[clarkmoody]

Some Brexiteers favour a radical response: get rid of all tariffs on imports, as Hong Kong, Macao and Singapore have done. Extravagant assumptions about the benefits of this explain why some pro-Brexit economists see no deal as much less damaging than most of their colleagues. But tariff abolition would have huge effects on agriculture and some types of manufacturing. The government has no plans for such an extirpation.

Followed by no examination of the experience of Hong Kong, Macao, and Singapore. Instead bemoans the "huge effects" on protected industries.

One could be forgiven for making the mistake of assuming that a magazine called The Economist would understand the benefits of free trade beyond the EU and the harms of corporate welfare.

[simonh]

Hong Kong, Macao and Singapore have developed under their respective trade regimes. Britain has developed under another and has huge industries employing millions of people dependent on the current trade regime.

Switching to a different model in a controlled way has a reasonable chance to be beneficial in the long run. Switching off the conditions under which the current system operates would be guaranteed to be catastrophic immediately.

[tim333]

Although I'm a remainer I kind of like the HK/Singa no import duties system. From a business point of view a big plus is simplicity - instead of lots of regulations you just import / export stuff. I spent a while in HK aged 19 when it was considered a low wage place (58% of UK GPD) and now they are wealthier than us.

I agree a no deal brexit would be a mess. If you were going to switch to a HK system you'd want to plan it over some years.

[CPLX]

How's the farming community doing in Hong Kong, Macao, and Singapore?

[jstanley]

Imposing tariffs on imports is classic protectionism - are you actually arguing that that is a net benefit?

Of course the protected industries benefit from protectionism, the argument against protectionism is that everyone else loses.

There is no reason that a transaction with a counterparty in Shanghai should incur any more taxes than an equivalent transaction with a counterparty in Manchester.

[CPLX]

> Imposing tariffs on imports is classic protectionism - are you actually arguing that that is a net benefit?

Not sure if it's a net benefit. And neither are you. But there are certainly winners and losers.

Protectionism for European agriculture has made Europe a positively lovely place to live. Have you seen it? I recommend the south of France.

> Of course the protected industries benefit from protectionism, the argument against protectionism is that everyone else loses.

I have a degree in economics, the concept hasn't escaped me.

Noticing that having protections evaporate overnight could have massive negative consequences for many is pretty relevant.

> There is no reason that a transaction with a counterparty in Shanghai should incur any more taxes than an equivalent transaction with a counterparty in Manchester.

If it just happens to turn Manchester into an economic wasteland where the daughters of England are sold into prostitution and working men beg for scraps of food in the street, then those are two reasons.

I get the argument you're making. It's a style of economic conversation where you assume frictionless perfect markets and rational allocations of resources. Those of us that actually understand how economic systems work moved on from that sort of simplistic line of thinking generations ago.

[Hupriene]

Protecting agriculture can also serve to reduce the impact that the war or large scale crop failures elsewhere in the world might bring. The resulting safety might be worth the market inefficiencies caused by tariffs.

[kennywinker]

> are you actually arguing that that is a net benefit?

Net benefit to who? Global capital efficiency, people?

Jobs going overeseas to countries with lower wages and less safty/environmental/etc. regulation has been a net loss for humanity... but it has been a major win for capitol!

[jstanley]

Why is it a net loss to humanity if a person in a poor country does the job instead of a person in your country? They're people too.

[kennywinker]

The lack of safety and environmental regulations, specifically.

Also the wages thing, but I understand that is a more nuanced issue, so let’s set it aside for a moment.

[yongjik]

This would have made the oddest pro-Brexit argument ever.

"Sure it will personally suck for you the British farmer, but think about the benefit to the avocado farmers in Chile. Brexit for Chile!"

[jstanley]

It's not just the avocado farmers in Chile, it's also the avocado purchasers in the UK.

[jimnotgym]

If they come from Chile then there is likely no tariff into the EU due to the FTA. Perhaps you could drop the FUD?

https://metro.co.uk/2018/09/25/brexit-mps-tweet-about-foreig...

[jstanley]

I didn't bring up Chile, my parent did. Replace "Chile" in our comments with "arbitrary country X" if you prefer.

[CPLX]

If the society you live in today decided to expropriate all of the money and resources owned by a randomly selected 5% of the population, so that 5% of the population was instantly destitute, but then distributed those resources evenly to everyone else, would you consider that society better off, worse off, or pretty much the same as the day before that happened?

