Tuesday, November 20, 2012

The direction of free trade


In 1907 Parliament once again concerned itself with problems arising from the competition between butter & margarine – a longish Act with 14 separate sections.

Manufacturers of margarine had to gain approval from the Board of Agriculture & Fisheries for the names under which their products were marketed. The new Act barred the approval of any such name which ‘refers to or is suggestive of butter or anything connected with the dairy industry.’

These days it is often popularly supposed that regulations about the straightness of bananas, or the re-definition of carrot as a fruit for the purpose of jam making, are dreamed up in Brussels by over-paid busybodies who have nothing better to do. We want free trade, they say, but not this nonsense.

Trade is not fettered solely by the imposition of import duties. What could be more limiting than governments deciding by what name you may call your wonderful product?

I am old enough to remember the fuss about jam in the 1960s; the mothers of England complained that some of the stuff sold in the shops, bearing the label of strawberry jam, was nothing more than water, pectin, sugar, dye & artificial flavouring.

Strawberry jam ought to have strawberries in it. And so it came to pass – anything sold as jam had to contain a certain minimum proportion of fruit. Brussels had nothing to do with it.

Other countries may well have their own rules, so we can hardly have free trade in Europe if I can’t sell my jam in Germany, & Portugal cannot sell theirs in Spain, & some countries cannot sell there own jam even at home. So, in due course, the rules get harmonised, we have a plethora of products called not jam but conserve, preserve, or spread. And yes, Brussels says carrot is a fruit.

There’s nothing modern about government stepping in to control trade in all sorts of ways, not just through the imposition of protective duties.

We don’t complain so much about governments keeping tight grip on the control of weights & measures, what we are allowed to call a yard, a pound, a gramme or a litre. At about the same time as Parliament was bringing in yet more laws to control margarine, it also passed one to legalise the use of the traditional Scottish measures of cran & quarter-cran for the trading of fresh herring in England & Wales.

Most of all, for most of the time, we rely on government to control the value of the currency

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