Sunday 18 December 2022

Non-tariff barriers are not just 'form filling'

Every so often you see something which makes you doubt whether some people in this country can ever be made to see sense.  Despite all the bad news coming out about Brexit, and right up to cabinet level there is talk of getting a closer relationship with the EU because things are so bad, in the minds of many leave voters it has either all been worth it or of no consequence. I noticed a Twitter spat about the loss of freedom of movement with a lot of Brexiters claiming we can still live, work, study, and travel in Europe. This is of course true, but it's not a legal right anymore and it takes longer, costs more and is a lot more cumbersome.

At one point, someone tweeted about a friend who wanted to work in Brussels which involved "a very long administrative palaver to get the work visa." They suggested (rightly) that it wasn't free movement and that EU citizens can set up in another member state much more easily. The tweet ended, "Friction destroys opportunity and reduces trade."

This is the response:

Just a bit of form-filling. All of the arguments over the last six years about non-tariff barriers have been reduced to some "form-filling."

This was yesterday but last week on Newsnight, the BBC spoke to a businessman who manufactured machines (I forget what kind - some sort of expensive, high-tech analytical devices) and had met a potential client from Croatia, at a continental exhibition I think.

The client showed a lot of interest and wanted more details. It began to look like a real prospect until the client asked, "where are you based."

This might seem an odd question to put to a Briton but in Europe, you find a lot of conversations are carried out in English and Northern Europeans are often absolutely fluent. Also, some EU firms employ British citizens anyway.  A Croat may not have realised what the businessman's nationality was.

However, as soon as he said, "in Britain" the client said he couldn't do business with him. It was I assume quite a surprise and the businessman asked why. "Too much trouble" was the answer.  What he meant was too much form-filling. He also perhaps understood that he as the importer would legally become liable for the product if anything went wrong. It would be far easier for him to source something inside the bloc.

I don't know if the Croatian client wanted a single machine or to become a distributor with perhaps dozens of sales in the years ahead, but the fact is that bit of form-filling meant a lost sale. Note this form-filling wasn't on the part of the exporter (although he would have had to do more as well) but on the importer. There are forms on both sides.

That lost sale would have produced wealth for this country, a job for somebody, tax for the exchequer, and perhaps better public services.

It's this idea that there is a bigger picture, that small amounts don't matter. That person who wanted to work in Brussels doesn't matter. Burden him with red tape, it doesn't matter.

The day we start to realise that like a formula one car, even the smallest reduction in drag or friction is a gain and if you make things harder for people they will go where it's easier to do business, is the day when Brexit starts to be seen for what it is - a disaster for trade.