Tariffs impact every part of the food chain

The FDF’s comments were in response to a report by activist group the Consumer Choice Centre (CCC), which claimed imposing tariffs on food would send a signal to the rest of the world that post-Brexit Britain would pursue protectionism ahead of consumer interests.

Maria Chaplia, media associate at the CCC, said: “Free trade is vital for consumer choice as it allows consumers to enjoy a greater variety of products at a lower cost. Interventions in the form of tariffs, non-tariff barriers or quotas hit consumers the hardest, and, therefore, should be avoided or decreased at all costs.”

Liberalisation 

Chaplia went on to suggest a system of unilateral liberalisation – reduction or elimination of government regulations or restrictions on private business and trade – could counter a 2.2% dip in GDP by 2030, should the UK leave without a deal.

“Much of the UK’s post-Brexit success will mainly depend on the UK’s ability to develop a comprehensive Free Trade Agreement with the EU, abolish import tariffs on agriculture, and build FTAs with other countries by embracing openness, deregulation and trade liberalisation and, conversely, neutralise and potentially even exceed the Brexit costs,”*​ she added.

“If Brexit comes with tariffs on food, a small group of people, British farmers, will win while every British consumer will lose.”

International consumer group urges UK to rein in on tariff threat

An international consumer group has urged the UK to either abolish tariffs or keep them low in order to look after British consumers post Brexit.

Responding to the disagreements in the British Cabinet on post-Brexit food tariffs, the Consumer Choice Center (CCC) has emphasised the importance of trade liberalisation for keeping consumers in a strong position after Brexit.

UK’s potential gains from trade after Brexit “can outweigh the costs”, the CCC’s newest report finds.

Maria Chaplia, media associate at the Consumer Choice Center, said: “Imposing any tariffs on food will not only put another burden on British consumers and increase the costs of Brexit but will also send a signal to the rest of the world that post-Brexit Britain will pursue protectionism ahead of consumer interests.

Free trade is vital for consumer choice as it allows consumers to enjoy a greater variety of products at a lower cost.

“Interventions in the form of tariffs, non-tariff barriers or quotas hit consumers the hardest, and, therefore, should be avoided or decreased at all costs,” said Chaplia.

The CCC representative warned that leaving the EU without a deal would cost the UK 2.2% of GDP by 2030.

“However, unilateral liberalisation would help compensate up to 80% of that reduction in real GDP.

Therefore, it is key that after Brexit the UK either fully abolishes its tariffs on food, or keeps them low.

“Much of the UK’s post-Brexit success will mainly depend on the UK’s ability to develop a comprehensive FTA [free trade agreement] with the EU, abolish import tariffs on agriculture, and build FTAs with other countries by embracing openness, deregulation and trade liberalisation and, conversely, neutralise and potentially even exceed the Brexit costs.

“If Brexit comes with tariffs on food, a small group of people, British farmers, will win while every British consumer will lose,” concluded Chaplia.

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How protectionism hinders progress

Imagine you’ve been on the team with the same people for decades, growing rice let’s say. You are well aware of the capabilities of your colleagues, and you are on good terms with your boss. More importantly, you have developed a working schedule for yourself, and have been sticking to it deliberately – repeating the same tasks day by day without attempting to improve the quality of their performance. You have been doing fine, just like everyone else on your team. 

One morning, your boss announces that there is a new employee or group of employees from abroad joining the team. Naturally, every well-established tribe is suspicious or even hostile towards newcomers, especially if it’s not accustomed to dealing with changes. You and your colleagues will, therefore, try to find a way to persuade your boss to change their mind. After all, why hire someone new, or why alter anything at all, if you and your consumers are doing fine

On their first day, the newcomers carefully examine your workplace and conclude that your team’s productivity and attitudes are completely outdated and have been far behind world progress for years. Added to that, they find out that the prices you charge are much higher than those in countries where they come from, and that your consumers are of course unaware of that. Their impression is that your boss has been consistently covering for you in order to “protect” you from competition. They are determined to change it: they suggest more innovation, lower prices to the benefit of consumers, and the elimination of the fine mentality. 

