Global Trade: Goodbye Uncertainty, Hello Change!

 TTIP like the EU/EZ appears to be grinding to a halt...

In the previous blog, the approach taken was to create a picture that helps explain some of the following:-

• Reformatting from "intractable" Establishment Bubble pseudo-politics
• And thus aiding in explaining the peculiar behaviour of our politicians in both the Leave camps (Vote Leave) and Remain (only the latest eg of this absurd  feedback-looping nonsense today:  Why is the Brexit camp so obsessed with immigration? Because that’s all they have Peter Mandelson.
• Providing an alternative model with kind thanks to Dr. RAE North of EUReferendum.com and Roland Smith of The Adam Smith Institute based on a positive process of Globalization in Trade via harmonization of regulations and standards.

In this blog we're going to see how this works again heavily drawing from the works of Dr. RAE North in particular The Definitive Plan for the UK to Withdraw from the EU: FLEXCIT: The Market Solution) and some of the other "Blogger's Army" sources and The Leave Alliance associations still further:-

• Our politicians themselves are the greatest source of "Uncertainty" to which they continually harangue the public to "vote the right way" once in so many decades when they're forced to deliver a token show of democracy to which they immediately set about corrupting and invoking "heightened uncertainty and FUD". This is the negative picture which I started with in the previous blog's opening illustration.
• This "uncertainty" retards our decision-making processes out of step with the emerging "reality" at Global level which again I illustrated using a graphical "rate of change" visualization. And here is the heart of the EU Referendum question: Tapping that rate of change by voting Leave and removing as a by-product or default a major source of Uncertainty: Both our own (The Prime Actors in The Great Deception) Establishment defeated by the people and secondly the ailing EU which by it's very design the "unstable and incomplete EU Treaties" are a major source of "Political Uncertainty" driving further "Economic Uncertainty" Eg: A fragile EUrozone.
• Some examples will be used to suggest this positive change, is empowering in expanding and explaining how things appear to work and hence work for us and our trading partners.

Again referring to the previous "battleground" inanity we see that "Trade" is heavily considered a part of the Economic Uncertainty used to prevent a Brexit Leave vote in the public and indeed the polling proves this "big idea" is more potent than Migration. Today we see more Legacy News-Media on this subject:-

Brexit would put 250 billion pounds of trade at risk - 'In' campaign

In considering any alternative to European Union membership, Brexit must:-

1. Secure Access to The Single Market
2. Apply for Withdrawal from Political Union via the legal process: Article 50
3. Ensure Trade Continuity
4. Understand the context and conditions for Political Negotiation process to achieve all the above.
5. Only then, does the question of Migration amongst other policies, become a relevant subject at that stage of the process.
6. So firstly Migration should not be 1. and secondly there's bigger fish beyond Migration (5.) in 6., the second most powerful argument for leaving the EU: Prosperity via Global Trade change.

We've already covered 1 and 2 and indeed Trade Continuity has been covered as per The Leave Alliance The UK will not have to renegotiate its trade deals and various other bloggers.

We that for both sides of the argument: Trade is now conducted in multifarious ways and the EU is by far not the only actor in this activity and as such the UK could take even greater actions outside the EU to boost Global Trade.

Looking again at the above, and in connection to the latest developments on the leaking of TTIP documents, then comparing to the plethora of different channels by which trade relationships are formed:-

Trade Argument 1:

The globalisation of regulation should be at the heart of the Leave campaign

"When dealing with international trade, it is said, it is much better for businesses to deal with one set of regulations that the 28 of each of the Members States of the EU.

There lies much of the justification for participation in the EU's Single Market but it is also one of the strongest arguments for ditching the EU and moving on. If, after all, it is better to replace 28 sets of regulations with one, it has to even better for the 162 members of the WTO to get together and replace all their regulations with one set."

However if we consider as above the "network effect" of a larger set of trading nodes, then the same logic applies, why not be part of a global standard for Trade?
FLEXCIT: The Market Solution - 10.6 International Regulatory Cooperation (IRC)

"In particular, it notes that, for large or more advanced economies (or regional blocs), harmonisation might prove difficult as both parties have usually already developed a complex set of advanced standards and regulations. When large trading partners seek a reduction in their bilateral regulatory barriers to trade, it thus concludes, mutual recognition of existing standards may be an easier and better way forward. However, whenever possible, rather than developing competing and often incompatible regional standards, using global standards is the best option."  

Trade Argument 2:

Arguing for membership of the EU as a large bloc leads to stronger negotiating clout than lead to a poor deal with a stronger negotiating partners such as China or the USA.
Well hot off the presses, just in: We're seeing that there's a lot about TTIP that's negative and driven by "power play" and indeed this itself is increasingly grinding the whole process to a halt:-
 EU Referendum: the TTIP leaks

"We've not written a great deal on TTIP on the blog (although it is covered comprehensively in Flexcit) for one very good reason. I've never believed is will happen. Even if it is finally agreed (which I doubt), I would expect Congress to refuse to ratify it.

