The Consequences of Brexit (part 2)

[apelike]

From the EU trade commissioner. Made very clear very quickly after the referendum:

 

http://www.bbc.co.uk/news/uk-politics-eu-referendum-36678222

 

The exit process is not for negotiating trade deals.

 

She may be trade commissioner but she is wrong. She is correct that there are two processes but one is triggering A50 and then the other is negotiating on what terms we eventually leave on. A50 give the UK a clear mandate to negotiate a deal and conclude arrangements to leave. In the mean time we will still be a member for those two years so she is actually talking out of her backside. She states that any trade deals should not start until we leave not that they cannot start. This show just how scared the EU are of us leaving it.

 

Quote:

"Asked whether sticking to such a process wouldn't harm the economies of all EU members, Ms Malmstrom replied: "Yes, but the vote was very clear."

[I1L2T3]

She may be trade commissioner but she is wrong. She is correct that there are two processes but one is triggering A50 and then the other is negotiating on what terms we eventually leave on. A50 give the UK a clear mandate to negotiate a deal and conclude arrangements to leave. In the mean time we will still be a member for those two years so she is actually talking out of her backside. She states that any trade deals should not start until we leave not that they cannot start. This show just how scared the EU are of us leaving it.

 

Quote:

"Asked whether sticking to such a process wouldn't harm the economies of all EU members, Ms Malmstrom replied: "Yes, but the vote was very clear."

 

It would be easier with some form of continuity deal, say remaining part of the customs union or single market. There is no feasible way in which a whole new free trade deal could be agreed and ratified (potentially by all 27 member states) in the 2 year time frame.

 

A continuity arrangement is the most sensible.

[Justin Smith]

She may be trade commissioner but she is wrong. She is correct that there are two processes but one is triggering A50 and then the other is negotiating on what terms we eventually leave on. A50 give the UK a clear mandate to negotiate a deal and conclude arrangements to leave. In the mean time we will still be a member for those two years so she is actually talking out of her backside. She states that any trade deals should not start until we leave not that they cannot start. This show just how scared the EU are of us leaving it.

 

Quote:

"Asked whether sticking to such a process wouldn't harm the economies of all EU members, Ms Malmstrom replied: "Yes, but the vote was very clear." [implying she doesn`t actually mean it, or it`s illogical and therefore will not happen]

 

This is typical of what the Leave campaign said during the campaign and continue to say now. it sound all very logical on the surface, but, if anyone thinks about it to any depth, it`s totally illogical.

So, I`ll say it again, the EU will not give us a deal as good as we had before, in fact, more likely, it`ll be a deal no where near as good as we had before (as EU members), even if it harms their economies to a certain extent, and the reasons for that include :

 

1 = The EU are upset with us, we (well marginally over 50% of the UK electorate) have said "we don`t want to be in your club".

 

2 = If the EU give the UK a deal better or even the same as the UK had when it was in the EU many, or all, the other members will then say, why don`t we leave and try the same thing ? Anyone who thinks the contrary is being totally illogical.

 

Thus, the UK government must have made some pretty extensive promises to Nissan, because Nissan said they`d only invest in the UK if the trade circumstances were no worse than they were before. The fact the Trade minister said the UK government told Nissan they "wanted tariff free trade" is saying precisely nothing at all. Nissan know that and wouldn`t accept such empty words without some sort of guarantee. Probably either continuing membership of the single market or the UK government will subsidise any tariffs out of taxpayers pockets. That is to say no more for the NHS at all, it`s going in trade subsidies to the EU (effectively). I wonder if that would have swung required 4% of those who voted Leave to have given a different result ? I would have thought so.

Edited October 30, 2016 by Justin Smith

[I1L2T3]

Leading Brexit supporter Nadhim Zahawi thinks we should continue to contribute to the EU budget after leaving:

 

"That is why we should pay a proportion of the £8.5bn that we will save through leaving back into its budget. We should help bridge some of the EU’s funding gap, but only on the condition that the EU delivers our demand of providing British businesses with tariff-free access to the single market."

 

https://www.theguardian.com/politics/2016/oct/30/nissans-post-brexit-deal-could-lead-to-colossal-bills-for-taxpayers

 

This looks more like the Swiss model every day. Soft Brexit.

[apelike]

 

Thus, the UK government must have made some pretty extensive promises to Nissan, because Nissan said they`d only invest in the UK if the trade circumstances were no worse than they were before. The fact the Trade minister said the UK government told Nissan they "wanted tariff free trade" is saying precisely nothing at all. Nissan know that and wouldn`t accept such empty words without some sort of guarantee.

 

Why do you find it hard to accept what the government have said so far in that they have not guaranteed anything and have promised Nissan nothing other than support. It is not in Nissan's interest to pull out of the UK now as it would actually cost them a fortune to relocate elsewhere which means time lost and the production of their new models would be very delayed. So far it seems they have tried to blackmail this government and have failed.

 

PS The EU did not give us a deal, don't forget we paid for it by being a member.

Edited October 30, 2016 by apelike

[NigelFargate]

I have noticed that 'remainers' seem to be changing their tune with regard to the likely outcome of the Brexit negotiations. Now that their doom-laden prophecies concerning the immediate impacts of the referendum result have turned to dust, they no longer seem to arguing that the only viable alternative for the UK is membership of the Single European Market, with all that implies.

 

Now their great white hope is that the UK will be forced into a customs union with the EU. This would mean that the EU would set the UK's tariffs and that no UK trade deals with other countries would be allowed without the express approval of the EU (which would be unlikely to be forthcoming). It would mean that the UK would still be shackled to the EU and would be forced to accept the ruling of the European Court of Justice in relation to trade matters (which cover broad areas of policy).

 

Turkey of course has a (partial) customs union with the EU. But this customs union is viewed by both sides as a stage on the way to full Turkish EU membership, a trajectory which is hardly similar to the UK's current aspirations. Moreover, it is a very one-sided (partial) customs union, because Turkey basically has to accept whatever tariffs the EU decides on and is subject to the rulings of the ECJ in the areas covered by the remit of the agreement.

 

However, what some of the more knowledgeable and fair-minded 'remainers' are beginning to realise is that the EU by no means holds all the best cards in the forthcoming negotiations. For example, 22 out of the 27 member states currently have positive trade balances with the UK (not least Germany, the EU's largest and most powerful member state, which has huge trade surpluses with the UK in both manufacturing and services). Imposing EU high tariffs on the UK would be a classic example of cutting off one's nose to spite one's face and would could well trigger a major, and perhaps fatal, crisis in the eurozone. Thankfully, more sensible and realistic voices in the EU are beginning to be heard.

[unbeliever]

I have noticed that 'remainers' seem to be changing their tune with regard to the likely outcome of the Brexit negotiations. Now that their doom-laden prophecies concerning the immediate impacts of the referendum result have turned to dust, they no longer seem to arguing that the only viable alternative for the UK is membership of the Single European Market, with all that implies.

 

Now their great white hope is that the UK will be forced into a customs union with the EU. This would mean that the EU would set the UK's tariffs and that no UK trade deals with other countries would be allowed without the express approval of the EU (which would be unlikely to be forthcoming). It would mean that the UK would still be shackled to the EU and would be forced to accept the ruling of the European Court of Justice in relation to trade matters (which cover broad areas of policy).

 

Turkey of course has a (partial) customs union with the EU. But this customs union is viewed by both sides as a stage on the way to full Turkish EU membership, a trajectory which is hardly similar to the UK's current aspirations. