Most Favoured Nation: Trade Envoys (£)

Make me the trade envoy to Antigua, thanks. Also some space.

Welcome to the 58th edition of Most Favoured Nation. The full post is for paid subscribers only, but if you want to read the whole thing [which you should, it’s good] you can sign up for a free trial below.

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Resignation Station

You might have noticed that British politics has been in free fall for the last week or so. The Prime Minister has resigned, following a series of scandals and the subsequent resignation of senior cabinet officials.

Amidst the many many resignations, were a number of so-called ‘trade envoys’. Which led the good people of twitter to ask me “Sam, what the hell is a trade envoy and why have we never heard of them before?”

Richard Graham @RichardGrahamUK

I resigned, after serving three Prime Ministers for 10 years as their Trade Envoy, earlier this morning. Trust is everything. To all my friends in Indonesia, Malaysia, the Philippines, more widely across ASEAN & in our missions there FCDO/DIT here simply an enormous thank you

And the answer is: “it depends and you are not alone.”

Officially, trade envoys are part of the UK’s trade promotion function. MPs and Lords are assigned a country or region, and they then go over there and promote the hell out of the UK, telling everyone how great our products and services are and why it is an excellent place to invest.

Richard Graham MP [above], was generally regarded as a good example of how to trade envoy well, for example.

Trade envoys are not even necessarily members of the ruling party. For example, of the current 33 trade envoys, Labour’s Stephen Timms and Rushanara Ali stand out as the trade envoys to Switzerland/Liechtenstein and Bangladesh, respectively.

BUT, for Tory MPs, being made a trade envoy also comes with strings attached. It means you have to vote with the government, despite not actually being on the government payroll (trade envoys don’t get paid).

Making MPs (of your own party) trade envoys is thus a useful way to put annoying MPs on a leash (*cough* the trade envoy to Mongolia), and/or reward people for loyalty by giving them somewhere cool and exciting to visit.

Anyhow, all of this is to say that if the next PM would like to make me a non-MP trade envoy [surely it could be a thing?] to Antigua or somewhere like that, I’d consider it.

Downside: I won’t vote for anything in the Commons.

Upside: I won’t resign when you do something silly.

… think about it.

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trade in SPACE

In 1978, Paul Krugman (yes, *the* Paul Krugman) wrote a, slightly tongue-in-cheek, paper called the ‘The Theory of Interstellar Trade’.

This is pretty well known among economist-types, but I’m not sure it has fully reached the trade policy community. And given 99% of you are massive nerds – the Venn diagram of “people who read sci-fi/fantasy novels as a kid … and still do now” and “people who love trade policy” is pretty much a perfect circle – I thought you might appreciate it.

The main issue he identifies is that the transit time, when shipping goods between solar systems will be incredibly long — probably hundreds of years. But due to relativity, or something like that, the time spent in transit will surely be experienced differently by people on the ship carrying the cargo, and people on Earth and/or other planets.

And given interstellar trade is ultimately an investment project, how do you work out if the trade will be profitable or not? What’s the appropriate discount rate? Whose “time” should you use when trying to determine the present value of the trade?

The second feature of interstellar transactions cannot be so easily dealt with (physicists are not as tolerant as economists of the practice of assuming difficulties away). If trading space vessels move at high velocities, we can no longer have an unambiguous measure of the time taken in transit. The time taken by the spacecraft to make a round trip will appear less to an observer on the craft that to one remaining on Earth. Since an interstellar voyage is an investment project which must have a positive present value there is obviously a problem in deciding which transit time to use in the present value calculation.

Anyway, it’s very good.