UK's Impending Regulatory Trap and Milton Friedman's Warning

I first wrote to Milton Friedman as a high school teenager in the late 1980s. A letter composed on a Commodore 64 and produced via dot matrix printer. He replied. We corresponded for nearly two decades.

From our exchanges, I learned to think about economics the way Friedman did. One principle is particularly relevant today: surrendering control over your nation's economic rules can look cheap when you gain immediate trade benefits. The bill arrives years later—when changing course has become virtually economically and politically impossible.

In the 1990s, as the European Union took shape, Friedman warned that Europe had "thrown away that adjustment mechanism": the regulatory flexibility necessary to adapt when unified rules proved costly.

Thirty-plus years later, the same dynamic is playing out. The United Kingdom is negotiating with the European Union to align sanitary and phytosanitary (SPS) rules. The UK government estimates the broader May 2025 UK-EU package, including carbon pricing and other elements, could add nearly £9 billion to the economy by 2040, in part by eliminating export health certificates, plant-health certificates, and other border bureaucracy.