What now? EU

ILW

ChiefGrasscutter wrote: »

perhaps they will be fined - thereby adding to their defecit!

That's no problem, the people that issued the fine will then give them the money to pay it.

It's Alice in bloody Wonderland.

Linton

IronWolf wrote: »

Yes but Europe is not the USA, it does not operate a federal system which can redistribute wealth from the economic centres to the poorer parts.

Like it or not, we are in competition for tax revenue with the rest of Europe because other countries wont distribute some of theirs to us like in the USA. Yes it DOES matter if they're "our" companies, because the UK then gets TAX from them, which it can spend on Britons.

Europe is not the USA, yet, though it does distribute some wealth to the poorer areas of the UK, for example the North East.

But for the key argument: Looking at what you might consider as being "our" companies , they can for the sake of argument be divided into two. Smaller companies that mainly trade locally which will always be based here, and multinationals which operate across the world.

The latter have the technology, the power, and increasingly the wish to pay corporate taxes where they see it as being most advantageous. This may have little relationship to where they employ people, sell or manufacture, or on which stock exchange their shares are listed. In no real sense are they "our" companies.

So what can we do?

Two choices - accept the multinationals' strength and fight every other country to provide the cheapest environment or cooperate closely with other countries to create a countervailing power.

You can see an example of the latter when the EU fined Microsoft over $1B for anti-competitive behaviour. Microsoft had little choice but to pay. If a small country had tried that, Microsoft could have threatened to withdraw, or could have brought the power of the US government to bear.

If we dont create that countervailing power I see our economy being dominated by the large multinational corporations acting totally in their own interests, or in the interests of those countries powerful enough through the size of their home market to control "their" multinationals.

ILW

Could this mean that the UK can now consider pulling out of the CAP?

Linton

CLAPTON wrote: »

and while I agree in principle about the zero sum games bit; it practice it seems more like a negative sum game with the costs of the excessive rules and regulations that don't apply in other parts of the world

Except perhaps in the USA where the companies have no choice but to accept the local rules and regulations. For example the US accounting laws and the restrictions on trading with those countries the US government doesnt like.

vivatifosi

Linton wrote: »

If we dont create that countervailing power I see our economy being dominated by the large multinational corporations acting totally in their own interests, or in the interests of those countries powerful enough through the size of their home market to control "their" multinationals.

This is an important point. UNCTAD produces a Transnational Corporation (TNC) index which ranks international companies by geographic spread. It hasn't been updated for a bit, but the latest versions can be found here:

http://www.unctad.org/templates/page.asp?intItemID=2443&lang=1

Many of these TNCs are headquartered in Europe and three of the top four are British registered (Shell, Vodafone, BP). Considering the size of its economy, there are few US companies on it (approx 18%, though still the country with the largest number) as the relative homogeneity of the home market means that US companies have a large home base that can be relied on for a substantial part of market share. This is not the case for European companies. Despite the relative difference in size the UK accounts for 15%, France 15% and Germany 13%. Even Japan only has 9%.

There's nothing whatsoever to stop these very large organisations moving somewhere else if we are no longer part of the EU, or dictating the terms for being headquartered here. Though some of them have huge presences overseas and the pain of loss would not be as great, for others the loss to the economy could be significant.

MacMickster

vivatifosi wrote: »

There's nothing whatsoever to stop these very large organisations moving somewhere else if we are no longer part of the EU, or dictating the terms for being headquartered here. Though some of them have huge presences overseas and the pain of loss would not be as great, for others the loss to the economy could be significant.

Additionally, a number of large companies (such as Nissan and Toyata) have set up manufacturing bases in the UK specifically due to us being in the EU, as there are no import tariffs when the goods manufactured here are sold in the EU. If we were to pull out of the EU then they would almost certainly close their plants here.

IronWolf

MacMickster wrote: »

Additionally, a number of large companies (such as Nissan and Toyata) have set up manufacturing bases in the UK specifically due to us being in the EU, as there are no import tariffs when the goods manufactured here are sold in the EU. If we were to pull out of the EU then they would almost certainly close their plants here.

We buy more from the EU than we sell, theres no chance they'd start imposing tariffs because we'd just throw tariffs right back at them.

Free trade does not have to come hand in hand with giving our sovereignty to the EU

A._Badger

MacMickster wrote: »

Additionally, a number of large companies (such as Nissan and Toyata) have set up manufacturing bases in the UK specifically due to us being in the EU, as there are no import tariffs when the goods manufactured here are sold in the EU. If we were to pull out of the EU then they would almost certainly close their plants here.

No they wouldn't. This is just the usual Europhile scaremongering.

While VW, Renault, Fiat, Ford. Peugeot/Citroen, Mercedes and GM all seek to flog their EU manufactured cars to us, there is not one chance in a million that they would try to tax our mere handful out of their market.

ILW

MacMickster wrote: »

Additionally, a number of large companies (such as Nissan and Toyata) have set up manufacturing bases in the UK specifically due to us being in the EU, as there are no import tariffs when the goods manufactured here are sold in the EU. If we were to pull out of the EU then they would almost certainly close their plants here.

Do you honestly beleve that if the UK left the EU that they would set up import tariffs against UK goods?

MacMickster

ILW wrote: »

Do you honestly beleve that if the UK left the EU that they would set up import tariffs against UK goods?

Yes. I think that there is a very strong possibility of exactly that. As the current crisis evolves I think that it is almost inevitable that we will see a move towards protectionism (rightly or wrongly), in which case we do not want to be outside of the EU.

The EU are not going to simply abandon all their rules on health and safety, worker protection etc, and will almost certainly act in the next few years to give businesses operating within their market at least a level playing field with businesses outside who are not following the same rules.