Ben Judah@b_judah
Coming back at this now I’ve had a bit more time because Brexit scrutiny matters.
What we are seeing here is three things.
1️⃣ With the dismissing mention of the “Rotterdam effect” we see an attempt to deny 🇳🇱 is a highly successful and more trade intensive economy than the 🇬🇧 with similar profile in tech, finance and services.
This is the home of amazing companies like ASML, which makes advanced chips possible, Adyen, the $57 billion fin tech standout, the banking giant ING, or the outstanding NXP semiconductors. This is truly an economy look at for inspiration.
Thanks to these incredible companies you can remove the entire Rotterdam and effect and still the 🇳🇱 economy is more trade intensive than the 🇬🇧 one. 🇳🇱 export earnings, which measure value accruing to their economy not passing through it at 35% of GDP compared to 27% for 🇬🇧. But it is crucial to the Brexit case to believe such an economy is impossible inside the 🇪🇺 — which is what we’re seeing here.
2️⃣ We are seeing an attempt to claim 🇬🇧 with a similar economic profile to the 🇳🇱 would not have tracked more closely with the 🇳🇱 than with 🇫🇷 or 🇩🇪. The graphic below shows this is demonstrably untrue. The 🇬🇧 actually grew faster than the 🇳🇱 1999-2015 but this lead has vanished since Brexit. The graphic also shows the 🇬🇧 traditionally has grown faster than 🇫🇷, 🇩🇪 and 🇮🇹 economies but our lead has either reduced, stagnated and only reversed in the case of 🇩🇪 suffering the very specific China and Russia shocks to its much larger manufacturing economy.
3️⃣ What we’ve seen in these Brexit arguments over the last few days is an attempt to deny recent 🇬🇧 economic history. We’ve not actually been in permanent stagnation: growth in 2014 was first in the G7 and in 2015 was second and on a positive trajectory. This was thrown off course by Brexit, due to losing access to the Single Market, and 🇳🇱 is a decent comparator of a similar though of course not identical economy that has flourished thanks to the Single Market. But not only. Brexit has failed to meaningfully open new markets compared to 🇪🇺. Not only are GDP gains over the long term new deals with 🇮🇳, 🇦🇺 and GCC deals minuscule — 🇪🇺 has now agreed deals with 🇦🇺 and 🇮🇳. 🇪🇺 of course already has deals with all the CPTPP countries that matter. This means the only new access we have is the new GCC deal adding 0.11% of GDP by 2036.
Bottom line 🇳🇱 has basically all the accesses have plus the whole 🇪🇺 and is doing better than us —but when we had access to 🇪🇺 like them we were overall growing faster than them.
