International Trade In Services And Direct: Fill & Download for Free

With the right policy environment, no, it’s more likely to strengthen the UK. Having a policy environment explicitly tailored to taking advantages of the opportunities of Brexit, is a necessary condition for this to be achieved. There are two main parts to this:the economy: Brexit allows for the correction of the aspects of EU membership that don’t work well for the UK. The main examples are trade policy and regulatory policy. Britain’s poor suffer directly from EU membership because the things they need most: food, clothes and shoes for example, are heavily taxed by the EU. And 80% of the tax revenue goes straight to Brussels. Many countries outside the EU, much smaller than Britain, have better trade deals than the EU. After leaving the EU, the UK can expect to achieve the same.taking a more pro-active role in international trade policy: Britain was one of the founder members and a key driving force behind the international trading system, under the WTO. The WTO is badly in need of reinvigoration. Historically, Britain has been one of the key cheerleaders for international trade — the greatest enemy of poverty ever known. Within the EU, Britain has no trade policy “personality” as this entire function is subcontracted to the EU. After leaving the EU, the UK can take a proactive role in giving international trade a new impetus, particularly in boosting trade in services.

It would be… if the kind of trade you wanted to do was between Rome and India. But that misses the point of the Arabian trade: it was not a simple transit from points A to B. Arabia, thanks to her central location and political “neutrality”, was a dissemination centre for the dozen countries around it. Mecca was what we call an entrepot: a place where merchants from different places could exchange goods.You, our Yemeni merchant, could sell your spice or silk to people who “knew people” (who knew other people, etc.) in markets in Syria or Mesopotamia or Persia, while getting good money and cutting your journey down to only a short trip to a neighbouring city. Your goods might travel very far, but you personally never left your regional network of contacts.The natural resources and hence the indigenous production of the (Arabian) peninsula, therefore, always fell short of the increasing population. Scarcity and the pressure of population drove (the Arabs) towards the more fertile regions surrounding them. The effect of this was two-fold. First, their emigration to the neighbouring fertile lands resulted in their settlement and urbanization there.Second, trade in the commodities of the ancient world with which they were in constant contact due to the central position of the peninsula, found new and wide dimensions. Camel was the fastest means of transportation and it adequately served the social and economic purposes of the Arabs in all their conditions of life. They tended to trade in products of the three continents, spreading to all parts of the world, transporting goods from a place of abundant supply to a place which was affected with want and scarcity. Through this relationship the entire peninsula was transformed into a 'living cell' which throbbed with economic activism. [1]It wasn’t just that Mecca was in a reasonable middle ground: the entire “system” of the communicating Arab tribes provided you (who had no means of tracking markets in distant continents, and might sacrifice years of your life travelling in high-risk ventures) with intermediaries who could get the goods to those markets by selling them within their “known world” from one market-town to another.In the matrix of commercial relationships of pre-Islamic Arabia, from the early Middle Ages, market-fair, as a unique economic institution where demand and supply of goods and services centralized, played a very important role in the socio-economic life of the Arabs. In Arabia these market-fairs were called aswaq (sing: suq). Suq or market is a place in which commerce is carried on; it is a place of articles of merchandise, so called because people take their commodities thither.(…) Sa'id al-Afghani, in his exhaustive book… rightly observes that there were innumerable markets in pre-Islamic Arabia which the old historians generally omit, confining themselves to only periodic markets which were held yearly. It is but natural that every region and district must have a market, because it must have specialized in some product. And every tribe must have some local market held at a given time. We also find markets near the water-places… [2]Mecca was “merely” the largest, or at least in the top three. In particular, if selling from Yemen to Syria is your goal, you would be more likely to find Syrian merchants looking for your kind of goods in Mecca, where they would have gone to benefit from the same network of contacts. When the multiplicity of markets—including both outside countries and Arab tribes themselves as producers/manufacturers—made centralisation of exchange in places like Mecca preferable, it also made those places preferable for even direct exchanges: a neutral middle ground catering to merchants (by not levying taxes and offering little violence, state or otherwise) is easier to get to and do business in than visiting a twice- or thrice-as-distant country.Footnotes[1] INTER-REGIONAL AND INTERNATIONAL TRADE IN PRE-ISLAMIC ARABIA on JSTOR[2] INTER-REGIONAL AND INTERNATIONAL TRADE IN PRE-ISLAMIC ARABIA on JSTOR

