Brexit the economy and house prices part 6

wunferall

Theophile wrote: »

They'll still sell to the UK, but it will be dearer for us to buy. And if we buy less of their stuff because of that, they'll just have to sell more to other markets worldwide. The EU just did an FTA with Japan, a much larger economy. We are not that important, despite what Nigel, Boris and Dr. Fox keep telling you.

Hang on, when Brexiters said that about post-Brexit trade expanding the remainer response was "why aren't we selling to them already?"
You can't have it both ways.
Why are the EU not taking advantage of these new markets already?
I will tell you; it's because the EU take so long to do anything.
Your "just done" for the Japanese FTA took 5 years.
Five!
At that rate by the time a deal is agreed global trade has moved on to new priorities; deals need to be arranged much faster.
The UK is a global top ten economy.
We are more important on the world stage than you are willing to accept.

Theophile wrote: »

You (not you personally, but brexiteers in general) really need to let go of that imperial mindset that has produced meaningless phrases such as 'they need us more than we need them'.

You and many other remainers need to accept that the UK is in fact stronger and more influential globally than you think.
As the number 5 or 6 economy globally there are indeed many others for multiple reasons who do in fact "need us more than we need them"; it's just that you do not like that little factoid.
Why is that, I wonder?
Why do you dislike our country so much that you must denigrate at every opportunity?

wunferall

OldMusicGuy wrote: »

The trouble is that the EU is the UK's most important market at the moment. So they matter more to us than we do to them right now. We can change that over time, but we do need time.

It has been changing for years.
We now sell them much less than we did 20 years ago.
By country our major destination for exports is the USA.
The UK also has the advantage that we can adapt to change far, far faster than the EU can.
We don't have to ask 26 other nations if they agree before we do anything.

ukcarper

OldMusicGuy wrote: »

The trouble is that the EU is the UK's most important market at the moment. So they matter more to us than we do to them right now. We can change that over time, but we do need time.

I agree but to many posters on here say UK leaving without a deal will not be detrimental to EU but it will ok not as much as UK but we make up a significant proportion of their trade.

BobQ

ukcarper wrote: »

I agree but to many posters on here say UK leaving without a deal will not be detrimental to EU but it will ok not as much as UK but we make up a significant proportion of their trade.

But of course they are are wrong and will soon see the hit in their pockets and jobs.

The reason it is detrimental is that the EU buy much more from each other which is tariff free. No deal means WTO rules.

So our cars/electrical cost 10% more in the EU and when we buy their cars and electrical products they will be 10% dearer for us (not just cars but parts). OK we could say we will not levy any tariff on cars or electrical products imported from the EU, but then we are not allowed to levy a tariff on imports of cars/electricals from outside the EU (under WTO). So when we negotiate with Japan for a trade deal they will say why bother our cars/ electrical are already zero tariff.

Moe_The_Bartender

BobQ wrote: »

The reason it is detrimental is that the EU buy much more from each other which is tariff free.

Not unconnected with the fact that if you build a tariff wall high enough, you have to buy products from your own markets. It's called protectionism. Who benefits and who suffers?

kabayiri

BobQ wrote: »

...
So our cars/electrical cost 10% more in the EU and when we buy their cars and electrical products they will be 10% dearer for us (not just cars but parts). OK we could say we will not levy any tariff on cars or electrical products imported from the EU, but then we are not allowed to levy a tariff on imports of cars/electricals from outside the EU (under WTO). So when we negotiate with Japan for a trade deal they will say why bother our cars/ electrical are already zero tariff.

It won't be long before most cars come from China.

Any other view is just wishful thinking.

If the tech companies get to implement their vision of a self-drive EV then they won't care where it's built. Cheapest place possible.

The value add will be in the network services.

It's fanciful to pretend we can ignore any of these trends just by staying in the EU.

OldMusicGuy

wunferall wrote: »

We now sell them much less than we did 20 years ago.
By country our major destination for exports is the USA.
The UK also has the advantage that we can adapt to change far, far faster than the EU can.
We don't have to ask 26 other nations if they agree before we do anything.

Agree, the long term trend is away from the EU in terms of exports. But the reduction (according to House of Commons stats) has been from 54% in 1999 to 44% in 2017. Whether that is "much less" depends on your view of "much less". In 2016 we exported £99.6bn to the US and £318 billion to the EU. So although the US is important and could become more so, it is nowhere near the EU right now in importance to the UK.

