Ahead of its exit from the European Union, the UK is currently negotiating to secure free trade agreements with several countries, but what does this kind of deal actually mean?
When two countries agree to a free trade agreement, that does not normally mean the complete free movement of goods and services between their economies, with no taxes, quotas or barriers of any kind.
If you think about it that is pretty obvious, for instance in agriculture countries have subsidies for farmers, environmental rules, food standards and a dozen other policies.
To ensure free trade of agricultural products all those policies would have to be coordinated, if not exactly the same.
This is why the issue of chlorinated chicken is suddenly in the headlines; we don’t allow it, the Americans do.
It is a barrier to free trade and if we cannot agree on a compromise then any free trade deal between the US and UK will not fully cover trade in chickens.
The same can be said about genetically-modified (GM) crops, where America thinks the EU approvals process is far too complicated.
And what about agricultural subsidies for farmers?
You can be pretty sure farmers on both sides of any free trade deal will argue about whether the other side subsidises its farmers unfairly, well, until the cows come home.
It is not just agriculture that is affected, removing tariffs on manufactured goods is normally considered the easy part of any trade deal, but what about chemical regulations, car safety and drug testing, to name just three examples?
The reason that free trade deals involve years of talks, dozens of expert negotiators, and endless meetings on technical details is because such issues are very complicated and involve a host of issues.
In the end they tend to come down to a trade off.
The proposed free trade deal between the EU and Japan has, for example, been described as a “cars for cheese” deal.
It’s an over simplification, but the fact is a major part of the deal is that the EU will allow cars made in Japan to be sold in the EU more easily, and the Japanese will reduce tariffs on European cheeses (and other dairy products).
That doesn’t sound like much but it is important. Many Japanese carmakers have plants in Europe precisely because it used to be difficult for them to sell Japanese built cars there, as they had to pay a 10% tariff.
Meanwhile, the Japanese government has had some of the highest agricultural subsides, tariffs and other barriers, because it has long sought to protect its inefficient farmers.
Both sides will win easier access to each others markets, but it is still not totally free trade.
For instance some cheeses will be covered by quotas (a limit on how much can be exported to Japan), and car tariffs will take years to totally come down.
More from the BBC’s series taking an international perspective on trade:
Also non-tariff barriers are still an important factor in limiting trade.
So Japan and the UK, for instance, have different legal systems, educational qualifications, insurance rules, banking regulation and a thousand other differences.
As you will have spotted, many of the differences are not to do with manufactured goods, which can be relatively easy to sell in other markets and changed if necessary to comply with local rules, but they do hinder free trade in services.
In the UK services make up 80% of the economy so agreeing a free trade deal on services is very important.
It is however rather difficult for it to be total.
British lawyers are just not going to be allowed to work in Brazilian courts if they haven’t passed local exams and speak Portuguese, for example. Things such as insurance contracts have to abide by local laws and rules, while British plumbers may not get much work in China if their qualifications are not recognised.
But on top of that there are nearly always politically important sectors which can lobby national governments to continue to protect them.
India’s army of small retailers are well protected by politicians from foreign competition, or governments can demand the politically impossible.
As part of a future free trade deal, India would probably want the UK to open up immigration from India especially for students; something the government is unlikely to do as reducing immigration is one of its principle post Brexit policies.
It all means that free trade agreements do not necessarily cover everything.
Also although many economists believe such agreements encourage and increase trade between countries, improve efficiency and investment and help economies grow; others think they have serious downsides including driving out smaller local companies, reducing tax revenue and undercutting working conditions.
Whoever is right free trade agreements do not do what they say on the tin.
They do not make all trade free and frictionless; maybe they should be called “freer trade agreements”?
More From this publisher : HERE
If you like our content help us with a share… or two …
Also - I have some free stuff for you .......
Nr 1. In This FREE Report you can Discover:
Secrets to acquiring the freshest, hottest leads via YouTube In-Stream ads quickly and easily! Best secret tips for the most effective targeting for your ads! Totally legal, but little-known method for literally stealing traffic from your competitors! Get more traffic to your videos and landing pages without spending a fortune! And much more - all within this special FREE report!
Nr 2. Did you know you can Absolutely EXPLODE YOUR EMAIL LIST FOR FREE with UNTOUCHED offline sources?
Nr 3. The #1 secret to becoming an affiliate superstar - Earn your first $100 online – without a dime to invest.
If you’re still looking to “make it online – I have just the thing for you. It’s a video series that shows how to make your first $100 online – even if you don’t have a dime to invest. Yes – nothing. Free. Nada. Is this possible? You bet. It’s the most powerful system used by those “in the know”. Good things don’t have to be difficult. And they don’t only come to those who wait. Have A Look
Nr 4. Top 10 Email Marketing Mistakes. Which of these mistakes do you make?