Defence of Brexit or the case for Brexit that its supporters have been making all along?Sorry, the question does not permit a concise answer, so this is longer than usual. Please bear with me.In “Clean Brexit” the economists Liam Halligan and Gerard Lyons argue that while the EU has done well in harmonising standards in goods, thus reducing barriers to trade, it has done poorly in services.[1] They argue that for services exports to the EU, there is almost no difference between being an EU country and a non-EU country.If we understand this, we understand one of the causes of Brexit. The UK economy is structured differently from the EU’s centre of gravity. If (as we’d expect) the EU’s internal market and external trade policies were geared towards its centre of gravity, we’d expect the outliers like the UK, to do poorly relative to the mainstream.And that’s exactly what we see:the EU is geared towards its own internal market, whereas the UK is more interested in external markets. The UK is unique in the EU (apart from Malta) for exporting more outside the EU than within itthe EU, both internally and externally, is more geared towards trade in goods than trade in services. The UK on the other hand, is more interested in trade in servicesWe cannot ignore manufacturing. It accounts for 10% of our GDP. I saw some figures a couple of years back that said the UK is the world’s eleventh largest manufacturing country. Even in areas we are relatively weak, we’re no minnows.The question asks how leaving the EU allow the UK to maximise its advantage in services. This is a complex and extremely important question. I do not know the answer. However, I would offer the following suggestions.To maximise our strength in services, we must first have a domestic economic strategy. This is because, to persuade foreign countries to open their services markets up to us, we will have to open our goods and agricultural markets up to them. Our domestic manufacturers will need to be resilient to new and intensified international competition.Unlike some, I do not shrug my shoulders and dismiss the wastage of domestic production as part of the process of creative destruction. Free access to our domestic markets should be phased in over time. A period of 3 years sounds about right. During that time, we should do the following things:a publicly sponsored programme to invest in skills, education and training, to increase the resilience of our industry to foreign competition. This would be via government sponsored vocational training programmes and tax breaks for corporations investing in employee training and educationfocus on barriers to foreign direct investment through public investment in infrastructure and tax breaks for investment. Again, this is needed to improve the resilience of our industry to foreign competitioninvest in the supply of attractive and affordable housing. This is necessary to address the inevitable squeeze on nominal incomes introduced by greater foreign competition in goods and agriculturedeclare the port areas of the North East and North West as free economic zones. This will allow them to develop as international hubs for manufacturing and assembly, for goods to be exported, made from components sourced from throughout the worldreform our regulatory system away from the EU’s code-based approach to one based on the philosophy of outcomes and incentives. This will allow our economy to respond more flexibly to the challenges posed by greater international competitionInvest in and develop trade missions to the fastest growing economies in the world. The economist John Ross estimates that China and the economies associated with the Belt Road will account for 46% of global growth over the next five years, versus 24% from North America and 10% from the EU. While Germany’s GDP is expected to grow 14 per cent by 2030, India’s economy is expected to more than double over the same period.The gargantuan Asian countries of China, India, Indonesia and others are investing at an astonishing rate. They are exactly the sorts of market that need the knowledge-based skills, so abundantly supplied by our world-class services economy.Finance for their investment, business consulting and accounting for startups, new investors and distressed companies, legal services for contracts and insurance services are all in massive demand and the UK is among the world’s best at supplying them. The purpose of the trade missions is to understand the main barriers to deepening our trading relationships. Is it qualifications? Is it skills? Is it certificates? Is it culture? Is it language? Is it regulation? Is it local presence?Having first understood the barriers to greater services trade, we must develop an offer that aims to overcome these barriers. Aside from the benefits of access to our services expertise, the offer must address what our counterparts want, in return.It could be a relaxation of visas (India has asked for this). It could be a