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A small note on level playing fields

Summary:
It appears that the Brexit negotiations - or rather, that having already happened, those on what the trading relationship should be now that it has - are hitting a roadblock, this insistence upon a level playing field. At the end of the third round of talks between Brussels and the UK, David Frost, Britain’s chief Brexit negotiator, said discussions had stalled because of disagreements over the EU’s demands on the so-called level playing field.In slightly more detail:Following a week of talks conducted by video conference, the major stumbling block is over the EU demands requiring the UK to apply similar standards to the EU on areas such as the environment and labour law even after Britain’s standstill transition period expires at the end of this year.The Commons Library has a nice

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It appears that the Brexit negotiations - or rather, that having already happened, those on what the trading relationship should be now that it has - are hitting a roadblock, this insistence upon a level playing field.

At the end of the third round of talks between Brussels and the UK, David Frost, Britain’s chief Brexit negotiator, said discussions had stalled because of disagreements over the EU’s demands on the so-called level playing field.

In slightly more detail:


Following a week of talks conducted by video conference, the major stumbling block is over the EU demands requiring the UK to apply similar standards to the EU on areas such as the environment and labour law even after Britain’s standstill transition period expires at the end of this year.

The Commons Library has a nice explainer of the issues here.

The essential demand being that there are rules about how things may be done. In order to have free trade all must be using those same rules. This being that level playing field and this also being an entirely incorrect insistence. For trade, market activity, can and should be trade across different ways of doing things.

For example, it is possible to make bread from rye, from barley and from wheat. A set of rules that insisted that only bread made from wheat could be bought or sold would not be a free market. It would also make us poorer, depriving us of the rye and barley varieties. This is obvious.

But this is also true of things made using different labour laws, or different environmental regulations. Or, to use an example currently in the news, different methods of attempting to reduce food poisoning from chicken meat. We can imagine trying to keep the entire growing chain free from, say, salmonella. We can also imagine trying to clean the meat once butchered. Either might work, either might not. This being one of the functions of a market, of trade, to work out which produces the greater utility for the consumer. One method might be the cheaper one of producing that consumer utility, chicken to eat without being poisoned.

A level playing field in that there’s the same punishment for poisoning the consumer makes that market work better. A level playing field in the insistence that chlorine washed is not OK makes it work worse - for we’ve now not got a level playing field in methods of producing that consumer utility.

That is, the insistence on the one side on this “level playing field” is an insistence on the wrong kind of it. An insistence upon the same broad brush outlines of outcome, don’t poison the customers, is fair enough as not poisoning people is an entirely reasonable goal of public policy. An insistence upon the same rules of how we get there isn’t. Because, quite obviously, there are many different methods of not poisoning people and one of the aims and benefits of a market economy, of competition, is the trial of all of those different manners of achieving the goal through that trial and error. And may the best method win - this being the point of the exercise, to find out.

It is not necessary - indeed it kills off one of the major benefits of competition - to have a level playing field in methods and modes of production. Therefore we shouldn’t have such either. Which does rather neatly deal with this impasse in the negotiations. Given that our very aim here is to have free trade, that variety in production methods, we don’t want to have an agreement anyway, do we? Not if they’re insisting we can’t have the very point of having free markets in the first place.




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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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