I see the Government is boasting about what a great trade deal it is about to sign with New Zealand, while at the same time ignoring the border problems, red tape and VAT that is hitting UK trade with the EU. Which made me go back and look at the Treasury’s 2018 economic analysis of what a FTA with the EU would mean for the UK.
The basic figures are: Non Tariff Barriers (red tape, checks at the border etc) will cost the UK 5.1% of GDP, new FTA’s with the likes of NZ will add just 0.1% to growth and regulatory flexibility will also add just 0.1%, so the total hit is minus 4.9%. Also the Treasury calculated the hit of no more net immigration from the EEA, which added another 1.7% hit to UK’s economy.
Why all this needs re-calculating is fairly obvious. We do not know if the FTA the UK negotiated is better or worse than the model the Treasury used, but since Brexit was an ideologically driven exercise it seems unlikely to be better. Nor do we know if Non Tariff Barriers are worse or better than the model the Treasury used, although they do look bad. Did for instance the Treasury model really take into account firms who just stop trading with the EU because the game is not worth the candle or Mastercard hiking transaction fees for EU purchases? Also there seems to have been a staggering fall in net immigration from the EEA, which will need taking into account.
When can we expect the new calculations of the consequences of Brexit? Well, so far the very suggestion has apparently been blocked by ministers. Which makes you wonder, if this is a triumph, if the UK is going to “prosper mightily”, if Global Britain is headed for the sunlight uplands; why not just show us the figures?
https://jonty.substack.com/
If you have a good new story and bad news story which one sets you in a good light and which a bad one - nough said! Buying good quality New Zealand wine is a start. As you show (& I don't dispute your maths) buying from NZ isn't a major thing when compared to the EU but there are many expats in NZ who may want to nostalgically buy British label products at better prices so hopefully although only a small improvement on that front it is better than the current kick in the teeth from the EU (which we expected to come). It will take time to refocus on new opportunities for our goods and services. When we joined the EEC we lost business opportunities with New Zealand so it is a game of swings and roundabouts. At least our traders are out there trying to get profitable business. I actually think this refresh will sharpen up our understanding about what customers want.