The Trade Implications of Brexit....

CLAPTON

Herzlos wrote: »

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.

when do you see these as becoming important?

I assume you are unconcerned about the cost of providing family homes for young people, decent access to health care, cost of upgrading our infrastructure (trains, buses, roads, motorway etc) to cater for population growth

cells

CLAPTON wrote: »

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.

I accept what you have posted makes sense but both of us are missing something here as the UK currency crashed from $2.1 to $1.3 but there was no huge expansion of british factories like Sunderland. Why? Why didn't it already happen if a lower currency is the answer to everything?

Also the decisions for future capacity will surely be easy in a highly automated factory like the car plant in Sunderland where about 5000 workers produce 500,000 cars would you place it within the EU and not pay tariffs on 85% and pay the tariffs on the 15% exported to the UK or do you place it on the UK and pay tarroffs on the 85% exported to the EU? Bear in mind 10% of 500,000 vehicles is something like 1 billion euro a year.

mrginge

cells wrote: »

I accept what you have posted makes sense but both of us are missing something here as the UK currency crashed from $2.1 to $1.3 but there was no huge expansion of british factories like Sunderland. Why? Why didn't it already happen if a lower currency is the answer to everything?

This is a sensible point. One which undermines your own logic regarding outcomes following the imposition of tariffs.

Also the decisions for future capacity will surely be easy in a highly automated factory like the car plant in Sunderland where about 5000 workers produce 500,000 cars would you place it within the EU and not pay tariffs on 85% and pay the tariffs on the 15% exported to the UK or do you place it on the UK and pay tarroffs on the 85% exported to the EU? Bear in mind 10% of 500,000 vehicles is something like 1 billion euro a year.

why, if 85% of your customers were situated in the eurozone, would you make a decision to site a production facility in a country that used GBP.
Clearly Nissan could have easily sited in Germany and avoided currency fluctuations.

If the answer is - well they looked at a variety of factors, why do you presume that the theoretical imposition of tariffs would immediately outweigh all those other factors?

cells

mrginge wrote: »

This is a sensible point. One which undermines your own logic regarding outcomes following the imposition of tariffs.

why, if 85% of your customers were situated in the eurozone, would you make a decision to site a production facility in a country that used GBP.
Clearly Nissan could have easily sited in Germany and avoided currency fluctuations.

If the answer is - well they looked at a variety of factors, why do you presume that the theoretical imposition of tariffs would immediately outweigh all those other factors?

I think the Sunderland plant was built before the euro
The currency markets are the biggest and most liquid so you can hedge them quite far into the future maybe even for the expected life of the plant.

Whatever the factors businesses will look into its clear that tarriffs won't make us more attractive. I already noted that tarriffs would probably mean not that much negative for bottled water or foods or even smaller manufacturing factilisties which can sell all their products into the UK. But for cars its clearly going to be a negative. I am lost as to why you and Clapton think its a positive if its so great why don't we voluntarily impose export tarriffs on ourselves if they are not a problem. Given the UK market of 65 million vs over 440 million for the EU without the UK I can't see any large factory which needs more than 65 million customers would want to be in the UK than the EU

Herzlos

CLAPTON wrote: »

when do you see these as becoming important?

It's going to get more important over time; if you reduce the number of working age adults (either in real terms or proportionately) then you increase the burden on them in order to maintain care for the eldery.

I assume you are unconcerned about the cost of providing family homes for young people, decent access to health care, cost of upgrading our infrastructure (trains, buses, roads, motorway etc) to cater for population growth

The 2 are related. If you stretch the young too thin, the tax burden will be too high for them to afford family homes. Some will then leave and make it worse for the rest.

Infrastructure for population growth is going to be covered by the money generated from that population growth.

The problems you're talking about aren't caused by population, they are caused by poor planning and financial management by the government.

Tokyo has a much denser population than the UK @ 13.6 million in the city area, yet it has vast infrastructure that makes London look like it's still under Roman occupation.

mwpt

mrginge wrote: »

why, if 85% of your customers were situated in the eurozone, would you make a decision to site a production facility in a country that used GBP.
Clearly Nissan could have easily sited in Germany and avoided currency fluctuations.

If the answer is - well they looked at a variety of factors, why do you presume that the theoretical imposition of tariffs would immediately outweigh all those other factors?

Japan is in on project fear, you have sussed it.

mrginge

cells wrote: »

I am lost as to why you and Clapton think its a positive if its so great why don't we voluntarily impose export tarriffs on ourselves if they are not a problem. Given the UK market of 65 million vs over 440 million for the EU without the UK I can't see any large factory which needs more than 65 million customers would want to be in the UK than the EU

You clearly are lost, since I have nowhere stated that which you attribute to me.

mrginge

mwpt wrote: »

Japan is in on project fear, you have sussed it.

Thank you for your continued efforts in advancing my knowledge.

CLAPTON

cells wrote: »

I

But for cars its clearly going to be a negative. I am lost as to why you and Clapton think its a positive if its so great why don't we voluntarily impose export tarriffs on ourselves if they are not a problem.

It does seems that defending the EU religion, has the usual detrimental affects that all religious orthodoxy has on brain cells of the acolytes.

could you quote a reference where I supported this total load of rubbish.

you will however find hundreds, possibily thousands of my posts, where I has extolled the virtues of free trade as being of mutual (that means to both parties) benefit.

cells

CLAPTON wrote: »

It does seems that defending the EU religion, has the usual detrimental affects that all religious orthodoxy has on brain cells of the acolytes.

could you quote a reference where I supported this total load of rubbish.

you will however find hundreds, possibily thousands of my posts, where I has extolled the virtues of free trade as being of mutual (that means to both parties) benefit.

But the world doesn't have fully free trade so if the UK leaves the EU market what will happen to the car industry like the Nissan plant and Jag/LandRover plants which those two together build a million units combined.

I suppose we will see in time.