Trade Deals and the EU

[carrie]

I keep hearing about trade deals that the EU have with other countries, if Britain votes to leave the EU then they will no longer be part of those trade deals.
What are trade deals and why do we need them? Why can't we just export to other nations without any prior understandings?

[newcastle]

In its simplest form.......any country is inclined to impose a tariff (import tax) on goods coming from outside in order to protect its own businesses manufacturing those goods - by making the imported stuff more expensive.

So countries set up trade agreements......you don't tax our goods and we won't tax yours.

This was one of the fundamental concepts of the origins of the EU....the so-called "single market"

[Horus]

Couldn't agree more with the above, but would add that even in this 'free market' there is still some protectionism between member states and of course it did not stop China from dumping cheap steel into Europe and causing the demise of Tata Steel in the UK.

[carrie]

I read that the EU had been negotiating trade deals with countries in South America for 15 years and still not reached an agreement, if it is just a case of "we wont put on tariffs if you wont" what takes so long? Surely we have been selling to these countries for the past 15 years why do we need trade deals.

[HEPZIBAH]

I read that the EU had been negotiating trade deals with countries in South America for 15 years and still not reached an agreement, if it is just a case of "we wont put on tariffs if you wont" what takes so long? Surely we have been selling to these countries for the past 15 years why do we need trade deals.

Maybe we don't need the trade deals but maybe they do. By they, I mean the 'suits'. How else will 'they' get lots of free travel to far flung places, being wined and dined on the finest, entertained in whatever manner befitting their post (and sometimes perhaps not so befitting ). There has to be some reason these things go on for years, even decades, without any obvious result.

[Horus]

Its all 'Apples & Pears' at the end Carrie, as it stands we are all supposed to be able to sell just about anything to another member country with no tariffs being involved. In reality just so long as the merchandise or service invlved meets international standards (all countries have them) then the only barrier to trade is "do your cheaper goods destroy or impinge upon our own industry? " in most cases it does, therefore you apply a tariff to level the field, but of course it is a two way traffic. If you erect trade barriers say against British Beef (not forgetting that the French did so even in contravention of EU law during the BSE debacle) then the UK could for example put heavy taxes on French Cheeses and Wines, we could also do the same with all German made cars in a tit for tat response against unfair tariffs being put on British exports to the EU especially as the UK is their biggest market. If it does anything at all it does ease the flow of goods throughout Europe, but you should not forget that we (and the EU) still trade quite happily with countries that we have no deals with.

One red herring that gets thrown out by the stay campaign is that we would be at the back of the queue in negotiating a trade deal with America. Well the reality is that for the last 7 years the Americans have been trying to 'impose' a TTIP arrangement with the EU and it is unlikely to ever get agreed. Mainly because it would open up all aspects of European businesses to American practices, for example being able to sue Governments if an American company was to lose money as a result of their legislation. A good example is the American tobacco corporation Phillip Morris currently trying to sue the Australian government for loss of revenue due to its opposition to cigarette sales and that could happen here. They would also want to sell GM goods into Europe of which Monsanto (American owned) would be the main benefactor as they hold most seed patents. Then we have American beef, their laws are so lax with regards to the use of antibiotics and other growth promoting drugs that it is currently banned here. In the same way that the UK for example would never get to sell into American markets (regardless of any BSE stigma) due to the huge protectionist lobby of American cattlemen.

Having said that we still sell them the goods they want, the only time you get a problem is if it affects your own industry in some way, a classic example is the absurd and wasteful EU agricultural policy which is set up to favour the less productive French farmers as opposed to the more efficient UK farmers, but it never gets changed or scrapped because of the French opposition to it being revised.
Basically as the EU exports us more than we sell to them it would be cutting off your nose to spite your face if they tried to get awkward about trading with us, we actually hold the whip hand on any trade deals with the EU.

[carrie]

Thank you for your replies.