If we vote for Brexit what happens

cells

DavidJonas wrote: »

I don't think you understand. Tariffs are a tax. Just like a customs duty. The tariffs apply to countries exporting products to the EU. If we leave the EU, notwithstanding a trade deal that circumvents them, they will apply to UK exporters.

A dairy farmer wishing to sell a pint of milk for, let us say, £1 a gallon, currently gets £1 for each gallon. From outside the EU he would have to give 30% of that to the EU. Which leaves him with 70p. Quite a drop.

Taxes increase prices.

Our EU contributions (net of the cash that gets dolloped onto Wales, Northern Ireland etc) are trivial compared to the benefits of the single market.

taxes on foreign imports just means production is local where it can be local.

So if we were a net exporter of milk to Europe by say 10 units and left the EU then its likely that we would see 10 units less production in the UK and 10 units more in Europe.

The UK is however a net importer of goods so its in the interest of most countries to have free trade of goods with us.

We are a net exporter of services which are so much harder to put a wall up against because its just a flow of information. eg films or software would be difficult to place import tariffs on and even if that happened it would just be a tax on the locals as if someone wants to watch the latest james bond film they are not going to instead watch some crap german film in its place if there is a 30% tax on the james bond import

CLAPTON

Filo25 wrote: »

You seem to have the belief though that we will rapidly be able to negotiate trade deals when we leave the EU.

I can't think of too many trade deals recently which have been quickly negotiated, TTIP has been dragging on for a few years already with no end in sight.

Oddly enough both sides in trade deals tend to drag it out in the hope of getting what they see as the best possible deal for their country, I would think the only way you can easily negotiate them quickly is to give the other side better terms.

Because let's be honest here post EU exit, locked out of the major trading blocks, we are likely to be the ones who are rather more keen to get quick deals done than our negotiating counterparties are.

We start with deals in place and trade actually taking place. So if a country didn't make some interim deal or quickly conclude a deal, their own citizens would suffer immediate consequences.

Whilst I accept the logic that the smaller player may be quicker to come to a deal, the UK is the large player in the world.

Filo25

cells wrote: »

taxes on foreign imports just means production is local where it can be local.

So if we were a net exporter of milk to Europe by say 10 units and left the EU then its likely that we would see 10 units less production in the UK and 10 units more in Europe.

The UK is however a net importer of goods so its in the interest of most countries to have free trade of goods with us.

We are a net exporter of services which are so much harder to put a wall up against because its just a flow of information. eg films or software would be difficult to place import tariffs on and even if that happened it would just be a tax on the locals as if someone wants to watch the latest james bond film they are not going to instead watch some crap german film in its place if there is a 30% tax on the james bond import

To be honest I would think the EU would find it relatively easy to hurt the London based financial services industries.

With regards to the impact of us being a net importer of goods, I would imagine in a lot of industries we aren't really competitive at the moment (its why we are importing so much in them right now).

We obviously would put up tariff barriers in the absence of any free trade deals in those areas, but that in itself is inflationary, unless British production can kick in immediately at the same price and quality, unfortunately it can't which is why we are importing those goods in the first place.

Obviously there would be an impact on the EU of all this as well but proportionately it is much smaller as obviously the overall economy is much bigger, they can afford to play hardball on this negotiation as they want to make sure it doesn't give any other member states any bright ideas.

That may not be pleasant but I suspect is realistic, in the same way I suspect Scotland would have struggled to get favourable terms for leaving rUK had they opted for independence.

While the balance of trade does have an impact, the larger economy will always tend to have more leverage in these negotiations.

Filo25

CLAPTON wrote: »

We start with deals in place and trade actually taking place. So if a country didn't make some interim deal or quickly conclude a deal, their own citizens would suffer immediate consequences.

Whilst I accept the logic that the smaller player may be quicker to come to a deal, the UK is the large player in the world.

Its not large compared to China, the US or the EU, or even Japan, and that is a lot of the World economy right there.

CLAPTON

Filo25 wrote: »

Its not large compared to China, the US or the EU, or even Japan, and that is a lot of the World economy right there.

what is your point?
trade is mutually beneficial : neither party is doing the other a favour :both are there to gain advantage

in all these cases the UK (via the EU) will have existing contracts for both exports and imports : each country will have to decide whether or not to increase/change their tariffs or other T&C knowing they will probably find a response.

anyway being the 5 or 6th largest economy in the world entitles us to consider we are a big player

michaels

DavidJonas wrote: »

But the UK exports milk. Cheese and butter too.

http://dairy.ahdb.org.uk/market-information/processing-trade/imports-exports/uk-dairy-exports/

We produce 14,393 million litres of milk a year.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/421388/Monthly_Notice_March_2015.pdf

That is 225 litres a year for every man, woman and child in the country. What is that? A pint a day every day for everybody? Babies too. Maybe you drink that much milk. I don't.

Canada, eh?

Canada has a 241% tariff on imported Milk above quota. Obviously, the UK currently has no agreed quota.

http://www.theglobeandmail.com/report-on-business/economy/tariffs-are-the-hidden-hand-behind-us-canada-price-gap/article8412498/

So we are going to import Canadian milk and charge them a 0% tariff, but our own milk exports to Canada are going to suffer a 241% tariff?

