If we vote for Brexit what happens

BobQ

CLAPTON wrote: »

what is a 'formal' trade deal?
how is it defined in law?
does Turkey have a formal trade deal?

Read the WTO Rules on MFN status. They say:

Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group — discriminating against goods from outside. Or they can give developing countries special access to their markets. Or a country can raise barriers against products that are considered to be traded unfairly from specific countries. And in services, countries are allowed, in limited circumstances, to discriminate. But the agreements only permit these exceptions under strict conditions. In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.

Its glossary defines free trade area as:

free trade area

Trade within the group is duty free but members set their own tariffs on imports from non-members (e.g. NAFTA).

I should have said free trade rather than formal trade.

Turkey is a member of the EU's custom zone so would continue to have free trade in the areas covered within the EU.

Rinoa

Here's why the EU has so few trade deals:

A secret government memo today reveals how a trade war between European Union countries is damaging the British economy. The damning Whitehall assessment – seen by the Telegraph – has found that France and other EU countries are hampering new “free-trade” deals because they want to protect their farmers from the extra competition.
David Cameron claims that the power of Brussels to negotiate these free-trade agreements with parts of the world such as the United States is a critical reason why Britain must not leave the EU.
But the memorandum suggests that Britain is losing out on £2.5 billion a year in potential trade as a result of the ongoing delays to a proposed deal between the EU and Latin America.

The sooner we leave and negotiate our own deals the better.

http://www.telegraph.co.uk/news/2016/05/21/trade-wars-memo-shows-eu-is-costing-uk-billions/

BobQ

Rinoa wrote: »

Here's why the EU has so few trade deals:

The sooner we leave and negotiate our own deals the better.

http://www.telegraph.co.uk/news/2016/05/21/trade-wars-memo-shows-eu-is-costing-uk-billions/

Trade deals are almost by definition mutual agreements to balance protectionism in each nation with the benefits of the wider trading opportunities. All nations try to negotiate the best deal. It perhaps follows that the side that gets the best deal is the one with the greater bargaining power.

I am glad you see the post Brexit scenario as negotiating trade deals. The prominent pro-Brexit economist (Patrick Minford) who co-authored the economists for Brexit paper, advocates the UK outside of the EU trading with the whole world under WTO terms. While I do not agree, he is advocating massive structural changes to the UK economy to do this so rather than negotiating better terms with the EU.

I suspect in the world of macroeconomics as an elderly academic with a secure job he is less concerned with the micro worlds in which people get made redundant due to necessary structural changes.

CLAPTON

BobQ wrote: »

Read the WTO Rules on MFN status. They say:



Its glossary defines free trade area as:



I should have said free trade rather than formal trade.

Turkey is a member of the EU's custom zone so would continue to have free trade in the areas covered within the EU.

so nothing to stop the EU and the UK from establishing a free trade area if the EU27 wanted to do the best by its own citizens.

CLAPTON

BobQ wrote: »

Trade deals are almost by definition mutual agreements to balance protectionism in each nation with the benefits of the wider trading opportunities. All nations try to negotiate the best deal. It perhaps follows that the side that gets the best deal is the one with the greater bargaining power.

I am glad you see the post Brexit scenario as negotiating trade deals. The prominent pro-Brexit economist (Patrick Minford) who co-authored the economists for Brexit paper, advocates the UK outside of the EU trading with the whole world under WTO terms. While I do not agree, he is advocating massive structural changes to the UK economy to do this so rather than negotiating better terms with the EU.

I suspect in the world of macroeconomics as an elderly academic with a secure job he is less concerned with the micro worlds in which people get made redundant due to necessary structural changes.

don't you expect large redundancies each year if we stay in the EU?

Rinoa

BobQ wrote: »

Trade deals are almost by definition mutual agreements to balance protectionism in each nation with the benefits of the wider trading opportunities. All nations try to negotiate the best deal. It perhaps follows that the side that gets the best deal is the one with the greater bargaining power.

Yes, but with 28 countries there will always be winners and losers. The losers will always veto the deal because its not in their interest.

So the deals just don't happen.

HornetSaver

Rinoa wrote: »

Yes, but with 28 countries there will always be winners and losers. The losers will always veto the deal because its not in their interest.

So the deals just don't happen.

But we will be a miraculous exception should we vote leave?

I accept it's not quite comparing like with like as we are currently part of the EU, but as soon as 27 countries with separate agendas have a licence to cherry pick parts of the deal, we will soon find ourselves in a comparable situation.

buglawton

CLAPTON wrote: »

don't you expect large redundancies each year if we stay in the EU?

On the subject of the date we stopped our wife-beating, maybe the massive redundancies looming for the steel industry would not be happening if we weren't in the EU.
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buglawton

BobQ wrote: »

Yes but say we currently add 10% tariff on cars from outside the EU (no idea what the actual figure is). EU imports do not carry that tariff.

After Brexit UK must impose a 10% tariff on all cars (including those from the EU). If we were only to levy a tariff of 3% on the EU cars we import, we must levy the same 3% on ALL car imports.

So the idea that outside the EU we do a special deal with the EU outside of a formal trade agreement is flawed. If we charge 3% on EU imports (car price rises) we do it on China/US/Australian imported cars. Prices might fall by so would tax revenue.

If the EU agree to levy only a 3% tariff on our exports of cars to them, they need to charge 3% on all car imports outside of a trade agreement.

We could indeed charge a flat 3% across all countries, and reduce VAT on cars from 20% to 17% to compensate. Can't see the issue.

Generali

buglawton wrote: »

On the subject of the date we stopped our wife-beating, maybe the massive redundancies looming for the steel industry would not be happening if we weren't in the EU.
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Why? Would the steel price not have collapsed if the UK wasn't in the EU?