big expansion in access to our universities. (How about British universities set up new colleges in India and China, offering sandwich courses with a year in the UK, for the brightest and best?) This would not only be a services export in itself, it would also promote deep and long lasting cultural and linguistic connections.The offer will almost certainly involve opening our market to their goods and manufacturing exports. These will create challenges for domestic economic policy (see above) but let’s not forget that there are benefits too. We currently pay about 20% too much for food, clothes and shoes, thanks to EU tariffs. Who spends proportionately the most on these? The poor. Importing them at world prices would be a significant increase in real incomes, for the poorest in our society.I have recently been involved with a company investing in India. The regulatory barriers to foreign investment are quite eye opening. Our trade mission should focus hard to understand what these barriers are. It should then attempt to negotiate access to British investment, via a deep and comprehensive trade deal, taking explicit account of what the other side has requested.The expansion in global demand for our knowledge-based skills will lead to more (very well paid) jobs in these areas. We’d better make sure our education system is producing people with the right skills. The people we’re already producing are among the best in the world, but are we producing enough of them to meet expanding demand? It goes without saying that our immigration policy needs to maintain access to suitable talent.Focus on multilateral relationships. Much discussion (including the above) is about bilateral relationships. However, post Brexit, there’s plenty of opportunity to engage at the multilateral level — and plenty of upside too. While EU membership is exclusive, other multilateral partnerships, are not.NAFTA and the Trans Pacific Partnership (TPP) are non-exclusive multilateral organisations. A post-Brexit Britain could cooperate with them. By focusing its trade mission at the multilateral level as well as the bilateral level, the UK could achieve deeper cooperation involving access to services markets.Britain has rather lost its way in participating in global organisations that promote trade, investment and international standards. The World Trade Organisation (WTO) is the greatest multilateral trade organisation, of all time. The progress it has made in liberating world trade, especially in goods, is incalculable. The General Agreement on Tariffs and Trade, the Trade Facilitation Agreement and the Agreement on Trade-Related Aspects of Intellectual Property Rights are all enormously successful WTO treaties that have had great success in eliminating trade barriers at all levels, from customs to regulation.The General Agreement on Trade in Services has had some success in liberalising trade in services but there’s much room for improvement. A post-Brexit Britain can retake its seat at the WTO and re-invigorate its focus on trade in services. International standards for financial prudence and recognition of qualifications are clear areas where progress can be made.Another area where the UK can focus would be the WTO’s Trade in Services Agreement (TiSA). The UK has a powerful ally in the US, that wants to promote a multilateral focus on barriers to trade, in services.Bringing it full circle. The UK has a world class services sector. People with the right skills are very, very well paid. The EU hasn’t done much to increase trade or demand for these skills and that’s essentially what Brexit is there to correct.The right approach has no silver-bullet. It is a complex, multifaceted approach involving both domestic and international policy, both at the bilateral and multilateral levels.It will take some time for the full extent of the benefits to be realised but the objective is an increased global demand for the skills where the UK is the world’s best. If successful, it would result in a considerable increase in demand for very highly paid professions, resulting in the country as a whole becoming substantially richer.This in itself, is not without its challenges. I mentioned above that the UK will need specific domestic policies to allow our manufacturing and agricultural sectors to rise to the occasion. But we cannot ignore the fact that the end-result will involve one part of the economy merely staying afloat, while another part thrives. We cannot expect this to do much for national cohesion or solidarity. Income disparities will probably increase.What’s the solution? Stop asking me all these awkward questions! I’ll offer the following two thoughts in closing:introduce a new negative income tax band for all earnings below £20,000localise our political system to allow all social welfare policies to be more accurately targeted. This will help avoid the inevitable trade offs involved in a centralised system, between false positives (where the system is overly generous) and false negatives (where the system is overly harsh).More thoughts on the latter idea, here: Barney Lane's answer to Lane v Hawkins: What is your vision for the UK?Footnotes[1] Liam Halligan, Gerard Lyons: Amazon.co.uk: Kindle Store