Thursday, September 22, 2011

Even a free trade area does not allow "polyamory" in trade, does it?

The other day I was having a discussion on current affairs and dynamics in Europe and the world with an economist friend. Mind you, yours truly is not an economist but an MBA with 2 more degrees (a BS and an MS in decision sciences).

During the discussion the topic of "customs unions" and "free trade areas" came up. My friend gave me a POV that has proved valuable food for thought: He argued that a customs union between let's say countries A, B and C, implies a clear intent by these three countries to trade primarily between them as opposed to a global scope in trade.

If that is true of a customs union (which is what the UK claims it joined in the 1973 EEC), a "common market" as my 50s plus barber in Brussels called the EEC back in 1992, then that is even more true of a "Single Market" (launched on 1/1/1993).

What does all this mean?

That members of the current EU, the Eurozone, even those who claim they openly want a "free trade area" Europe (UK Tories etc), have to de juris accept that all these are not compatible with a multi-lateral global free trade system (WTO, ex-GATT), that members of non only the EU but also EFTA, ASEAN, Mercosur and the emerging UNASUR must have, explicitly or at least implicitly, the will and view of trading mostly (to say the least) with their partners!

And what is more, if they do not, then they should not be a member of any such entity and rely exclusively on the WTO membership.

Thus:

a) If the UK does not want to export and import mostly within the EU27 Single Market, then it has no place in the EU
b) If Germany sees China and Russia as its key trade partners from now on, then it too has no place in the EU or its Eurozone.
and so on!

Thus, if my economist friend is right, membership in the EU or even as its old EEC or "common market" form presupposes a commitment to trade with mostly the other members (at the expense of global (WTO etc) trade).

Consider that!

No comments:

Post a Comment

Hi there,

Feel free to comment.
Only suitable comments will be posted.
In EN, FR, GR, D, IT, SP, NL only (Use Google Translate otherwise SVP).

Thanks.
BRs
Nick

Share/Bookmark