Edward Prescott on the benefits of the common market
01 Sep 2019 Leave a comment
in economic growth, economic history, Edward Prescott, industrial organisation, international economic law, labour economics, labour supply, law and economics, macroeconomics, Public Choice, rentseeking, survivor principle Tags: Common market, customs unions, preferential trade agreements
@JulieAnneGenter @NZGreens @LewisHoldenNZ @DanHannanMEP’s best single case for #Brexit
24 Jun 2016 Leave a comment
in constitutional political economy, economics, industrial organisation, international economic law, International law, liberalism Tags: Brexit, British economy, British politics, Common market, customs unions
Trading across Borders Doing Business ranking 2016 – high income OECD countries
30 May 2016 Leave a comment
in international economics Tags: Australia, British economy, Common market, customs unions, economics of borders, European Union, free trade areas, Germany
What did Australia do wrong to have the worst ranking of the high income countries for doing business across borders. New Zealand is not much better. The British are not benefiting as much as they could from the common market. Being in continental Europe must have advantages except if your Germany.
Can free trade agreements help solidify emerging democracies?
24 May 2016 Leave a comment
in constitutional political economy, defence economics, international economics, Public Choice, rentseeking Tags: autocracy, customs unions, emerging democracies, free trade agreements, military coups, preferential trading agreements
Source: “Free Trade Agreements and the Consolidation of Democracy” (April 2014) American Economic Journal: Macroeconomics. American Economic Association.
Actual and synthetic real per capita GDP and real per worker GDP in the 1973 EU enlargement
27 Apr 2016 Leave a comment
in economic history, international economics Tags: British economy, Common market, customs unions, Denmark, EU membership, European Union, Ireland
Prof Patrick Minford on the EU and trade
22 Mar 2016 Leave a comment
in economics, international economics Tags: British economy, British politics, Common market, customs unions, EU
Patrick Minford on why membership of the EU is hampering Britain’s trade with the wider world
19 Mar 2016 Leave a comment
in economics, international economics Tags: British economy, British politics, Common market, customs unions, EU
The explosion of lead in the saddlebags of trade agreements @KennedyGraham @DavidShearerMP #TPPANoWay
16 Mar 2016 Leave a comment
in economics of bureaucracy, international economic law, international economics, law and economics, politics - New Zealand, property rights, Public Choice, rentseeking Tags: crony capitalism, customs unions, free trade agreements, international investment law, investor state dispute settlement, preferential trading agreements
@toddmcclaymp #MFAT hasn’t heard of trade diversion? @DavidShearerMP #TPPANoWay @KennedyGraham
15 Mar 2016 Leave a comment
in economics of bureaucracy, international economics, politics - New Zealand, Public Choice, rentseeking Tags: customs unions, free trade agreements, preferential trading agreements, TPPA, trade creation, trade diversion
Trade diversion occurs when preferential trading agreements cause imports to shift from low cost countries to higher cost countries. Rather than gaining tariff revenue from inexpensive imports from world markets, a country may import expensive products from member countries but not gain any tariff revenue. An example of trade diversion is when Britain closed its doors to New Zealand agricultural exports after joining the common market.
Preferential trading agreements are trade agreements between countries in which they lower tariffs for each other but not for the rest of the world. The mass media mislabel them free trade agreements.
Under trade diversion, the partner country benefits from this change as an exporter, but the importing country loses due to this higher cost, as does the third country whose exports fall.
The loss to the importing country is not visible to consumers, who find the higher-cost product cheaper due to the absence of tariff. The country as a whole loses, with that loss being lost tariff revenue – lost to cover the cost of the higher cost imports from a member of the new preferential trading agreement.
It does not take much trade diversion to make a preferential trading agreement welfare reducing because of this switch to high cost producers.
The New Zealand Minister of Trade and the Ministry of Foreign Affairs and Trade did not discuss this major risk even from the simplest preferential trading agreement in recent policy analysis of the TPPA as my Official Information Act request has revealed. The term trade version does not appear in any of their analysis.
Adherents of the natural trading partner hypothesis argue that preferential trade agreements are more likely to improve welfare if participating countries already trade disproportionately with each other. Opponents of the hypothesis claim that the opposite is true: welfare gains are likely to be greater if participating countries trade less with each other. The powerful critique by Bhagwati and Panagariya (1996) is now widely accepted and one hears little justification of on preferential trading agreements on the grounds of the natural trading partners hypothesis
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