Brexit, the economy and house prices part 5

Moby

Tromking wrote: »

Had we stayed it wouldn’t have been much different. Juncker and Verhofstadt have both stated that non-Eurozone EU nations need to be ignored going forward and then ultimately thrown out.
I see that as part of the initial agreement between the potential German coalition partners, there’s a section on giving Macron full support on his Eurozone integration plans.
We’re leaving at just the right time.

Being part of such an integration plan would have been a whole new exciting direction for the UK. From now on we are going to be sidelined anachronism off the coast who no one listens to anymore hanging on the coat tails of America:(

buglawton

Car manufacturing is a high value industry with a valuable supply chain that employs many times the car factories number of people. If the services that keep the high tech automation working are UK or EU based, that's another valuable aspect of the supply chain. The presence of local high tech design and manufacturing also develops and retains intelligent skills in the country. If the whole lot were to go to Asia lock, stock and barrel, that'd be a big blow both to balance of trade and socially.

Farming has already gone mechanised, employing a tiny fraction compared to the past. Here the arguments are around balance of trade, countryside management and spin-offs such as tourism. But still a cause for strong protectionism.

What's remarkable is that Western governments are two faced, claiming free trade is the goal while having no intention of dismantling protectionism. You rarely hear protectionism mentioned in govt manifestos or policy statements, but there it is.

gfplux

Much of my life I was involved with the importation of goods from Europe and Asia.
Over those many years I saw and made decisions of which country to give my orders to change because of a small change in import duties caused by a customs ruling. (There are trade agreements and then there are rulings by the British customs which can change the original intention)


Anecdote. This is open to challenge as I may have miss remembered.
In the 1990’s you might have wondered why so many sports shorts had a net interior like swimming shorts or why speedos became less popular to import or stock, or swim shorts so cheap?
Just because of a British customs ruling that said a net interior in shorts make it an article of swimwear and therefore unlimited quota and zero duty.


I hope there are other posters who have more and up to date experience of the wonderful world of import/export as I have been retired for over twenty years.

chucknorris

Thrugelmir wrote: »

In the news today.



https://uk.reuters.com/article/uk-germany-autos-britain/german-car-suppliers-could-lose-thousands-of-jobs-over-hard-brexit-study-idUKKBN1F0138

Sorry I didn't read the link (this might be covered), I'm hurrying out to do a gym class, so don't have time. But surely although Germany's UK sales might be hit, aren't they are likely to sell more cars in Europe post Brexit, to (more than?) compensate.

vivatifosi

In answer to gfplux above, presumably it depends on how tightly defined the sectors are. They will likely use SIC codes to define the sector. For example, all farming in the UK on UK codes begins 01, but is then broken down by sector, so broadly, farming with animals is 014, then raising dairy cattle is 01410. So the number gets longer with each additional level of detail.

However that's just for the cattle. Moving over to the production side, 105 is broadly dairy. Liquid milk and cream is 10511. Cheese and dairy manufacture is code 10512. So the further you get into the detail, the more sections you would need in your fta. I don't have the full list in front of me, but the cheese sector will probably break down further too.

I'm not an expert on manufacturing, but I am a researcher who has worked with industry classifications for many years. The government breaks down all its codes this way and are able to draw up lists of companies affected by each variation should they so wish, as that's how it is recorded on their databases. Other countries also have similar lists of codes and some big organisations such as Dun and Bradstreet, have lists codes by multiple standards, e.g. UK and USA. The EU codes are standardised, so the UK adopted the EU standard (NACE).

So going back to your question, how many would we need. It depends how you break it down. If you go for the most basic, goods and services, you would potentially need two. It will be more complicated than that though as hopefully I've demonstrated. Arable farming is another example. You could have one agreement covering all fruit and veg, two agreements, one for fruit, one for veg, or go further and break down by the specific crop.

The problem with all of these specifications is that you can still be outside the classification and be a business with activities not elsewhere classified! Thankfully there aren't lots of those and some I suspect from working with the codes for a long time is lazy classification, but they do exist.