As for the speed with which the UK can move, we have spent two years arguing over how to implement a democratic vote and we are still no closer to a conclusion....:rotfl: If you think the current crop of politicians on all sides are well equipped to lead us into these new sunlit uplands, you have more faith in them than me

There's a very interesting site here if anyone wants to explore the actual trade stats: https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/whodoestheuktradewith/2017-02-21 Lots of good interactive charts.

Moe_The_Bartender wrote: »

Not unconnected with the fact that if you build a tariff wall high enough, you have to buy products from your own markets. It's called protectionism. Who benefits and who suffers?

I think we went there before with the Corn Laws in first part of the 19th century. That didn't work out too well....

Herzlos

kabayiri wrote: »

It's fanciful to pretend we can ignore any of these trends just by staying in the EU.

I don't think anyone has ever claimed that.

Will we be able to do anything better from outside the EU? We can settle on trade deals faster but with less leverage, and o my if the EU let's us. It seems our trade negotiating plan is to wait for the EU to do it and hope the other country will let us copy it.

It's worth noting that whilst the percentage of trade with the EU is dropping, it's still a hugely important market for us, so whilst I agree we should be increasing our focus on the far East, I don't think we should be jepoardising our trading relationship with the EU over it.

wunferall

OldMusicGuy wrote: »

Agree, the long term trend is away from the EU in terms of exports. But the reduction (according to House of Commons stats) has been from 54% in 1999 to 44% in 2017. Whether that is "much less" depends on your view of "much less". In 2016 we exported £99.6bn to the US and £318 billion to the EU. So although the US is important and could become more so, it is nowhere near the EU right now in importance to the UK.

As for the speed with which the UK can move, we have spent two years arguing over how to implement a democratic vote and we are still no closer to a conclusion....:rotfl: If you think the current crop of politicians on all sides are well equipped to lead us into these new sunlit uplands, you have more faith in them than me

There's a very interesting site here if anyone wants to explore the actual trade stats: https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/whodoestheuktradewith/2017-02-21 Lots of good interactive charts.


I think we went there before with the Corn Laws in first part of the 19th century. That didn't work out too well....

You probably don't realise that you've done it but you have just highlighted a major problem with the EU; it is far too protectionist.
Members are encouraged to trade with other members rather than globally to the extent that barriers are in place to actively prevent member countries from making better deals themselves, whether or not this would affect the mothership.

The EU isn't a country BTW, much though some wish it was.
Look at the info in your link and you'll see it says very clearly " The US is the country from which the UK earns the most through trade. Exports to the US in 2016 were worth £100 billion, more than twice as much as exports to any other country. "
It then goes on to say " The largest trade deficit is with Germany. In 2016 the UK imported £75 billion in goods and services from Germany, and sold £49 billion. "
Basically the EU are costing us money in their trade deficit.
Why aren't they being fair and buying more from the UK since we're club members?
Why shouldn't the UK be free to choose where it buys what it wants from?

It's excessive deficits like this that led to the USA/China spat and it looks like leading to China being more open to outside trade with them because of the impact caused.

Do not confuse the very obvious stalling or denial of what the UK public voted for with the speed at which the country is able to negotiate trade deals.
As for our politicians, well I think we're in the early stages of a major upheaval in UK politics and I have more faith in the country's abilities to trade than I do in it's willingness to uphold the stated will of it's people.

You're funny, talking on the one hand about the EU yet ignoring their protectionism and then mentioning the Corn Law.
As the song goes, "the times they are a-changin'".
We are entering the fourth industrial revolution.
With our (yes, even recent) historical inventiveness and ingenuity the UK is far better-placed to be at the forefont of this era than the lumbering, indecisive behemoth which the EU has evolved into.

To use your own phraseology, if you honestly believe that the EU "are well equipped to lead us into these new sunlit uplands, you have more faith in them than me"

OldMusicGuy

wunferall wrote: »

You probably don't realise that you've done it but you have just highlighted a major problem with the EU; it is far too protectionist.
Members are encouraged to trade with other members rather than globally to the extent that barriers are in place to actively prevent member countries from making better deals themselves, whether or not this would affect the mothership.

So how come the "protectionist" EU negotiated TTIP to reduce trade barriers with the US? Which was then put on ice by Trump? The EU believes in free trade or at the least low tariff barriers. The current US administration seems far more protectionist.