After careful consideration, your boss chooses to implement their recommendation of competition. They get excited about taking your industry to the next level and about the variety of choices they can offer to their consumers with the help of the new model. However, the chances of you and your colleagues getting fired are high.

Now, let me translate this into politics and tell you that the boss is the government, and they are choosing free trade over protectionism. You are, therefore, going to blame the policy of free trade for the loss of your job. But is that really so?

In 1942, Austrian political economist Joseph Schumpeter explained: “The opening up of new markets, foreign, or domestic … revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of creative destruction is the essential fact about capitalism.”

However merciless it may sound, creative destruction underlines every stage of progress in every sphere of our life. We wouldn’t be able to enjoy Apple products or companies like Uber and Airbnb if they hadn’t succeeded in disrupted the established order of the time.

Most importantly, even though these businesses are on top of the tide right now, there will inevitably come the moment when they will get swept away by that very tide if they stop innovating – just as libraries are being replaced by Wikipedia, bookshops by Kindle, traditional taxis by Uber, and all sorts of driving cars by Google driverless cars. There are people behind these developments who have lost their jobs and who tried to oppose progress as much as possible – people who called for protection?

Progress has harsh means at its disposal, but let’s be honest, now that civilisation has progressed so far, can we all agree that the benefits of it are much higher than the costs? A hint: you’re reading this on your phone, tablet, or a laptop.

Plainly speaking, progress is any kind of development pursuing a better outcome than the existing order. Free trade, therefore, is another expression of progress, and that’s why it’s opposed by industries that stopped innovating long ago and are afraid of getting wiped out. These industries do fine thanks to government subsidies, tariffs, or quotas. 

The issue with free trade, as with every progress-oriented initiative, is that it’s difficult to draw a clear line between short-run costs and long-run gains. The short-run costs do include the destruction of some jobs. As mentioned earlier, progress comes at a price.

Let’s look at the manufacturing industry, which is usually the loudest in anti-free trade debates. Most of the job losses in manufacturing, according to Michael J. Hicks and Srikant Devaraj, didn’t come directly from the abolishments of import restrictions, but from progress in another closely related area: technology. According to the findings of the report, only 13 per cent of job losses in the US manufacturing industry from 2000 to 2010 were caused by international trade. 

Speaking of the long-run gains, while the employment in the manufacturing industry dropped, the number of full-time employees in the US has increased by almost 20 million people since 1991. Moreover, GDP went up as well.

Progress has a cost, and people swept off by its tide are generally unable to accept the benefits of free trade. However, while attempting to protect one group of people and focusing exclusively on short-run costs, protectionism is only functioning to prevent progress. Does any reasonable consumer want to be protected from lower prices and a greater diversity of products?

However, free trade has something for everyone. With market dynamics increasing, the disruption brought by free trade brings in countless opportunities to find our place in a brave, new world. It’s high time we learned to welcome new competitive team members, not seek protection from their ambitions. Maybe then we won’t just settle for fine, we will strive for greatness.

EU duties on goods from Southeast Asia as a Post-Brexit trade opportunity

Where the EU is walking the plank, the UK should be able to recognise and seize post-Brexit opportunities.

On 6 November, the Italian government asked the European Commission to apply the “safeguard clause” on rice imports from Cambodia and Myanmar in order to protect Italian rice growers. Protectionist measures against southeast Asian countries are not a novelty and have been vehemently backed up by France, Spain, Greece, Portugal, Hungary and Romania.

The EU ‘safeguard clause’ hurts consumers across the EU bloc

Under the ‘safeguard clause’ enshrined in the Treaty of Rome, when imports from a third country jeopardise the trade balance of an EU Member State, it can ask to ‘remedy the situation’, otherwise to introduce trade barriers.

Such interventions pursue a single aim: to protect a specific group from competition. However, whilst taking the producer side protectionism hurts consumers who are the main beneficiaries of free trade.

The Association of Southeast Asian Nations (ASEAN) is the third largest trading partner of the EU. In 2017, co-operation with the ASEAN resulted in the output of more than € 227,3 billion in goods. As part of this economic engagement, the European Union has been actively trading with both Myanmar and Cambodia and therefore using the agricultural imports, in particular rice, to feed up the EU market.

