WTO terms

It is not fashionable in Liberal Democrat circles to quote Christopher Huhne, especially not in the context of The Orange Book, but I was struck by a couple of paragraphs in his contribution to the compilation by Paul Marshall and David Laws. Note that this was published in 2004, before there was a real threat to our membership of the EU and even before the transatlantic credit crunch of 2007/8.

He writes that "trade liberalisation has been one of the great post-war successes, and has been rewarded with greater imports and exports than ever before. However, there has been much concern that the legal framework for liberalisation - the World Trade Organisation's dispute procedures - militates against developing countries. This is mainly because of their relative lack of access to the official and legal back-up that the developed countries can muster". One could add that the smaller the developed country, the more disproportionate is the cost of that back-up. This is something we will have to provide ourselves from tomorrow onwards, instead of being able to rely on the collective expertise of the EU. Of course, in those happy days of the GW Bush presidency, nobody foresaw that a future US administration would kibosh the WTO dispute procedures altogether by blocking appointements to its appeals panel.

(Huhne closes his article with a warning against nations closing themselves off from the world marketplace, citing the fates of Libya and the former Soviet Union as warnings. Trump's protectionism has not yet gone that far in practice, but his rhetoric has.)

In a letter to the FT in December 2018, Huhne demolishes an argument by Priti Patel in favour of trade on World Trade Organization terms on the grounds that “this option would make the UK economy substantially less open to competition, erecting barriers to nearly half of our trade”. He also points out that regulatory standards and other non-tariff measures are now greater barriers to trade than tariffs alone. He asserts that if “a country wants to set its own regulatory standards, rather than share the process of doing so as we do in the EU, it will inevitably impose border costs as each side checks compliance. In the short term, that process will cause chaos at pinch points such as Dover-Calais through which so much of our fresh food is imported. In the long term, it will make Britain a less competitive marketplace, and will exact a heavy economic cost".

Sadly, it looks as if Boris Johnson and Dominic Cummings are as likely to listen to experts like Huhne and Laws as Cameron and Osborne were. 2021 could be a grim year.