That doesn't seem very fair.

Canadian butter tariffs by contrast are 299%. Cheese is merely 246%.

Why would we offer 0% tariffs to Canadian (Or US, or Australian) dairy imports? Just so we can wreck our dairy industry while they aggressively protect theirs? As a straw poll, does anybody else want this?

You seem to be assuming that free trade is the default position in the world. It is not.

If the EU applied high enough tariffs on bananas I am sure they could grow their own in heated greenhouses - doesn't mean it makes economic sense to do so.

Personally I don't see it is a good thing that all UK consumers pay more for their food just so that we (and even more so Europe) can protect their farmers. Don't foget farming employs what - 0.5% of the workforce and higher food prices are extremely regressive.

Surely there are better arguements for staying in the EU than that we will no longer be able to subsidise the export of dairy products whilst impoverishing poor consumers through higher food bills?

Anyone got an economic text book to hand - as a country having to trade with others who impose tariffs are you still not better off if you don't apply tariffs yourself? Shall we start with wikipedia? https://en.wikipedia.org/wiki/Free_trade

Filo25

CLAPTON wrote: »

what is your point?
trade is mutually beneficial : neither party is doing the other a favour :both are there to gain advantage

in all these cases the UK (via the EU) will have existing contracts for both exports and imports : each country will have to decide whether or not to increase/change their tariffs or other T&C knowing they will probably find a response.

anyway being the 5 or 6th largest economy in the world entitles us to consider we are a big player

If its that straightforward why do trade deals seemingly take forever to finalise?

Its pretty obvious every country/grouping tries to get the best deal for themselves they can and will use whatever leverage they have to achieve that.

It's not the end of the world and you can work around it and adapt, but I would say you aren't going to get quick good trade deals for the UK outside of the EU, and that will at best cause some short term disruption.

Just trying to be realistic here, the UK is a dramatically smaller economy than the rest of the EU and the US for a start. the US have already come out and said the UK wouldn't be a priority for a deal, TTIP will remain their focus, hardly surprisingly given the size of that one.

mrginge

DavidJonas wrote: »

But the UK exports milk. Cheese and butter too.

http://dairy.ahdb.org.uk/market-information/processing-trade/imports-exports/uk-dairy-exports/

We produce 14,393 million litres of milk a year.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/421388/Monthly_Notice_March_2015.pdf

That is 225 litres a year for every man, woman and child in the country. What is that? A pint a day every day for everybody? Babies too. Maybe you drink that much milk. I don't.

Canada, eh?

Canada has a 241% tariff on imported Milk above quota. Obviously, the UK currently has no agreed quota.

http://www.theglobeandmail.com/report-on-business/economy/tariffs-are-the-hidden-hand-behind-us-canada-price-gap/article8412498/

So we are going to import Canadian milk and charge them a 0% tariff, but our own milk exports to Canada are going to suffer a 241% tariff?

That doesn't seem very fair.

Canadian butter tariffs by contrast are 299%. Cheese is merely 246%.

Why would we offer 0% tariffs to Canadian (Or US, or Australian) dairy imports? Just so we can wreck our dairy industry while they aggressively protect theirs? As a straw poll, does anybody else want this?

You seem to be assuming that free trade is the default position in the world. It is not.

This is absolutely delightful. However, you have conveniently forgotten to look at the net position, which clearly shows that we are a net exported of milk, but a net importer of butter and cheese.

How will all those French cheese producers get access to the Uk market in your doom and gloom scenario?

Or are you suggesting that we have to put up with tariffs on our exports to protect EU suppliers, but we would not be able to put equivalent tariffs on imports to protect our own suppliers?

Is that your logic?

If it is you are nuts.

antrobus

angrypirate wrote: »

...The issue of the EU is so much more than immigration. But if you want to make it about immigration, we could stop paying benefits to all immigrants from the EU straight away.

I don't want to make it about immigration. But clearly that is one of the issues.

And no, you can't "stop paying benefits to to all immigrants from the EU straight away" if you are in the EEA. (Never mind the EU.) Equal treatment applies to all EEA citizens.

CLAPTON

Filo25 wrote: »

If its that straightforward why do trade deals seemingly take forever to finalise?

Its pretty obvious every country/grouping tries to get the best deal for themselves they can and will use whatever leverage they have to achieve that.

It's not the end of the world and you can work around it and adapt, but I would say you aren't going to get quick good trade deals for the UK outside of the EU, and that will at best cause some short term disruption.

Just trying to be realistic here, the UK is a dramatically smaller economy than the rest of the EU and the US for a start. the US have already come out and said the UK wouldn't be a priority for a deal, TTIP will remain their focus, hardly surprisingly given the size of that one.

Our starting point is somewhat different in this situation, as all countries will have a tariff level already in place. If nothing is done, then they will continue.
New deals may be more difficult but the world trend is towards lower tariffs.
I would image that most countries can handle more than one deal at any one time.
Our top trading partner isn't the EU : it is Germany who may well have a different view of the value of the trade than the 'EU'