Tromking

chucknorris wrote: »

Sorry I didn't read the link (this might be covered), I'm hurrying out to do a gym class, so don't have time. But surely although Germany's UK sales might be hit, aren't they are likely to sell more cars in Europe post Brexit, to (more than?) compensate.

I’ve got to say that I’m struggling with the notion that in the event of a non-sympathetic Brexit for the German car industry, the UK consumer would rather not buy a new car because it isn’t German and the rest of Europe will rather conveniently pick up the slack and start buying a shed load more German cars.
What am I missing?

ukcarper

Moby wrote: »

Being part of such an integration plan would have been a whole new exciting direction for the UK. From now on we are going to be sidelined anachronism off the coast who no one listens to anymore hanging on the coat tails of America:(

You might want further integration but I very much doubt that is what the majority of people in UK want. I voted remain but I certainly would have voted leave if it meant going in Euro, what position do you think we would be in now if we did not have control of our own monetary policy.

Enterprise_1701C

ukcarper wrote: »

You might want further integration but I very much doubt that is what the majority of people in UK want. I voted remain but I certainly would have voted leave if it meant going in Euro, what position do you think we would be in now if we did not have control of our own monetary policy.

Totally agree.

The eu want to become one country, within which small regions (which used to be small countries) would have zero influence, Germany and France would run the whole thing and everything would be designed in a way that was advantageous to them.

Had we stayed in the eu I am fairly sure that they would have found a way to force us into the euro or force us out. After all, they want to bankrupt all eu countries except Germany in order to force them to remain within the eu (isn't that what the euro is for after all, anyone with half a brain can see that it is ruinous to most of the eu economies, if they did not want to ruin the economies then they would have done the decent thing and withdrawn the euro long ago).

We are definitely leaving at the right time.

If only they had left it. Within the next couple of hundred years the whole world will realise that it can work together, countries will come together naturally and will work together to build a better world for all. This cannot happen right now, the eu want a better world for Germany, the rest of the countries are simply there to be squashed under their feet.

chucknorris

Tromking wrote: »

I’ve got to say that I’m struggling with the notion that in the event of a non-sympathetic Brexit for the German car industry, the UK consumer would rather not buy a new car because it isn’t German and the rest of Europe will rather conveniently pick up the slack and start buying a shed load more German cars.
What am I missing?

I have no idea why you mentioned this:

the UK consumer would rather not buy a new car because it isn’t German

It has nothing to do with what I posted.

I voted remain, and my opinion hasn’t changed (but see below), but here we are anyway, my stance doesn’t change the reality of the situation. But to answer your question, if Brexit went badly and British cars became more expensive in Europe and German cars more expensive here, although the Germans might sell fewer cars here, their European sales would presumably pick up. Although if the pound fell, perhaps British cars would remain competitively priced in Euros, despite higher trade tariffs. But my post was aimed at German sales (not British). I am not here to argue the case for remaining (even though I personally favoured that), I have accepted the result of the vote.

I must admit though, I was initially surprised by the surge in the ftse since Brexit, and we are more than £250k better off due to the fall of the pound, so from a personal economic viewpoint it isn’t bad.

System

Tromking wrote: »

I’ve got to say that I’m struggling with the notion that in the event of a non-sympathetic Brexit for the German car industry, the UK consumer would rather not buy a new car because it isn’t German and the rest of Europe will rather conveniently pick up the slack and start buying a shed load more German cars.
What am I missing?

The introduction of tariffs would be complicated and probably confusing for the consumer. I don't know for sure but I think the assumption in the report is that consumers would delay purchases to see how things settle down.

UK car makers will have read the report with interest because if car imports could be so dramatically affected then there's a good chance their sales in the EU will go the same way. In 2016 they exported c700k cars to the EU.

I see the point asking why a UK consumer delays purchase but an EU consumer doesn't but my gut feel would be the EU consumer would be more likely to carry on as normal and, seeing fewer UK made cars, would buy a locally built one.

UK car manufacturers export 40% of production to the EU. I don't know what % of EU car production is exported to the UK but it's obviously going to be far less. The risks from a hard messy brexit are assymetrical.