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Let’s not get silly about trade and Brexit

Summary:
A report that we might be getting into a trade war:The import of European mineral water and several food products into Britain could be restricted under retaliatory measures being considered by ministers over Brussels' refusal to end its blockade on UK shellfish. The Telegraph can disclose that ministers are looking at proposals dubbed "Water Wars" which could see the UK end a number of continuity arrangements it has agreed with the EU.Senior Government sources pointed to potential restrictions on the import of mineral water and seed potatoes, the latter of which the EU has secured a temporary agreement on until the end of June.In a warning shot to Brussels, a Government source said: “There is thought being given to where we can leverage in other areas. We have continuity arrangements...

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A report that we might be getting into a trade war:

The import of European mineral water and several food products into Britain could be restricted under retaliatory measures being considered by ministers over Brussels' refusal to end its blockade on UK shellfish.

The Telegraph can disclose that ministers are looking at proposals dubbed "Water Wars" which could see the UK end a number of continuity arrangements it has agreed with the EU.

Senior Government sources pointed to potential restrictions on the import of mineral water and seed potatoes, the latter of which the EU has secured a temporary agreement on until the end of June.

In a warning shot to Brussels, a Government source said: “There is thought being given to where we can leverage in other areas. We have continuity arrangements... we can stop these which means they won’t be able to sell their produce here.”

This is not just silly it is insane.

The value of trade is that we get to consume those lovely things made better, cheaper, faster, by Johnny Foreigner. Exports are merely the work we do to be able to afford them.

So, J. Foreigner decides not to eat our shellfish. Oh Well, Oh Dear, they are now without our lovely shellfish. To turn around and insist that therefore we will punish ourselves by not having their mineral water, or their seed potatoes, is that more than silly it is insane. Why are we punishing ourselves for their actions in denying themselves?

As the late, great, Joan Robinson pointed out:

Even if your trading partner dumps rocks into his harbor to obstruct arriving cargo ships, you do not make yourself better off by dumping rocks into your own harbor.

Do we want seed potatoes? Given that we like growing potatoes the answer is yes, obviously we do. So, why would we ban ourselves from gaining our seed potatoes from the best supplier? That Mr. Foreigner is barred from eating our shellfish is an entire irrelevance to the truth of this proposition and therefore an irrelevance to the decision.

Come along now people we’ve known this about trade for centuries now - it’s the imports that are the point. So why is anyone even dreaming of making this mistake?

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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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