A few of my favourite things

Shoes and Trade!

It seems that Clarks shoes have finally felt the sting of the harmful and economically backward decision by arch numpty Peter Mandelson:

Profits at C&J Clark, the family-controlled shoe company, fell last year after the EU imposed tariffs on shoes imported from China and Vietnam.

CandJ Clark's profits fell last year as a result of EU imposed tariffs on shoes imported from China and Vietnam.

Turnover at the company, which owns Clarks, Britain's largest shoe retailer, rose from £920.6m to £972.7m in the year to January 31 2007, but pre-tax profits slipped from £71.9m to £69.4m, according to accounts filed at Companies House.

In his statement to shareholders Peter Davies, chairman, said that the "politically inspired decision to impose anti-dumping duties on footwear imports from China and Vietnam" had cost the group £4.8m and warned that it was likely to cost a further £13m this year.

As I have written before, the decision by the EU to impose tariffs on shoes coming from China and Vietnam was nothing but a politically motivated decision designed to appease the countries in Europe who have not, and do not plan to, adapt to globalisation.

What was particularly stupid about this decision was that the European Commission team went to Brazil to decide whether or not China and Vietnam were engaged in anti competitive practises.
The GDP per capita in China is $8600
The GDP per capita in Vietnam is $7600
The GDP per capita in Brazil is $3100

So they aren't exactly identical now, are they. What's more, with the sheer numbers of people, particularly in China, their wages are much lower. Now, whilst not paying workers very much might cause a huge tizz amongst the bleeding heart socialists, in order for countries to develop and get rich, they take advantage of the resources they have in abundance. If poor countries develop then yes, the rich get rich first, and then there's a trickle down effect. If you have a look at the Kuznets curve we see that inequality rises initially when there is a switch away from primary products markets to the secondary sector.

There was no real reason for these protectionist barriers to free trade to be imposed on Chinese and Vietnamese exports, apart from countries such as Italy, Spain and Portugal not being able to compete with them, because they like the over regulated, union driven markets which the EU holds in such high regard. And as a consequence, British firms and consumers have suffered.

As Nigel Farage MEP said to Commissioner Mandelson:

How can 25 countries have one single trade policy? One size does not fit all, whether it is trade policy or shoe sizes.

Quite. It doesn't. We are the world's third largest trading nation, and it is outrageous that we don't have UK representation at the WTO.

So, can we leave yet?

Yes another one

A little bird has told me about a certain Tory MEP who has a reputation of being eurosceptic saying something quite different from that reputation.

Conservative MEP for the South East region Nirj Deva was at a dinner the other evening making a speech about how we can all make the EU 'the leading knowledge based economy in the world.'

'ello, 'ello...what about the UK as an economy, or have we all gone into Euroland without realising? And even the Commission wouldn't be so dumb as to think that the EU could be so successful. One of their high profile attempts to make the EU in any way efficient and business friendly, the Lisbon Agenda, has been such a failure they keep on having to relaunch it: which is as close as you get to an admission of failure in the EU.

Not only that, but the poor chap seems to think that the partnership agreement between the EU and India is a good thing. He appears to be conveniently ignoring the fact that we as a country should be having our own trade policy and is rather keen on Peter Mandelson being in control.

I would have thought that it would have been better for the UK to lead the way with trade agreements with India. After all, they are a former colony and are ideal partners for us in global trading. As the third largest trading nation we should be fully embracing free trade with the anglosphere and ACP countries as soon as we possibly can, and when the rest of the world catches up with this rather jolly idea which increases global parity, they can jump on board too.

Let's not get tied down with bureaucracy and the economically illiterate, because no one will benefit: indeed, everyone will suffer.

Comic relief: I'm not laughing

I wrote some time ago about the pointlessness of Fair Trade juice: how, essentially, it is just a convenient way for the bleeding heart brigade to feel good about developing world poverty without actually having to do anything.

We are used to hearing about the hypocrisy of the EU: Glenys Kinnock and the Development committee cantering in on their white horses, promising to eradicate global poverty by next Thursday if we all attend their cheese-dip reception for 'lesbian equality officers in Africa'...

The parliament itself has now found one way of combating this imbalance by selling Oxfam 'fair trade' juice in its subsidised cafeteria. If I was a dairy farmer in the developing world, trying to survive when EU and US dairy subsidies keep world prices 34% lower than they should be, I would be grateful that three people a week were buying my products rather than getting to the crux of the issue.

More recently, my delight in finding some lovely sun blushed tomatoes which don't actually taste like bits of carpet someone has spilt tomato puree on has been hampered by a patronising little addition to the label informing me that 10p from every 'special pack' is being donated to Comic Relief.*

I've never been much of a fan of Comic Relief. When I was growing up, my father used to rage at the TV saying something along the lines of 'why don't they just put a load of guns in a boat and ship them over to Africa? ' in an effort to highlight that a countries torn apart by war are never going to develop either economically or socially.

That apart, if we really want to help the developing world, 10p from my overpriced culinary knick knacks isn't going to do much good.

I don't know how many times people actually have to say this, but if you want to help alleviate poverty, there's a rather handy trick you can employ.

FREE TRADE.

It increases global parity. It allows countries to specialise in what they have either an absolute or a comparative advantage in, thus making global production both more productively and allocatively more efficient and shifting the global productivity curve out to the right. Everyone gets richer, albeit some at different rates to others.

And yet, we in the UK are still part of this hideous monster known as the European Union. A statist organisation which allows countries not to develop and adapt to globalisation, but instead gives them money when they are inefficient.

As I have written before,

Trading blocs are bad. They encourage protectionism and, particularly when they become political, non tariff barriers which people can't immediately see unless they are embroiled in the technical details of trade negotiations. We don't want retarded trade blocs, we want free international trade which exploits comparative and absolute advantage, shifts that global production possibility curve a large wedge to the right and which increases global parity. This does not happen with tariff barriers on shoes and health and safety rules imposed on barely above subsistence level farmers in Africa.

So all you people who are going to fanny around with your red noses, slapping yourselves on the back for being so caring and so thoughtful and really thinking that you are doing your bit to help out those less fortunate than yourselves, think again.

If you really want to do some good, help get the world's fifth largest trading nation out of the EU, back with their own seat at the WTO and leading the way in free trade. It made us rich when we did it unilaterally in the nineteenth century, and it can make us and everyone else who gets involved rich in the twenty first.

And there's a very simple way of doing that....

*Ironically, underneath this is the special offer price of '2 for £4' which does rather highlight the futility of the exercise.