Now, it appears, it may not get even that far. The massive leak of hitherto restricted documents by Greenpeace Netherland is being widely reported – not least be the BBC as spelling the death-knell for any agreement.  
We've dipped into some of the documents to take a look, and it does seem that there are some quite substantial differences, even after nearly three years of negotiations, with the starting gun actually being fired in November 2011."

In fact there's a whole load of different ways to formulate trade as per the above diagram also from FLEXCIT above comparing the approach of the US-EU talks on the objective of TTIP:

1. Remove Trade Barriers
2. Standardize Regulations (from the infograph summary)

Concerning the Trade Barriers there's numerous methods:-

• Integration/Harmonization through Supranational Institutions (EU); perhaps on some areas Climate Change this may or may not be fruitful as a larger bloc? But it is one of the typologies described by the OECD, there's many more:-
• Treaties/Conventions
• Inter-National Cooperation Agreements
• Joint Standard Setting via Inter-governmental bodies
• Adoption and Recognition of International Standard Bodies standards
• Trade Agreements with regulatory conditions (RTA's, FTA's)
• Mutual Recognition Agreements (MRA's)
• Unilateral Convergence

etc! In many sectors different approaches and/or what is termed "Unbundling" When it comes to trade, the EU isn't that good at it as per Pete North.

Here we see that there are negatives with EU Membership as Pete describes. Another example detailed in FLEXIT and again by Pete, is concerning the IMO and the EU: And they call this "cooperation":-

"This barely requires additional commentary, save to say that here is your irrefutable proof that detailed regulation (hard law) is made by global entities (and that is the trend throughout) - and that the EU removes our vote and overrides our veto in instances that are critical to our economic interests. It also sabotages the timetables to prevent any challenge to barely legitimate assumption of competence. It should also be noted that it is our own civil service report saying this."

And back to FLEXCIT and how this fits in with the UK:-

"The  UK  government  is  fully  aware  of  the  extent  of  IRC  and  has  its development agency, DfID, describe it as "the range of institutional and procedural  frameworks  within  which  national  governments,  sub-national governments, and the wider public can work together to build more integrated systems for rule making and implementation, subject to the constraints of democratic values such as accountability, openness, and sovereignty"

And here we have a powerful argument for Brexit at the core of this globalization argument which as per: The globalisation of regulation should be at the heart of the Leave campaign

Trade Facilitation – a couple of definitions 

• “simplification, standardization, and harmonization of procedures & processes and associated information flows to move goods through the supply chain in a transparent and predictable manner”

• “identifying and addressing bottlenecks that are imposed by weaknesses in trade related logistics and regulatory regimes and that prevent the timely, cost effective movement of goods.”

MEASURING THE IMPACT OF TRADE FACILITATION REFORM

itself globalization and the rate of change and influence of prosperity at global level as per Dr. RAE North at EUReferendum.com:-
EU Referendum: why is Vote Leave trying to lose?

"The point here is a simple one. We rely for our prosperity on international trade, yet the improvements in global trade have stalled. Despite the technical advances in containerisation and shipping, and the expansion of air freight, the huge benefits from reducing tariffs through GATT and WTO have been wiped out by the growing scourge of non-tariff barriers.

Thus, while pre-GATT tariffs were estimated at about 22 percent, recently the Atlantic Council reported the cost of non-tariff barriers (NTBs) to the US automotive trade was 25.5 percent.

For sure, a single, global figure for NTBs is almost impossible to compute and there is no agreed methodology for calculating such a figure. Furthermore, a single value is probably not relevant as there are huge regional and sectoral differences. 

The range varies considerably, from a few percent to as high as 45 percent, growing to 73 percent in some sectors. The World Bank estimates NTB costs in Africa average 40 percent. Nevertheless, what is known as the "ad valorem tariff equivalent" (AVE) - the average value - for NTBs is variously estimated at around 20 percent. It has wiped out all the gains from tariff reductions.

Enter the Bali trade facilitation agreement under the aegis of the WTO in December 2013. As we reported at the time, and has been remarked upon since, the impact could be huge. When fully implemented, it was said that it could increase global GDP by almost $1 trillion.

That is probably an under-estimate. The World Bank offers even higher figures. If all countries reduced supply chain barriers halfway to global best practice, global GDP could increase by 4.7 percent or $2.6 trillion, potentially worth about $60 billion a year to the UK, far outstripping the illusory value of any savings from leaving the EU

Furthermore, world trade overall would increase by 14.5 percent, or $1.6 trillion, this figure itself far outweighing the benefits from the elimination of all import tariffs.

