Impact of Global Trade and Uneven Market Access on People’s Lives in the UK

Free trade within trade areas such as the EU has, in theory, been beneficial for some UK citizens.

In a tariff-free European Union, cars made in the UK have been exported for sale in mainland Europe for decades now, with few additional costs incurred (other than transport). Since 1993, non-European TNCs have viewed the UK as a manufacturing base for sales not just in Britain but in the entire EU - a region which is home to nearly half a billion people, most of them in car-owning households. As a result, many UK citizens have found work in car factories owned by Nissan or BMW.

Over time, the price paid per car has often fallen in real terms due to economies of scale (as the scale of output increases, the production price per unit falls, according to economic theory). As a result, prices per unit are lowered in a beneficial way for UK (and EU) customers.

With the prospect of the UK leaving the EU there is major debate whether it should remain part of the existing EU single-market in which goods move between member countries tariff-free. It is argued that if the UK wishes to maintain the free movement of goods it will have to accept free movement of people, and contribute payments to the EU. Should it not agree to these conditions, it is likely the UK will leave the single market and goods produced in the UK will have an import tax placed on them as they cross into the EU, making them more expensive, and the likelihood of a fall in sales.

There are other positive impacts of world trade for UK citizens too:

Cheap imported products from China and other EEs have benefited the typical UK high street consumer. The price of many electronic goods such as TVs and laptops has fallen markedly since the early 1990s as they have been increasingly produced in lower-cost locations.

In the UK, farmers’ incomes are protected. One estimate suggests that the world’s richest countries, including the UK, spend around £150 billion each year subsidising their own farmers. Every cow raised in the EU currently receives a large subsidy each year. This has the knock-on effect of reducing the price UK supermarkets are prepared to pay to farmers in other countries for their meat and vegetables. As a result, UK consumers are able to buy extremely cheap food imported from a wide range of countries.

Although Fairtrade is more expensive to buy, many UK shoppers choose to embrace it. Buying Fairtrade goods lets shoppers know that what they spend is finding its way into the wages of poor workers in developing countries. Becoming part of an ethical value chain is important for a growing number of UK citizens who care about world issues.