What ordinary citizens should know about trade, tariffs and the Customs Union.

It seems we are all experts these days (Thanks, Leavers!).

Who would have thought that ordinary people, who a bit over two years ago had no inkling of tariffs, international trade, or free trade agreements, would become so knowledgeable about these things?

And even now, do we really know what we are talking about? People have the tendency to overestimate their personal knowledge of everyday phenomena. This is a well-established phenomenon in psychology, termed the illusion of explanatory depth.

In a typical experiment, people are asked to rate how well they would be able to explain some mechanism, for instance, how the tides work, how a helicopter goes up, how a zipper functions.

For example, try to rate, on a scale from 1 to 7, how well you would be able to explain how a helicopter works.

If you’re like most people, you’d give yourself a high rating, say 5 or more. But if you actually have to explain how it works... it would likely look more like the picture on the right than the picture on the left (credit: Frank Keil), maybe a 2 or a 3 at most.

Illusion of explanatory depth.

Nowadays, there is lots of discussion on the UK leaving the Customs Union.

To my best recollection, the Customs Union was not even a serious point of discussion during the lead up to the EU Referendum. Everyone went on about the Single Market, with Leavers like Daniel Hannan arguing the UK’s place in it was secure in the event of Brexit.

Screenshot of Daniel Hannan arguing that nobody is talking about threatening our place in the Single Market.

With threats of food shortages, medicine shortages, and chaos at the borders in the event of no deal, the Customs Union suddenly seems pretty significant. Even our own MPs, who are supposed to vote on a deal that includes customs arrangements don’t exactly know how it works (see the leaked WhatsApp messages by Nadine Dorries MP, below).

Nadine Dorries, not quite well informed about the Customs Union. (Buzzfeed)

Now try, for yourself, to explain how the Customs Union works, and how it affects trade deals. Try to explain why the Customs Union stops us from having separate, independent trade deals with non-EU countries. Try to work out the pluses and minuses of being in a large trading bloc. Like with the helicopter, unless you are an expert in international trade relations, your explanation will remain quite sketchy.

One might argue that Nadine Dorries ought to know, given that she represents her constituents in Parliament. What about the rest of us?

Here, the concept of cultural literacy comes in handy. E.D. Hirsh influentially defined cultural literacy this way, as “the background information required to read serious... newspapers and magazines with understanding.” (this definition can easily be expanded to encompass any sort of media, including online media).

Man reading a traditional newspaper. (Pixabay)

Our world has become very complex, and we have experts of various kinds working in their domain of expertise — they invent medicine, strike trade deals, teach children and young adults, code, engineer bridges, make art and games we enjoy.

Click here!!

It is impossible to reach a level of expertise in all those fields. But a responsible adult member of society does need a passing knowledge in many domains to navigate the world, and to exercise her democratic rights responsibly. This includes, for instance, knowledge of history (e.g., it is worrisome that many younger adults don’t know about the Holocaust), and it also requires some knowledge of our democratic institutions.

The Referendum has exposed how little UK citizens know about how the EU works. Many people don’t even realize that MEPs are democratically elected. That’s how we end up with MEPs like Nigel Farage — the Eurosceptics seem to be the only ones genuinely interested in the EU, because they want to destroy it.

Blue: EU member states. Light blue: Non-EU states participating in single market. Green: Participation in selected sectors of the Single Market.
Orange: Deep & comprehensive FTA with EU. Yellow: Bilateral customs union arrangement with EU.

The Customs Union and the Single Market were the two key instruments that the founding members of the European Economic Community proposed in the Treaty of Rome (1957), as instruments to make the EEC more economically and more politically integrated (see here for not-so-brief overview).

The Financial Times, whose audience are well-educated, relatively well-off people, provided a series of instructional videos, such as the one below. The Customs Union is explained in the first minute of that video. This is obviously very superficial, as knowledge goes about the Customs Union, and any expert in international trade relations could go on at length about it. But for us, as ordinary citizens, what is in the one minute would have been more information than most of us had (even people who are generally well-informed).

Financial Times’ Customs Union video.

Was there any interest in the specifics of the Customs Union when British citizens actually had a say on Brexit? To gauge this, I looked at the interest over time for ‘customs union’ on Google, filtering for searches in the UK only. This is a measure of relative interest, so 100 is highest, and 0 is lowest, and everything is measured in relation to that.

Google Trends interest in ‘Customs Union’ over time, from July 2014 to July 2018.

This is the period July 2014–2018. The line prior to the 2014 looked like the flatline you see in 2014 and 2015. The first little bump you see on this graph was on 24 June 2016, a day after the Referendum.

People have not now suddenly become experts on what the Customs Union is. Far from it. But knowledge comes in degrees — at least they now know there is such a thing as the Customs Union, that it’s distinct from the Single Market, that it has something to do with international trade and that leaving it would spell severe difficulties because of customs checks.

As analogy with the helicopter, your present knowledge of the Customs Union might be that picture on the right, you are aware there is such a thing as helicopters, and they lift off, and they have rotor blades that somehow make them go up. But your knowledge of the Customs Union prior to 2017 or so would be like not knowing there are helicopters, and having no clue what they are for.

In the question of whether there should be a People’s Vote, it still seems that this is a significant factor. Once we know what the deal looks like, to understand its full implications you would still need to be an expert on international trade relations. But at least the public would be in some position to make a judgment about it, unlike on 23 June 2016, when the Customs Union and so many other essential aspects of the EU were not even under discussion.🔷

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(This piece was originally published on The Blog!)

(Cover: Unsplash/Patrick Tomasso.)