Trade, No Deal Brexit and Coronavirus

Brexit’s been off the agenda for some time now given the spread of coronavirus, but its impact on trade may still yet be felt. Particularly if we start to live in a world where global pandemics become more common.

The discussion surrounding trade and coronavirus appears to be in terms of us producing the necessary medical equipment (ventilators), and also being able to buy them – import them.

It seems crazy to think that should ventilators be available for export by another country and hence import to the UK, that trade wouldn’t take place – and it’s silly to think that import duties would be placed on such imports.

Nonetheless, it’s all couched in an “us vs them” narrative – they need us more than we need them (to sell to us, or to buy from us, depending on which angle suits). But trade isn’t about us vs them, it’s about what we can all do together. By doing what we do best and sharing, more is produced and we are all better off. By producing what the UK is best at, and trading for other goods, GDP is growth is higher and we’re all better off.

So┬áthe bigger point, really, is about trade more fundamentally. We talk about turning car manufacturing plants, brewery and distilleries into production plants for ventilators and hand sanitiser. But the principle of trade is that it does this for us – we produce the things we’re best at, and we trade them for the things we’re relatively less good at.

Sure, we can turn those plants into ventilator plants, but they’ll be less efficient at that than they would be at producing cars, or vacuum cleaners.

Trade suggests let’s let the medical manufacturers around the world produce the medical equipment, and let’s trade with them, selling them our Rolls Royce’s, our Jaguar’s, our Brewdog and our Dyson vacuum cleaners.

That’s the longer term principle with coronavirus. Clearly right now very little trade and spending at all is taking place, due to the nature of the global lockdown. But the way to be better prepared for the next pandemic isn’t to make sure we all produce the same things – the UK produces, France produces, Japan produces, the US produces, China produces. It’s for us to all produce what we’re best at, and trade with the country best at making ventilators.

That way we’re all rich enough to be able to afford to buy in those ventilators in sufficient capacity.