[jstanley]

Stealing 5% of people's money is not OK.

Stopping 5% of people from stealing other people's money is a good thing, but might easily be confused with the first thing.

[jimnotgym]

> Imposing tariffs on imports is classic protectionism

Protectionism is the wrong word when you are talking about food supplies. Tariffs are applied selectively to food imports in most countries, to protect farming for food security. Food matters more to people than watered down Randian ideology, once there is a shortage.

[tomp]

> are you actually arguing that that is a net benefit?

Depends on what you define as net benefit... Self-sufficiency, especially regarding basic supplies like food, is hugely important for any independent nation. Personally, tariffs on/protectionism of food industry are what I support the most.

Broader picture, net benefit doesn't mean just economic benefit. I support Trump's tariffs on China and hope EU would do the same, tax the hell out of all polluting and tax-evading countries - that would definitely be a net benefit for the planet.

[OscarCunningham]

Only if the tariffs were clearly linked to polluting and tax-evading. Otherwise they provide no incentive to stop. I don't believe Trump has linked his tariffs to pollution or tax-evasion. He's been talking about China's industrial subsidies, monetary policy and intellectual property theft.

Simply sanctioning bad countries isn't good in itself, unless it forces them to become better.

[tomp]

Indeed, but most nations/governments are so deeply entrenched in "free trade" that they can't just transition directly to "fair trade" (for some definition of "fair"...) without going through the "no free trade" stage first. Anyways, let's hope it continues in this direction and doesn't derail along the way.

[tim333]

There's not much farming there due to not much farmland in those places.

A more useful example would be New Zealand:

> “You had a system dictated by government programs that was thrown out the window overnight,” Hausman adds in a recent interview with The Daily Signal. “But the farmers kind of reinvented themselves and now New Zealand is a powerhouse when it comes to agricultural production on the world stage.” https://www.dailysignal.com/2016/09/22/what-happened-when-ne...

[ngcc_hk]

It is sort of ok. Graduate even said it is hard work but earn more than the salary working in office.

But HONG kong is of different scale and no major industry. Part of UK will be ok but other part like car,airbus... may be not. Not sure about clearance but you can be a Euro centre not in Eu as Rmb is very active here. Hence it is a shift not impossible.

May be a total zero tariff is an option. may say the other side is not. But then a lot of tourist will come to shop.

It is the change that is hard.

[paganel]

It’s incredible how some people in the UK (a country of 60+ million people) are ready to compare themselves to mere city states like HK or Singapore. I for one view at as border-line criminal.

[tomp]

Can you explain your reasoning?

[tdb7893]

It would add context but on the other hand they are all very small autonomous Asian cities so I wonder how well the would actually generalize to the UK.

[kennywinker]

Free trade and corporate welfare are not opposites. By allowing free trade you allow companies to operate wherever the operating cost is lowest, while still selling to the residents of your region. Incentivizing local production (by tarriffing imports) means business operate locally, and importantly, pay taxes locally. You can call that corporate welfare, but for many cases I think that misses the mark.

[jstanley]

By allowing free trade you allow companies to operate wherever is most efficient.

This reduces costs, and therefore reduces prices (through competition). Everybody is a winner (apart from the previously-protected businesses who now have to compete on a level playing field).

[Spivak]

> wherever is most efficient

This is only true when all actors play by the same rules. Without this requirement the most efficient places to operate are where there are the fewest labor and environmental protections. I would 100% be in favor of eliminating tariffs to countries that meet the same standards but its silly to say that we're better off exploiting not-quite-slave labor.

[mrtksn]

>I would 100% be in favor of eliminating tariffs to countries that meet the same standards

That’s the current situation with the EU. Turns out the UK is not happy with that.

[ralfn]

The British upper class wants the freedom to abuse their lower class more and they sold this nonsense to them with a spiel about sovereignty.

Thank God the Brits have such a taste for irony. They'll be feasting on this one for the better part of a decade.

[Pfhreak]

Everyone, that is, except the people who have to live with the externalities that come with chasing efficiency.

Some of those places that are more efficient are more efficient because, hey, they don't regulate emissions. Or they don't have strict safety standards. Or they don't require employers to take care of injured workers.

Clearly, not everybody is a winner.

[ACow_Adonis]

It's pretty relevant when significant portions of the no vote live in non-London areas and have general hopes (fantasies?) about jobs (such as farming and manufacturing) returning to the UK.

The world is not a first year economics class on comparative advantage.