[[{“value”:”The IMF estimates that Europe’s internal barriers are equivalent to a tariff of 45 per cent for manufacturing and 110 per cent for services. These effectively shrink the market in which European companies operate: trade across EU countries is less than half the level of trade across US states. And as activity shifts more towards
The post European Union fact of the day appeared first on Marginal REVOLUTION.”}]]
The IMF estimates that Europe’s internal barriers are equivalent to a tariff of 45 per cent for manufacturing and 110 per cent for services. These effectively shrink the market in which European companies operate: trade across EU countries is less than half the level of trade across US states. And as activity shifts more towards services, their overall drag on growth becomes worse…
Europe has been effectively raising tariffs within its borders and increasing regulation on a sector that makes up around 70 per cent of EU GDP.
This failure to lower internal barriers has also contributed to Europe’s unusually high trade openness. Since 1999, trade as a share of GDP has risen from 31 per cent to 55 per cent in the eurozone, whereas in China it rose from 34 per cent to 37 per cent and in the US from 23 per cent to just 25 per cent. This openness was an asset in a globalising world. But now it has become a vulnerability.
That is from Mario Draghi in the FT. Canada too! Even Trudeau is now saying there should be free trade across the provinces. I do appreciate the willingness of those political units to try to counter the Trump tariff proposals. But it would go better if they were themselves practitioners of free trade internally, never mind externally.
The post European Union fact of the day appeared first on Marginal REVOLUTION.
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