The EU is in no way protectionist (as in opposed to free trade). But it does impose rules for the single market under the Treaty of Rome that members have to follow. And it does set up regulations that also have to be followed. One of the reasons for a long running spat between the US and the EU is over US beef which is allowed to be treated with growth hormones, which the EU has banned on health grounds.

If we leave the EU, we can decide to allow beef treated with growth hormones into the UK. We will almost certainly have to if we want a trade deal with the US. That's the sort of decision we can make on our own once we leave, but there's no way the EU is acting as some sort of protectionist trade organization.

wunferall wrote: »

The EU isn't a country BTW, much though some wish it was.
Look at the info in your link and you'll see it says very clearly " The US is the country from which the UK earns the most through trade. Exports to the US in 2016 were worth £100 billion, more than twice as much as exports to any other country. "
It then goes on to say " The largest trade deficit is with Germany. In 2016 the UK imported £75 billion in goods and services from Germany, and sold £49 billion. "

The EU is a single entity for trading purposes, especially when it comes to goods. Once we get stuff over the channel we are able to sell it anywhere in the EU (and EEA) with no barriers. So for the purposes of comparing the impact of Brexit, it make sense to look at our trade with the EU. And my point on quoting the trade stats was to show that in the event of a sudden WTO-style Brexit, if there is disruption in trade in the short term, the UK is in a weaker position than the EU overall.

However, you are right that our trade in the EU varies by country. Germany is the biggest individual partner and runs a deficit with us. Individually, it has the most to lose in the EU if trade with the UK is disrupted. Yet look at Germany's negotiating position - they don't seem that worried right now while the UK still cannot make up its mind what to do.

wunferall wrote: »

Why aren't they being fair and buying more from the UK since we're club members?
Why shouldn't the UK be free to choose where it buys what it wants from?

The EU doesn't impose trade quotas. If we produced more of what other countries wanted, they would buy more. But we want cheap food from Spain, cars from Germany. It's not about being "fair", it's about producing goods and services that people want to buy at a price they are prepared to pay.

And we can buy what we want from where, with the exception of EU regulations on things like US beef treated with growth hormones. If TTIP was in effect, we could have bought US cars and clothes more cheaply, but Trump didn't want us to (although he is talking a bit more positively now).

wunferall wrote: »

Do not confuse the very obvious stalling or denial of what the UK public voted for with the speed at which the country is able to negotiate trade deals.
As for our politicians, well I think we're in the early stages of a major upheaval in UK politics and I have more faith in the country's abilities to trade than I do in it's willingness to uphold the stated will of it's people.

Any future trade deals will be negotiated by the same set of civil servants that we have now with some of the politicians we have. There is no pool of clever trade negotiators waiting to be unleashed from a secret store somewhere. If there is an upheaval in politics coming (not unwelcome btw), where is it coming from? Where is the UK's Macron and "En Marche"?

Just for clarity's sake, I do believe in the ability of UK companies to trade anywhere once they have had time to adapt. What I am less confident about is the UK government's ability to quickly negotiate a set of effective trade deals in the event of a sudden Brexit on WTO rules.

wunferall wrote: »

We are entering the fourth industrial revolution.
With our (yes, even recent) historical inventiveness and ingenuity the UK is far better-placed to be at the forefont of this era than the lumbering, indecisive behemoth which the EU has evolved into.

We are indeed entering a new age based on intellectual capital, AI and biotech (probably green energy as well). There are many opportunities. But this is where leaver logic just gets silly. This constant harping on about the EU holding back British inventiveness is just meaningless and unsubtantiated in reality.

I've worked in the software and technology industries for 30 years. I've been involved with companies developing AI. Never has any EU regulation or EU practice been an issue in developing new software or technology for any of the companies I have been involved in. It's up to individual companies to develop the ideas and technology and there's nothing to stop UK companies doing this in or out of the EU.

Don't get me wrong, overall I agree that the UK will be OK outside the EU in the long term. I voted remain but accept we should leave. My concern is that doing so in a sudden and disorderly manner will cause unnecessary pain in the UK in the short term (the next 3 to 5 years) which we could avoid if we followed a phased transition approach to give all UK industries the time to get ready for the new reality of life outside the EU.

wunferall wrote: »

To use your own phraseology, if you honestly believe that the EU "are well equipped to lead us into these new sunlit uplands, you have more faith in them than me"

I never said that and I don't believe it. I am cynical about anyone's ability to resolve this situation quickly. That's why I believe the May approach to Brexit is sensible and pragmatic. But it appears very few other people do.