The Trade Implications of Brexit....

mrginge

the irony of a lifelong Tory who now appears to be a cheerleader for manufacturing industry is a joy to behold

CLAPTON

cells wrote: »

I used to think that too but there is a mismatch between production and demand.

For instance the nissian plant produces about 300,000 units of the qashqui while demand for the car in the uk is only about 50,000 units. even if somehow nissian could increase their sales of the qashqui in the UK to become the best selling car in the UK that would mean 108,000 units sold in the UK. That still leaves close to 200,000 units that need to be sold elsewhere in the EU at a tarriff of 10% your looking at an export tarriff bill of £300m per year just for that model and closer to £500m a year for all their models

as 'remainers' I guess there is no surprise that you and Hamish don't believe in the benefits of free trade

wotsthat

CLAPTON wrote: »

as 'remainers' I guess there is no surprise that you and Hamish don't believe in the benefits of free trade

I have to admire the good Brexiteers of Sunderland. They have such a belief in the benefits of free trade they voted to make themselves redundant.

cells

CLAPTON wrote: »

as 'remainers' I guess there is no surprise that you and Hamish don't believe in the benefits of free trade

I am somewhere in the middle. I think free trade is good and helps in the long run but in the short to medium term the rebalancing can be quite painful and by medium term we could be talking 30 years or a whole generation so on the human scale its quite important.

With regards to car manufacturing I think its reasonable that the EU tries to keep most the production within the EU. There isn't an intrinsic benefit of having a car plant in country x or y unlike say growing bananas. Imagine we had free trade with the whole world my bet is that the Sunderland plant which by all accounts I've read is a huge success would probably never have been built in the UK the Japanese would probably have built a plant in Japan and exported to the UK. That is 500,000 cars or about £8 billion a year in GDP/wages/jobs/taxes that would not be generated in the UK.

If we were all computers or like the volkans in star treck making purely logical choice we would be to have a plant in Europe and the UK to meet local or near local demands but the Japanese lole all humans for now think more of their own than others so they would first build in Japan. So the EU anti free trade that is 10% tariffs on cars is OK in my books for now. Longer term (maybe over 50 years) I would like to see that 10% tarriff knocked down towards zero but longer term I would also like to see free movement of people not just in the EU but the whole world

cells

HAMISH_MCTAVISH wrote: »

Precisely.

There's going to be a lot of unemployed automotive workers in the Midlands and North of England if we don't retain Single Market membership.

Although that should come as no surprise.

Given Vote Leave's own economist Patrick Minford already admitted it in the following statement to a HoC committee.....

Without membership of the Single Market the UK automotive industry will be run down over time until virtually all car manufacture in the UK ceases.

And that's not my claim - it's that of 'Economists for Brexit'.

I still don't know if brexit will be a good thing overall I was only a weak stay voter. However I accept (especially now) that I and probably almost all the voters had no real understanding of the details when we voted.

The car manufacturing is a prime example. Like Clapton i simply though OK we import more than we export worst case we will just consume more local production. That probably works for things lole bottled water or manufacturers foods but clearly not for cars. Of course I haven't the time or interest to go and try to find out for each and every product and service

There is also another dimension. If you think of the Sunderland plant it exports something like 80% of its production so for now a weaker pound is fantastic for them. They are in the single market so can charge more ££pounds££ for their cars in the EU as the pound is now weaker vs the euro. So in the short term we might get false positives places like the Sunderland plant reporting higher profits and higher unit production until the exit and the 10% tarroff kicks in. So we may get good news and wrongly conclude things are even better once we voted out until the day the tarroffs kick in

CLAPTON

cells wrote: »

I used to think that too but there is a mismatch between production and demand.

For instance the nissian plant produces about 300,000 units of the qashqui while demand for the car in the uk is only about 50,000 units. even if somehow nissian could increase their sales of the qashqui in the UK to become the best selling car in the UK that would mean 108,000 units sold in the UK. That still leaves close to 200,000 units that need to be sold elsewhere in the EU at a tarriff of 10% your looking at an export tarriff bill of £300m per year just for that model and closer to £500m a year for all their models

so lets do some maths that you love so much

the pound-euro has falled from about 1.4 to 1.2 lets say by about 14%

and lets say 10% tariff are imposed on UK cars

so Uk cars and componenets will be about 4% CHEAPER in the EU than a year ago.

Given the huge popularity of protectionism amoungst remainers let's say the UK imposes 10% tariff on EU cars (I of course disapprove but the overall weight of foolish people will win the debate

So german cars will be have 10% tariffs plus 14% currency change so will be 28% DEARER here in the UK.
That of course won't matter to Germany because the EU is much bigger than the UK and the pain to Germany will be shared out : so Greece, Poland, Romania etc will all chip into the pot to help Bavaria out.

So it would seem there will be a huge surge in demand for UK cars
and the good people of sunderland will have a job for a few more years yet.

Tromking

CLAPTON wrote: »

So it would seem there will be a huge surge in demand for UK cars
and the good people of sunderland will have a job for a few more years yet.

Yep.
I`ll swap my Spanish built Renault SUV for the newly more affordable British designed and built Nissan Quashqai.

Herzlos

CLAPTON wrote: »

I have given reasons why I think that a sustainable population is good for the people of UK.

So your only issue is with population size?

In that case, what is your ideal UK population size and how do you think we should handle the increased cost of our aging population?

Do you think we should be increasing/decreasing our population over time?

CLAPTON

Herzlos wrote: »

So your only issue is with population size?

obviously not

In that case, what is your ideal UK population size and how do you think we should handle the increased cost of our aging population?

Do you think we should be increasing/decreasing our population over time?

I don't have an ideal population size but I think that the world doesn't need an increasing population and neither does the UK.

What costs are you concerned about?

Herzlos

CLAPTON wrote: »

What costs are you concerned about?

The 2 big ones are pensions and care of the elderly; as our population ages (we live longer these days), they require more money to sustain.