So a trade deficit is not a problem, so using your logic therefore a surplus is not an advantage either, strange world. We currently run a surplus with non EU trade, trade which is already higher than that with the EU. The chart indicates those countries who have the most to lose, if no deal is put in place or if we go to WTO rules. My second point was that the EU have gained a surplus from the year 2000 of over £641Bn in trading with the U.K. and we paid in over £200Bn for the pleasure. We have a once in a lifetime opportunity to escape this sclerotic straightjacket and spend our time and energies developing new opportunities, without having 27 other countries having a vote on it, while the EU can get used to the fact that we will be their largest export market in the world and perhaps they may wish it to continue in a sensible manner....
I still wonder if you can answer my questions. Why are trade deficits necessarily bad, and how on earth will leaving the EU address this?
You seem to be thinking about this like an imperial-age mercantilist. The world hasn't worked that way for a long time.
Essentially: Trade surplus = you trade goods and services you produce for someone else's pieces of paper
Trade deficit = you trade pieces of paper for the goods and services someone else produces
You have a 100% trade deficit with your grocery store... but since this enables you to survive, it is obviously not a bad thing.
Similarly, Britain is a small, cold, and relatively remote island. If it no longer imported items from the rest of the world, it would be a truly miserable place to live. The standard of living would drop tremendously. The ability to instead access French wine, German cars and machinery, Spanish and Italian foods etc, is clearly not a bad thing.
A trade surplus, meanwhile, necessarily results in lower external consumption - ie: lower material well-bring . Germany's trade surplus is partly because demand for top-quality German products is high,
but also because of German labour reforms and tight-monetary efforts, which make it more difficult for Germans to consume products from abroad.
Britain produces less of what EU countries want to consume than Germany does, but this has nothing to do with its EU membership, and everything to do with decades of terrible industrial policy, mostly under Thatcher. Leaving the EU will do very little to address this.
And anyhow, before Brexit, the ability to import the EU items which people enjoy was never a problem because of the UK's corresponding stronger currency. By destroying the value of the Pound, all that Brexit is doing is making the EU items which people enjoy, and which raise our material standard of living, and for which the UK has no domestic alternatives, less accessible. "
Shrinkflation," to use one of the lazy portmanteaus that define our stupid times.
Meanwhile, as you yourself point out, the trade deficit has reached historic proportions, and it only continues to grow, despite the collapse of the Pound which lowers the cost of UK goods for European consumers.
In short, in the age of floating currency exchange rates, a trade deficit can be but is not necessarily a bad thing - the US has one, Canada has one, Australia has one, France has one, and it was never a problem for Britain until Brexit - and in any case, if it were a problem, Brexit would only compound this rather than solve it.
Awaiting your rant in response about something completely unrelated, taken out of context, which will make me regret the time it took attempting to explain all this...