In terms of detail, we have seen reports that agreement on a global tyre specification for passenger vehicles could save $40 billion a year. An ostensibly simple thing like standardising nomenclature for existing pharmaceutical products could save $20 billion. Adopting electronic documentation for the air cargo industry could yield $12 billion in annual savings, and prevent 70-80 percent of paperwork-related delays.

These savings, though, will not happen spontaneously. Nor will they happen without a great deal of work – and leadership. And it is there, in that latter category, that the EU is not delivering."

I think this is a positive of the UK leaving the EU and using the UK's very capable and competent array of strengths to be a force for positive change at global level.

FURTHER READING:-

 Britain's Global Leadership

The Market Solution: Stage Five - Trading with the rest of the world

A Positive Vision In A Wider World

Stuck in the mud: A question of Sovereignty of Policy Control: Independent vs European Union Control?

The above illustration I think manages to visualize the current state of the EU Referendum Campaign; now that Vote Leave are the designated Leave camp and HM Government is coming out more and more using it's full force of power at it's disposal with HM Treasury reports, The President of the United States, Barrack Obama choosing this side and more besides, such as the "9m Leaflet".

I think the simple idea that drives the EU idea, is "One Big Idea", which I referred to previously in Political Barriers To Entry: An Image Of Power; A Course To Ruin

"There is an inherent assumption that those who take up our air-time or are invited to share their views in the lime-light in front of the broadcasting cameras, have somehow earned such an eminent position. Their achievements are the currency with which they deserve our notice or they are rewarded with others taking notice of them. I've long found it curious that actors often are called upon to take up the cause of "climate change", "world peace", "feminism", "palestine" and all the other idols that were pointed out so long ago by Francis Bacon in how people form bias in their thinking. Phony speakers promoting fake ideas. Why fake? I think there's a reason: One Big Idea is far more effective in drawing attraction from people than a series of interconnected and complex associations that more accurately reflects what we would suggest through scientific method is "objective reality" via independent, repeatable measurement that develop a current (but changeable) theory. When this process is "short-circuited" via such presentational problems as propounding "One Big Idea" we end up with something else too: Orthodoxy. In our politics today, such a process has been delivered."

To look at the illustration above, again: We see a tug of war over ownership and indeed money gained from ownership of the above big ideas between the rival camps. I think this enables us to see why Vote Leave recently focused on Migration (Immigration) despite the recent polling survey:-

Economy and immigration key issues for Britons in the EU referendum (Ipsos MORI Political Monitor - April 2016)

It seems to me that Vote Leave is trying to put focus on issues that are clearly "owned" by the their side of the argument in the popular imagination. For example I don't think Fisheries is an argument that can be countered by the Remain side except perhaps some token gestures towards Marine Sanctuaries given the belief that "too many boats and too few fish" was a self-inflicted disaster of Britain's Fisheries without international cooperation when the nothing could actually be further from the truth: The Betrayal of Britain's Fishing to the European Union.

Likewise Migration is generally is within the Leave side of the argument because enough numbers for long enough can't be realistically argued against that the UK no longer has policy control in this area and it generally started around 1995 after John Major's promise of "No more than <50,000 pa" if I remember off hand; which morphed into Labour's Political Correctness stamping down on open debate about the subject. However I suspect given the above polling, that the economy is in fact in the Remain camp's side of the argument because Vote Leave are driven by a campaign without a definitive Brexit plan:-

EU Referendum: why is Vote Leave trying to lose?

The reason is simple: Attention on a "Big Idea" eg Migration that is within the Leave camp's argument ensures the idea that there is a problem persists. However, I think it's a defective and eventually as Dr. RAE North suggests defeatist and hence losing tactic: It's a negative, it is a default and conceding the economy to the Remain camp for short-lived coverage of Migration in the popular imagination. And hence we come back to ownership and the cost or savings ie value of ownership that is battled inanely between the two sides per "Big Idea". The Economy is the biggest "Big Idea" and will ensure that as long as it's on the side of the Remain they'll win the Referendum. This was all so clearly put into writing on the internet a couple of years ago in FLEXCIT: The Market Solution.

Previously, we looked at Vote Leave more in terms of perception and the in my opinion obviously supplicant role they play in this wasteful monopoly by the Political Establishment over the entire functioning of this opportunity of Real (direct) Demoracy: Vote Leave: A Lesson In Power


I think this explains the silly, foolish and deeply irresponsible bandying about of economic "magic money": Große Lüge - The Big Lie of Magic Money. There appears to me even more evidence that "Monetary Policy" and the Spending and Government prudence in this area of the UK is in desperate need of reformation, lagging behind the other areas in our still-developing but under-developed democracy.