Should the EU choose to act at the whim of Italian rice growers, it will strip consumers all across the bloc of the opportunity to enjoy a great supply of rice and consequently a favourable pricing.

Post-Brexit UK freely trades with Southeast Asia and not only

As of now the UK has a trade deficit with Southeast Asia. In 2016, UK exports in goods and services to Southeast Asia estimated £13.6 billion and UK imports from the region amounted to £18.8 billion.

While it is of no surprise that Singapore as a former UK colony leads the region, Cambodia and Myanmar, which are next in the queue for the EU trade barriers, are important trade partners as well. In 2016, the UK imported £0,9bn in goods and services from Cambodia and £0,2bn from Myanmar.

Even though trade relations between the UK and Southeast Asia countries make up only for a small fraction of a crucially important economic engagement with the EU, they serve as a significant trade field to explore.

Some of potential co-operation channels are bilateral and multilateral free trade agreements between the UK and ASEAN countries. Moreover, once the UK has put the wind back in its sails and left the EU Single Market and the Customs Union, it will also be able to abolish all import tariffs on the goods it doesn’t produce, most of which belong to the agricultural segment, including rice.

Brexit therefore represents a momentous opportunity which has a propensity to change the history of world trade and pivot if away from protectionism. By exiting the EU, the UK is not only saving its consumers from detrimental outcomes of the EU’s protectionism, but also gets a chance to foster its co-operation with Southeast countries and reclaim its heritage as a trading nation.

Originally published at https://www.vocaleurope.eu/eu-duties-on-goods-from-southeast-asia-as-a-post-brexit-trade-opportunity/?fbclid=IwAR2_Z4zLar4ImfsUouDknBAET4Vy7T7Sa-zhikFwG3yXM2xbO1u5bqNBBiY

Banning milkshakes won’t prevent obesity

Core Tip: This week, campaign group Action on Sugar has called for bans on high-sugar milkshakes, such as the Instagrammable ‘freakshakes’, but this approach won’t prevent obesity, says Maria Chaplia, Consumer Choice Center Media Associate.
This week, campaign group Action on Sugar has called for bans on high-sugar milkshakes, such as the Instagrammable ‘freakshakes’, but this approach won’t prevent obesity, says Maria Chaplia, Consumer Choice Center Media Associate.

“In case the milkshake ban proposed by the Action on Sugar receives support from the governmnent, consumers will be subjected to a yet another futile lifestyle regulation,” she says. “The evidence shows that Government-led navigation of consumer’s preferences doesn’t improve public health.

“It is undoubted that obesity is a pressing issue across the world. Most anti-obesity government programmes seek to reduce energy intake, but this approach hasn’t proved successful so far. Numerous evidence indicates that weight excess can be cured through the increase in energy expenditure, achieved through physical activity.”

She added: “According to Public Health England, physical activity in the UK declined by 24 per cent since the 1960s. The average energy consumption followed and has recently dropped too.

“If a 300-calorie ‘grotesquely sugary’ milkshake is unavailable on the market, consumers will opt for a couple of Cadbury’s chocolate bars, 230 calories each. Government is incapable of stopping consumers from making harmful choices through coercion, it can focus on encouraging healthy attitudes though.

“The UK nanny state primarily targets food, tobacco and alcohol and has been recognised as one of the most meddlesome in Europe. Step by step, it has been taking over the freedom to choose and imposing its lifestyle preferences on consumers.

“NHS Christmas dinner guidelines, a sugar levy and now a suggested ban on milkshakes are not only ineffective nutrition regulations, they are warning signs of further interventions.”

Banning milkshakes won’t prevent obesity, says consumer specialist

This week, campaign group Action on Sugar has called for bans on high-sugar milkshakes, such as the Instagrammable ‘freakshakes’, but this approach won’t prevent obesity, says Maria Chaplia, Consumer Choice Center Media Associate.

“In case the milkshake ban proposed by the Action on Sugar receives support from the government, consumers will be subjected to a yet another futile lifestyle regulation,” she says. “The evidence shows that Government-led navigation of consumer’s preferences doesn’t improve public health.

