Monday 6 December 2021

Open trade v protectionsm

However much you read about Brexit, trade and our history with the EU over the past 70 years there are always things to remind you that you are only scratching the surface. Things you accepted were true often turn out to be wrong. Yesterday, on Twitter I noticed a thread by Steve Analyst about whether the EU was protectionist or not. This followed an article by Ryan Bourne, Chair in Public Understanding of Economics at the Cato Institute, advancing the general argument that Britain is inherently more in favour of free trade while the EU is more protectionist.

I had read the article before the Twitter thread and I confess I didn't question this basic assertion, but it turns out it's quite wrong.  This is the start of the Twitter thread:

Note that Mr Analyst (I don't think that's his real name btw) doesn't offer any evidence so I was initially sceptical but a quick search on Google and I first found this academic paper from 2006 showing a table with UK and EEC tariffs between 1972 and 1979


We apparently had lower tariffs on food but higher tariffs on a lot of other things as you can see from the table. In fact, in most areas we had higher tariffs than the EEC. Steve Analyst says, "When the UK joined the EEC it had an average higher tariff than that of the Common External Tariff (CET) of the six. That should come as no surprise, the UK had *always* had an average tariff higher than that of the EEC."

To go back further, I found another paper from the US National Bureau of Economic Research giving trade weighted average tariff levels between 1929 and 1964. Britain, virtually throughout the whole 35 year period, is the highest of all and in 1964 at 36% was way above everybody else - even India!  France is at 22%, Netherlands is a 6% and Norway at 3%. Germany (not shown below but in another table) was at 5%.

The paper was prepared to look at the general global level of tariffs before the talks began in 1947 between GATT participants to reduce them.


So, far from being champions of free trade before we joined the EEC, the UK was one of if not THE most protectionist country of all.  We had a huge empire which (I assume) was able to take UK goods tariff free while we sat behind a high tariff wall.

From now on, whenever you see someone suggest the EU is protectionist, you can tell them it's not true, at least not compared to the UK.