The consequence thread (Brexit)

[unbeliever]

Go and try and buy - not from the current inventory that we have but try and buy from overseas ANYTHING from crude oil, electricity from Nederlands or France, iron ore from Sweden, semiconductors from Israel, tyre rubber from Malaysia, strawberries from Morocco, maize from the USA, and tell me that we've not just lost 20% of our wealth.

 

 

That's the thing isn't it. The extra costs apply only to imports. Hence the effect is mitigated.

[tinfoilhat]

That's the thing isn't it. The extra costs apply only to imports. Hence the effect is mitigated.

 

And of course things we make from imports.

[unbeliever]

And of course things we make from imports.

 

But our exports are cheaper and therefore more attractive to our foreign customers.

 

I do not suggest that this wipes out the effect. I merely object to this being portrayed as a real loss of 20% of our wealth.

 

I would be surprised if either RPI inflation goes anywhere near 5% or if growth goes negative.

Edited October 17, 2016 by unbeliever

[andyofborg]

But our exports are cheaper and therefore more attractive to our foreign customers.

 

I do not suggest that this wipes out the effect. I merely object to this being portrayed as a real loss of 20% of our wealth.

 

I would be surprised if either RPI inflation goes anywhere near 5% or if growth goes negative.

 

except that pretty much everything we export, apart from marmite, is made from things we import which are now more expensive.

 

i very much doubt inflation will be allowed to reach 5%, the bank of england may be sanguine about 3% inflation but anything higher is likely to trigger an interest rate rise and that will cause one or two other problems.

 

as the effect of the collapse of sterling feeds through to the economy, growth is very likely to fall. what happens in the new year will be important, pray for a mild winter.

 

---------- Post added 17-10-2016 at 11:17 ----------

 

on the subject of imports and exports something from today's guardian live blog, which was taken from somewhere else:

 

Bumpers for some Bentley Bentaygas, for example, are made in Europe but then sent to Crewe for inspection before then going to Germany for specialist painting. After that, they return to the UK for final assembly.

 

Another example of the interconnectedness of the supply chain is a fuel injector for diesel lorries manufactured by the US component maker Delphi.

 

This part uses steel from Europe which is machined in the UK before going to Germany for special heat treatment. The injector is then assembled at Delphi’s UK plant in Stonehouse, Gloucestershire, before being sold on to truckmakers based in Sweden, France or Germany.

 

If the resulting truck is sold into the UK market, the component or materials used in it will have crossed the Channel five times before the lorry is ever driven by the customer. If tariffs are applied at each stage, the cost could be substantial.

 

https://www.theguardian.com/business/live/2016/oct/17/pound-under-pressure-brexit-fears-economy-business-live

 

the single market has produced a cross EU supply chain, without very low or zero tariff access to that market large chunks of our manufacturing base is going to suffer.

[unbeliever]

on the subject of imports and exports something from today's guardian live blog, which was taken from somewhere else:

 

Bumpers for some Bentley Bentaygas, for example, are made in Europe but then sent to Crewe for inspection before then going to Germany for specialist painting. After that, they return to the UK for final assembly.

 

Another example of the interconnectedness of the supply chain is a fuel injector for diesel lorries manufactured by the US component maker Delphi.

 

This part uses steel from Europe which is machined in the UK before going to Germany for special heat treatment. The injector is then assembled at Delphi’s UK plant in Stonehouse, Gloucestershire, before being sold on to truckmakers based in Sweden, France or Germany.

 

If the resulting truck is sold into the UK market, the component or materials used in it will have crossed the Channel five times before the lorry is ever driven by the customer. If tariffs are applied at each stage, the cost could be substantial.

 

https://www.theguardian.com/business/live/2016/oct/17/pound-under-pressure-brexit-fears-economy-business-live

 

the single market has produced a cross EU supply chain, without very low or zero tariff access to that market large chunks of our manufacturing base is going to suffer.