“It is undoubted that obesity is a pressing issue across the world. Most anti-obesity government programmes seek to reduce energy intake, but this approach hasn’t proved successful so far. Numerous evidence indicates that weight excess can be cured through the increase in energy expenditure, achieved through physical activity.”

She added: “According to Public Health England, physical activity in the UK declined by 24 per cent since the 1960s. The average energy consumption followed and has recently dropped too.

“If a 300-calorie ‘grotesquely sugary’ milkshake is unavailable on the market, consumers will opt for a couple of Cadbury’s chocolate bars, 230 calories each. Government is incapable of stopping consumers from making harmful choices through coercion, it can focus on encouraging healthy attitudes though.

“The UK nanny state primarily targets food, tobacco and alcohol and has been recognised as one of the most meddlesome in Europe. Step by step, it has been taking over the freedom to choose and imposing its lifestyle preferences on consumers.

“NHS Christmas dinner guidelines, a sugar levy and now a suggested ban on milkshakes are not only ineffective nutrition regulations, they are warning signs of further interventions.”

Originally published at https://fdiforum.net/mag/banning-milkshakes-wont-prevent-obesity/

How EU Protectionism opens doors for Post-Brexit Trade

While the EU is walking the plank on international trade, the UK is very well positioned to recognise and seize post-Brexit opportunities.

On 6 November, Italy’s government asked the European Commission to apply the “safeguard clause” on rice imports from Cambodia and Myanmar in order to protect Italian rice growers. Protectionist measures against southeast Asian countries are not new and have been vehemently backed up by France, Spain, Greece, Portugal, Hungary and Romania.

The EU ‘safeguard clause’ hurts consumers across the EU bloc

Under the safeguard clause enshrined in the Treaty of Rome, when imports from a third country jeopardise the trade balance of an EU Member State, it can ask the European Commission to ‘remedy the situation’, or introduce trade barriers.

Such interventions have a single aim: to protect a specific group or class from competition. But by endorsing protectionism for the producers, it serves to  hurt consumers who are otherwise the main beneficiaries of free trade.

The Association of Southeast Asian Nations (ASEAN) is the third largest trading partner of the EU. In 2017, trade with the ASEAN resulted in the output of more than € 227,3 billion in goods. As part of this economic engagement, the European Union has been actively cooperating with both Myanmar and Cambodia and therefore using the agricultural imports, in particular rice, to feed the EU market.

Should the EU choose to act at the whim of Italian rice growers, it will strip consumers across the bloc of the opportunity to enjoy a great supply of rice and consequently favourable prices.

Post-Brexit UK could freely trade with Southeast Asia and many others

As of now, the UK has a trade deficit with Southeast Asia. In 2016, UK exports in goods and services to Southeast Asia estimated £13.6 billion and UK imports from the region amounted to £18.8 billion.

While it is of no surprise that Singapore as a former UK colony leads the region, Cambodia and Myanmar, next in the queue for the EU trade barriers, are important trade partners as well. In 2016, the UK imported £0,9bn in goods and services from Cambodia and £0,2bn from Myanmar.

Even though trade relations between the UK and Southeast Asia countries make up only for a small fraction of a crucially important economic engagement with the EU, they serve as a significant trade field to explore and examine.

Some of the potential cooperation channels are bilateral and multilateral free trade agreements between the UK and ASEAN countries. Moreover, once the UK has put the wind back in its sails and left the EU Single Market and the Customs Union, it will also be able to abolish all import tariffs on the goods it doesn’t produce, most of which exist in agriculture, including rice.

Brexit, therefore, represents a momentous opportunity that has a propensity to change the history of world trade and move the needle away from protectionism. By exiting the EU, the UK is not only saving its consumers from detrimental outcomes of the EU’s protectionism but also allows it to foster its cooperation with Southeast Asian countries and reclaim its heritage as a prime trading nation.

Originally published at https://www.speakfreely.today/2018/11/09/eu-protectionism-opens-doors-post-brexit-trade/?fbclid=IwAR1mq7XxBwI1tInq9KAcQcZRra-dydNltnDntk4Tof4T3Ss4mGJs6BFYq68