image caption: Gurmukh Singh OBE

BREXIT: Understanding Large Trading Blocks

  BREXT (Britain leaving the European Union) will be damaging for the UK economy at least in the short to medium term. Some argue for or against leaving the EU on immigration grounds only. Perhaps this is the time to reflect on the whole concept of large trading blocks of countries protected by a common tariff - duties or customs imposed on imports or exports.

It starts as a special trade arrangement which allows free movement of goods, labour and capital. Laws, regulations, standards and specifications and financial systems are harmonised. Next steps follow with a common currency, security and defence systems and a super state begins to emerge. In this process, long-term global economic, social, political and environmental implications are hardly looked at. Many economic issues have political implications and vice versa. For example, trade is both, an economic and a political topic. Issues such as the environment, pollution and climate change etc fall under both, economics and politics.

Let us look at the underlying purpose of periodical World Trade Rounds which are meant to lower tariffs (taxes on imports) and help the economic growth of developing countries. World Trade Rounds are supposed to make it easier for developing countries to export their agricultural and other, usually labour-intensive, products to advanced countries. The idea is to agree fairer terms of trade so that the standard of living of all countries improves.

Against that, large trading blocks like the EU protected by common tariffs and large and richer internal markets, defeat that purpose. The disorganised poor countries are left out of such privileged and protected trading areas and their economic conditions get worse. The only way the vast majority next generations in these countries can improve their lot is by mass-migration to richer Western countries even at the risk of losing their lives.

Regarding public accountability, while we know the names of our local Members of Parliament and contact them with problems and complaints, very few people know the names of their local Members of European Parliament (MEP). There is hardly any accountability for what goes on at Brussels.

So, one can see how short and medium term advantages of large trading blocks like the EU are opposed to global objectives of a level trading field for all countries through free trade and non-discriminatory movement of people. In capitalist consumer driven economies there will always be this conflict between short term and longer term considerations.

Arrangements like the EU were only designed to get in, not to get out. That is one reason, why it is proving so difficult to untangle the mix of European and UK laws and other arrangements while the people are having second thoughts about transitional and even longer-term costs.

This short-term versus long-term conflict can be seen at every level. Within communities, most opportunists tend to see no further than short term personal gain or promotions. It will take a paradigm shift in human nature to move away from immediate personal greed to work towards a better global future for all humanity. BREXIT can be looked at from a global angle above immigration considerations only.

 

Gurmukh Singh OBE