It isn't us having access to their market, it's their having access to our services

If we start out by thinking that trade is all about what we can export we’re going to get into such terrible trouble. A logical fallacy as a base assumption is going to lead to gross error after all.

The point of trade is to gain access to those things that Johnny Foreigner does better, cheaper, faster, shinier, than we are able to do ourselves. This is also true when we consider Johnny Foreigners’ access to those things that we do better, cheaper, faster, shinier. Only if we get this the right way around are we going to be able to make sense of the subject:

Services account for around 80% of the UK’s economic activity and about 50% of its exports by value to the EU. While Britain runs a large deficit on the export of goods to the EU, there is always a modest surplus in services – much of it accounted for by the success of London’s City financiers – to close the gap.

There may be little sympathy for bankers and insurers complaining about being left to fend for themselves. But the sheer scale of the foreign earnings that the sector brings back to the UK, which also closes the yawning balance of payments deficit Britain runs with the rest of the world, is crucial, at least in the short term.

No, that’s all the wrong way around. From our point of view if those services exports decline then the pound does too and the balance of payments will balance, as it by definition always does. Deficits on the current account - not the balance of payments, as they suggest, when they mean balance of trade - are always balanced by a surplus on the capital account after all. This being inherent in our very use of the word “balance”.

It is this though which is to be entirely wrong:

The chancellor said he hoped a planned memorandum of understanding (MoU) on the issue would reassure the EU and persuade Brussels to give the City of London the access it craves.

No, it is European businesses - consumers, economies if you prefer - which crave access to the services of the City. This is, after all, where most large scale financing is done and economies like to have a better, cheaper, faster, shiner, source of financing.

The argument is about whether they gain access to us. Not about whether we do to them.