a net loss to humanity if a person in a poor country does the job instead of a person in your country? They're people too.
      - kennywinker 8y ago
        The lack of safety and environmental regulations, specifically. Also the wages thing, but I understand that is a more nuanced issue, so let’s set it aside for a moment.
  - CPLX 8y ago
    > Imposing tariffs on imports is classic protectionism - are you actually arguing that that is a net benefit? Not sure if it's a net benefit. And neither are you. But there are certainly winners and losers. Protectionism for European agriculture has made Europe a positively lovely place to live. Have you seen it? I recommend the south of France. > Of course the protected industries benefit from protectionism, the argument against protectionism is that everyone else loses. I have a degree in economics, the concept hasn't escaped me. Noticing that having protections evaporate overnight could have massive negative consequences for many is pretty relevant. > There is no reason that a transaction with a counterparty in Shanghai should incur any more taxes than an equivalent transaction with a counterparty in Manchester. If it just happens to turn Manchester into an economic wasteland where the daughters of England are sold into prostitution and working men beg for scraps of food in the street, then those are two reasons. I get the argument you're making. It's a style of economic conversation where you assume frictionless perfect markets and rational allocations of resources. Those of us that actually understand how economic systems work moved on from that sort of simplistic line of thinking generations ago.
paganel 8y ago
It’s incredible how some people in the UK (a country of 60+ million people) are ready to compare themselves to mere city states like HK or Singapore. I for one view at as border-line criminal.
- tomp 8y ago
  Can you explain your reasoning?
ACow_Adonis 8y ago
It's pretty relevant when significant portions of the no vote live in non-London areas and have general hopes (fantasies?) about jobs (such as farming and manufacturing) returning to the UK. The world is not a first year economics class on comparative advantage.
simonh 8y ago
Hong Kong, Macao and Singapore have developed under their respective trade regimes. Britain has developed under another and has huge industries employing millions of people dependent on the current trade regime. Switching to a different model in a controlled way has a reasonable chance to be beneficial in the long run. Switching off the conditions under which the current system operates would be guaranteed to be catastrophic immediately.
- tim333 8y ago
  Although I'm a remainer I kind of like the HK/Singa no import duties system. From a business point of view a big plus is simplicity - instead of lots of regulations you just import / export stuff. I spent a while in HK aged 19 when it was considered a low wage place (58% of UK GPD) and now they are wealthier than us. I agree a no deal brexit would be a mess. If you were going to switch to a HK system you'd want to plan it over some years.

tdb7893 8y ago

It would add context but on the other hand they are all very small autonomous Asian cities so I wonder how well the would actually generalize to the UK.

kennywinker 8y ago

Free trade and corporate welfare are not opposites. By allowing free trade you allow companies to operate wherever the operating cost is lowest, while still selling to the residents of your region. Incentivizing local production (by tarriffing imports) means business operate locally, and importantly, pay taxes locally. You can call that corporate welfare, but for many cases I think that misses the mark.

jstanley 8y ago
By allowing free trade you allow companies to operate wherever is most efficient. This reduces costs, and therefore reduces prices (through competition). Everybody is a winner (apart from the previously-protected businesses who now have to compete on a level playing field).
- Pfhreak 8y ago
  Everyone, that is, except the people who have to live with the externalities that come with chasing efficiency. Some of those places that are more efficient are more efficient because, hey, they don't regulate emissions. Or they don't have strict safety standards. Or they don't require employers to take care of injured workers. Clearly, not everybody is a winner.
- Spivak 8y ago
  > wherever is most efficient This is only true when all actors play by the same rules. Without this requirement the most efficient places to operate are where there are the fewest labor and environmental protections. I would 100% be in favor of eliminating tariffs to countries that meet the same standards but its silly to say that we're better off exploiting not-quite-slave labor.
  - mrtksn 8y ago
    >I would 100% be in favor of eliminating tariffs to countries that meet the same standards That’s the current situation with the EU. Turns out the UK is not happy with that.
    - ralfn 8y ago
      The British upper class wants the freedom to abuse their lower class more and they sold this nonsense to them with a spiel about sovereignty. Thank God the Brits have such a taste for irony. They'll be feasting on this one for the better part of a decade.

CPLX 8y ago

How's the farming community doing in Hong Kong, Macao, and Singapore?

jstanley 8y ago
Imposing tariffs on imports is classic protectionism - are you actually arguing that that is a net benefit? Of course the protected industries benefit from protectionism, the argument against protectionism is that everyone else loses. There is no reason that a transaction with a counterparty in Shanghai should incur any more taxes than an equivalent transaction with a counterparty in Manchester.
- kennywinker 8y ago
  > are you actually arguing that that is a net benefit? Net benefit to who? Global capital efficiency, people? Jobs going overeseas to countries with lower wages and less safty/environmental/etc. regulation has been a net loss for humanity... but it has been a major win for capitol!
  - jstanley 8y ago
    Why is it a net loss to humanity if a person in a poor country does the job instead of a person in your country? They're people too.
    - kennywinker 8y ago
      The lack of safety and environmental regulations, specifically. Also the wages thing, but I understand that is a more nuanced issue, so let’s set it aside for a moment.
- CPLX 8y ago
  > Imposing tariffs on imports is classic protectionism - are you actually arguing that that is a net benefit? Not sure if it's a net benefit. And neither are you. But there are certainly winners and losers. Protectionism for European agriculture has made Europe a positively lovely place to live. Have you seen it? I recommend the south of France. > Of course the protected industries benefit from protectionism, the argument against protectionism is that everyone else loses. I have a degree in economics, the concept hasn't escaped me. Noticing that having protections evaporate overnight could have massive negative consequences for many is pretty relevant. > There is no reason that a transaction with a counterparty in Shanghai should incur any more taxes than an equivalent transaction with a counterparty in Manchester. If it just happens to turn Manchester into an economic wasteland where the daughters of England are sold into prostitution and working men beg for scraps of food in the street, then those are two reasons. I get the argument you're making. It's a style of economic conversation where you assume frictionless perfect markets and rational allocations of resources. Those of us that actually understand how economic systems work moved on from that sort of simplistic line of thinking generations ago.

paganel 8y ago

It’s incredible how some people in the UK (a country of 60+ million people) are ready to compare themselves to mere city states like HK or Singapore. I for one view at as border-line criminal.

tomp 8y ago
Can you explain your reasoning?

ACow_Adonis 8y ago

It's pretty relevant when significant portions of the no vote live in non-London areas and have general hopes (fantasies?) about jobs (such as farming and manufacturing) returning to the UK. The world is not a first year economics class on comparative advantage.

simonh 8y ago

Hong Kong, Macao and Singapore have developed under their respective trade regimes. Britain has developed under another and has huge industries employing millions of people dependent on the current trade regime. Switching to a different model in a controlled way has a reasonable chance to be beneficial in the long run. Switching off the conditions under which the current system operates would be guaranteed to be catastrophic immediately.

tim333 8y ago
Although I'm a remainer I kind of like the HK/Singa no import duties system. From a business point of view a big plus is simplicity - instead of lots of regulations you just import / export stuff. I spent a while in HK aged 19 when it was considered a low wage place (58% of UK GPD) and now they are wealthier than us. I agree a no deal brexit would be a mess. If you were going to switch to a HK system you'd want to plan it over some years.