OVERJOYED at the thought of that European Union-United States trade deal? Neither am I.
As David Cameron pranced round in a suit but no tie this week at the Group of Eight meeting in Northern Ireland, we learned that this grand bargain would be worth £100 billion to the EU, £80 billion to the US and £85 billion to the rest of the world.
Should those figures sound suspiciously exact, that is not entirely surprising. So-called free trade deals are usually oversold, given that it seems the protagonists simply add up the total growth experienced since any such treaty is signed, figure out what is the surplus over what was the average rate of growth before signature and claim it as the fruit of the deal.
Fair enough?
Well, they never work it out in reverse. The last world trade deal, the ‘Uruguay Round’, was signed in 1994, and the global economy did indeed do rather well subsequently. But it continued to do rather well after the collapse of the next attempted deal, in Seattle in 1999, and of the failure of the follow-up talks in Cancun, Mexico, in 2003 and indeed of the collapse of the more modest attempt at a deal in 2005 in Hong Kong .
True, the world economy did finally hit trouble in 2008. But that was nine years after the Seattle failure, nine years that had seen the most enormous boom.
1) More reasons to be uncheerful
THERE may be a respectable case for entirely free trade, but that is never what is being proposed. Instead, we are offered a bureaucratised trading system in which supranational bodies demand the right to go behind national frontiers to dicker with democratically-mandated laws and regulations.
If this sounds like a global version of the European Union, then that is because it was heading that way before the merciful collapse of the abovementioned sets of talks. Already, the World Trade Organisation claims various prerogatives in terms of ordering sovereign governments about.
So the whole thing is horribly undemocratic. Furthermore, given the weakness of Britain’s economy, any trade deal can only worsen our balance of payments position, which has been in the red every single year since 1984.
Finally, this type of ‘free trade’ favours big companies over small ones and allows the former to get bigger still. Who knows? Maybe one day they will be ‘too big to fail’ and have to be bailed out by taxpayers.
Have we learned nothing from the last piece of globalisation-mania, the one that swept through financial services?
2) It's that cliche again!
A little while ago, I suggested that the old official catch-phrase in the wake of any disaster – the one promising ‘a full public inquiry’ – had been replaced by ‘a specific criminal offence’, as in promises of a specific criminal offence of rigging the LIBOR interest rate or of trying to conceal information relating to poor care in the NHS.
This week, we have heard the Parliamentary banking commission call for a specific criminal offence of reckless banking (and for ‘more women’ in banking, thus potting both the thought-free panaceas of our time in the same report) while the Department of Health has pledged a specific criminal offence of trying to cover up failings in the NHS...hang on, shouldn’t we have that by now (see above)?
3) Another fine idea (I don’t think)
HARD to believe, but when the great anti-money laundering industry, with its trusty staff of retired bobbies, ambitious civil servants and eye-for-the-main-chance lawyers first set up shop in the early Nineties, it was rather daring to suggest what many of us suspected, which was that it had little to do with stopping the flow of funds to the IRA or the Triads or whomever and everything to do with stopping people from dodging tax.
Not any more. World leaders bristle with indignation at those refusing to pay their fair share, and at the G8, David Cameron unveiled a new wheeze in the anti-dodging repertory, which is to insist on knowing who ‘really’ owns every company in the world.
Not only will many jurisdictions refuse to play ball, but even back home, the deployment of syndicates, partnerships, powers of attorney and straightforward unofficial agreements are likely to frustrate this wizard wheeze.
Those are just my top-of-the-head ideas for swerving round Cameron’s Law and I’m not even an accountant or lawyer. Wait until they get to work.
Thanks for reading and enjoy the weekend.
Going South: Why Britain Will Have A Third World Economy by 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan
I can be reached by e-mail at dan.atkinson@live.co.uk