I’ve made no secret of the fact that we need to be very careful when listening to the media. An article popped up in my feed today which is a great example.
This article comes from GB News, a right-leaning channel in the UK. Very much a pro-Brexit channel.
The article is at https://www.gbnews.com/news/britain-trade-deal-brexit-peru, though you may find it behind a paywall. To quickly summarise, it explains how the UK has been granted access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is a trading bloc of Asian and Pacific-rim nations. It consists of the following 11 nations currently: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The article proudly announces that the CPTPP has a collective population of 590 million people, which they specify as 31% more than the EU trading bloc that the UK left following Brexit.
That sounds impressive, doesn’t it? More potential people to sell to means it’s a great triumph surely and vindicates leaving the EU.
Not necessarily. Time for some common sense.
Let’s ignore the fact that someone in the UK could drive a van to deliver to a customer in the EU without needing to load up on a boat or plane if they wanted. While it would be possible to drive to Vietnam, Malaysia and Singapore without requiring a boat or plane, it’s a much greater distance to travel. And that’s one immediate downside to joining a trading bloc on the other side of the world. The logistics of delivering physical goods is much more complex, with the additional downside of increased emissions contributing to global warming.
Anyway, let’s focus on the side of the story GB News hasn’t shared.
While the CPTPP has a larger population than the EU, that’s not the most important figure. What’s more important is how much money the bloc has. According to Wikipedia, the combined GDP of the 11 nations is about US$13.5 trillion or just over £10 trillion.1
The combined GDP of the EU is estimated at US$19.35 trillion or £14.67 trillion.2
So despite the new trading bloc being larger in terms of people, the economy is rather smaller than the EU. In fact, the EU economy is almost 45% larger.
And if we consider the GDP per capita, the EU has a figure of about £32,294 vs some £17,288.
So the GDP per capita of the EU is more that 86% higher than the CPTPP. That means that every potential customer in the EU has 86% more money to spend on average than a potential customer in the CPTPP.
Even disregarding the increased costs and complexities of delivering goods to the other side of the world, when you look at the important figures rather than the pretty ones, does the deal still look like a great improvement over what the UK had with the EU?
Or does it look like GB News was applying lipstick to a pig?
If the latter, why do you think that happened?
It is possible that the person who wrote it just isn’t very bright and didn’t have the smarts to think it through more than superficially.
However, it’s also possible that the channel’s biases are responsible and being a pro-Brexit business, they chose to use figures that made a backward step in terms of trade look like a step forward instead.