So, with the starting illustration dominating the picture of what people are voting for on either side of the referendum and the inevitable crassness of our Legacy News-Media and Politicians commentaries on that picture which inevitably leads to the public response: "We don't have enough information to know how to vote", or "they're all as bad as each other" or, "there's no point in voting it changes nothing" or finally, "how can we vote for fewer politicians and hence fewer liars?"

There's a couple of really useful articles that present a Positive Vision of what Brexit can lead towards:-

EU Referendum: Financial Times in denial

How global regulators are killing the value of EU membership  Stuck in the Middle with EU ~ Roland Smith (Adam Smith Institute)

Both these articles/blogs are incredibly upbeat and postive, they change the above "tug-of-war" nonsense from the ownership of "Big Ideas" into a conceptual paradigm shift in what we are actually supposed to be arguing (in a healthy and functioning democracy) about:-

Globalization: Trade Harmonization via Standardization and Regulation

Policy Areas = blue bubbles. Standards and Regulations Bodies = red bubbles and for finance = yellow (an especially visible example of globalization) and environmental conventions = green

For the purposes of this blog the diagram above is upside down: People know about "The Single Market" (EEA) or indeed in polling "Economy". However these would in fact be at the bottom or be at the end of the final flow of multiple bodies that formulate more and more of the legislative rules for governing standards to improve trade and quality control. As you can see each major policy area is surrounded by many (a few illustrated) specialist bodies that pool expertise in the devising of these regulations and integration with other connected policy areas for example Maritime will involve "Transport" and "Fisheries" and "Food" connecting such as: IMO, Codex Alimentarius, IACO and FAO and UNECE amongst others.

In fact instead of this sliding scale of popularity and ownership contest by our politicians, they are stuck in a small mindset, which needs to be replaced by the positive opportunities that can be a boon to world trade with the UK playing a highly active and connected part in all the multiple bodies, cooperating and sharing expertise in areas at a truly global level.

If we therefore look at the idea of Brexit or the European Union, there is something of an incorrectly framed debate going on which suits the "personality politics" low level of debate that manages to (mis-)characterize the choice as a popularity context between those in office and their prestige vs a bunch of low-grade politicians who make it up as they go along but appear "closer to the people" than the distant British Government which has been a supporter of the EU since the 1960s.

We've already seen more than enough examples of this contrast between the negative and losing arguments and how they manifest in the Legacy News-Media as if they are "the real thing":-

• Defence and Security: Sermonizing on Security
• Environment And Climate Change: Leaving EU would endanger Earth, says Miliband: Former Labour leader issues extraordinary warning that 'our global habitat' will suffer if Britain leaves  

Fortunately in the latter:-

‘If Britain leaves Europe, our environment, our wildlife and our global habitat will be starved of investment, bereft of protections and denied the leadership it needs.’

Pro-Brexit environment minister George Eustice dismissed the claims, saying that the EU offered hampered efforts by Britain to tackle global environmental problems.

Mr Eustice said EU membership had ‘systematically undermined the UK’s place on international wildlife conventions’.

He said Britain had lost its seat on key bodies and was sometimes barred from speaking out without EU permission.

He added: ‘If we vote to leave and take control, the UK would regain its own seat and its voice in vital international wildlife conventions and everything from promoting shark conservation to ending whaling would become much easier.’

There is a realization these "Big Ideas" do need breaking down. And I think this is a really interesting question:-

Will we get more rational politics if we break things down and realize that the expertise at Global Level and the level of coordination is sufficient to produce better results? Therefore these grand political ideas such as Supranationalism, even when we consider Environmental issues, which can be further investigated in FLEXCIT: The Market Solution: 15.0 Environmental Policy:-

"More so than perhaps any other policy area, environment is an amalgam of international, EU and domestic measures, to which the EU is a late arrival: a significant omission in the original 1957 Treaty of Rome was any mention of "environment". Legislation on environmental matters remained largely a matter for member states. "

Noticeably in the new framing of our arguments we can see that there is more complexity in this new positive and emerging picture that does not arbitrate according to popularity tactics in the polls but according to the factual nature of the growing body of legislation at global levels that then interacts with the destination nations, eg UK. Environmental legislation particularly interests me, but I don't take arbitrary sides as the opening illustrating showcases.

So, instead of this negative argument of the past failures we could be reorientating towards a successful and positive future as we tap into the huge change of Globalization instead of our petty and dysfunctional politically failing systems of bad governance:-

Where there's a will there's a way... but do we the people hold the political will for that change in this upcoming Referendum? Or do we have our will (power) sapped by those in charge?