 

 

This is false. You don't pay tariffs on temporary exports. I know this first hand from shipping things temporarily to Switzerland with staff going on secondment.

[andyofborg]

This is false. You don't pay tariffs on temporary exports. I know this first hand from shipping things temporarily to Switzerland with staff going on secondment.

 

they aren't temporary exports though

 

something is being imported, having something done to it, and then exported

 

you might be able to do a deal where a multinational can get away without tariffs for something shipped between its factories in different countries but that would be an administrative nightmare to manage and verify and the opportunities for fraud would be considerable

[unbeliever]

they aren't temporary exports though

 

something is being imported, having something done to it, and then exported

 

you might be able to do a deal where a multinational can get away without tariffs for something shipped between its factories in different countries but that would be an administrative nightmare to manage and verify and the opportunities for fraud would be considerable

 

"Inspection" counts as "having something done to it"?

Tell me this sort of thing doesn't go in moving in and out of the EU's internal market already? You're describing modern globalised trade, not a feature of the internal market.

[Obelix]

This is false. You don't pay tariffs on temporary exports. I know this first hand from shipping things temporarily to Switzerland with staff going on secondment.

 

Goes to bang head against a wall.

 

1. They are not temporary. They are sold on from one company to another.

 

2. The EU can if it wants impose tariffs on even temporary exports under the "we don't give a stuff" and will hurt the UK for being dicks and "pour encourager les autres not to leave"

 

---------- Post added 17-10-2016 at 11:31 ----------

 

"Inspection" counts as "having something done to it"?

Tell me this sort of thing doesn't go in moving in and out of the EU's internal market already? You're describing modern globalised trade, not a feature of the internal market.

 

If I buy some steel from British steel and import it to Germany to have it made into injectors, and then sell it to somewhere else to be hardened and they then sell that to Delphi who then sell it to Volvo....

 

Wheres the "temporary" nature? It leaves each company enver to come back again. Theres nothing temporary about any of that.

[L00b]

except that pretty much everything we export, apart from marmite, is made from things we import which are now more expensive.

Stop it with your Project Fear already.

i very much doubt inflation will be allowed to reach 5%, the bank of england may be sanguine about 3% inflation but anything higher is likely to trigger an interest rate rise and that will cause one or two other problems.

From comments reported in today's press (The Independent, on about Hammond stonewalling a policy of work visas for EU migrants), about recent Brexit-related Cabinet meetings involving Hunt, Hammond, May and others, it sounds like May was expecting Carney to be doing that already by now, and is a tad unhappy with him.

 

So yes, Mark Carney, the man who single handedly-steadied the ship on 24 June whilst politicians were imploding with self-doubt all around, and continues to do so every time the pro-Brexit appointees shoot their political mouths before their economical brains, is now to blame for the markets' reaction to the Leave vote and May's policy choices to date.

 

I suppose I shouldn't be surprised. He's an immigrant worker after all.

 

Saying that though, now I don't expect that Hammond will be far behind Carney in the 'burn him' stakes, for having the temerity of suggesting that perhaps the UK should initiate negotiations with the EU first, and keep the possibility of working visas for EU migrants as a negotiation position. Just give it a few weeks.

 

Actually scrap that, as I see that some elements of the Leave side (a Tory Councillor no less) now want Parliament to amend the Treason Felony Act 1848, so that anyone holding an anti-Brexit stance can be deemed a traitor. Must be the same lot who were after the lists (and got them).

 

Can someone open the windows? It smells in here

Edited October 17, 2016 by L00b

[Blackbeard]

This is false. You don't pay tariffs on temporary exports. I know this first hand from shipping things temporarily to Switzerland with staff going on secondment.

 

It is over 30 years since I was shipping scientific equipment around Europe and CERN and ESA were a special cases.

Try this link for advice.

https://espace.cern.ch/test-uklo/atCERN/shipping/Pages/Procedures.aspx