Nr 5. You can learn about : The hottest social networking site that will send an unlimited stampede of traffic to your site - for FREE! How to quickly locate a swarm of hungry buyers using "information portals"! The fast and easy way to use simple images to siphon targeted traffic, on command! Learn how to get the most possible traffic from Instagram, and make sure that traffic converts! And much more ...
Nr 6. It’s no secret… Facebook is an incredible place to get tons of free, viral traffic. But… most people are going about it all wrong. How many of these mistakes are you making? Download the free report to find out.
Nr 7. Special free report . It's called "Operation Midas Touch" and you can download it here...
The report features a surefire method for generating at least $1000 per week online,without a website or product of your own!
Nr 8. Instagram is still one of the hottest ways to get a LOT of traffic fast. All by sharing images. Sounds easy enough, yeah? Well, yes and no. If you want to really start driving a lot of traffic and making sales using Instagram then you should download this report.
Nr 9. When it comes to creating a product online there are so many ways to approach it. Wouldn’t it be great to just get the meat of it all so you can get started faster? Well, the good news is, today you can download a guide called the Product Creation Formula Quickstart Guide. It’s as the title suggests - a Quickstart guide. You’ll get a list of action steps to take right away. Download your copy today !
Nr 10. Would you like to finally USE all of that dusty PLR you have sitting around on your harddrive? Or maybe find the resources for the best PLR available - at the best prices? What about how to use that PLR to make you money with just a few minutes of work. Well, you’re not going to want to miss this!
Nr 11. Buzzfeed’s top post has more than 21 million views. Think about that for a sec… ONE of their articles has had over 21 million people who have read it! And they have thousands of articles... what would you do with that kind of traffic? A friend of mine hacked their method and was able to use it to get 11,592 targeted new subscribers in 2 weeks on their very first attempt!
Nr 12. Push notifications are one of today's hottest trends in website traffic and conversions, and for good reason. Studies have shown that as many as 40% of people will opt-in for push notifications, which is about TEN TIMES the rate of people who opt-in for emails! That’s huge! Not only that, but they're also highly effective at pulling clicks, as well. Some studies have shown CTR at an average of around 40%, with highs of as much as 80%! Again, that’s huge!
Nr 13. Would you like to know how to get more money from the exact same number of website visitors you’re currently getting? Even if you’re website is getting as few as 1-2 visitors a day, this report will show you how to increase your profits using these few handy hacks.
Nr 14. People have now realised that it's not the size of the list which matters, it's the quality. ... and the only way to create a quality list is by launching your own products. Let it be $7 ebooks, $17 info products, $27 video training product or software's... all of these work. My good friend Kevin Fahey has is revealing how he's launched over 20 products in the past 4 years, many of them top sellers. Needless to say he's banked a handsome amount in this time.
Nr 15. Do you ever feel that the man you like or even love, just doesn't see you or desire you in way you want him to? Or... maybe you're able to get a man's attention though not the right kind of attention? Or... maybe you're still single because you wait and wait for men to approach you first? What you may not know is that the way we flirt will either attract the "wrong" man for us or the "right" man.
Nr 16. When it comes to getting sales and leads online, there is ONE thing that 95% of marketers use... it's called a LIST. My friend Jimmy just released a free book that explains WHY a list is important and how YOU can build your own list. It's available right here (and it won't cost you a penny)
Nr 17. If you have tried everything, and still aren't able to get your Ex back, then you need to pay attention.
Nr 18. What if I told you that you could make ANY woman WANT to do ANYTHING for you? Would you think I'm crazy? Well... what If I told you that you could also make her LOVE every minute of it and come back for more?
Nr 19. I have a special free plugin for you today. It's called "Covert Hover Mini"
This plugin will triple your blog traffic by compelling your visitors to share your images on social media. This is some really clever stuff and it works like a charm. After you grab your free plugin, don't forget to read the free bonus report as it will show exactly how and why this strategy works like crazy.
Nr 20. The days of being able to get away with a basic WP theme and a pic or two are gone, your site needs to look good. Even Google are looking for you to have engaging graphics on your site. But getting good quality graphics made for your site is a pain, AND it will cost you both time and money (if you outsource it). But I have a special free download for you today. A virtual treasure chest of over 21K profit pulling graphics you can start sing today to generate more traffic & sales!
Nr 21. 20 professional full HD background videos. These background videos are perfect for giving your videos that extra kick they need to stand out from the crowd Oh yeah they are in full 1080p HD too, I hope you'll enjoy them.
Nr 23. No doubt, you've seen all of the video launches lately! There is a reason for it... Video marketing is a GREAT way to make money, and with the recent creation tools making it super accessable for anyone to get started... It's no surprise that more people are making videos. However... there is a missing element to most video marketing products...
Nr 24. For the first time ever... You can get the straight scoop on how someone is selling over $1,000,000/year of t-shirts on Facebook!Use them .... and have fun !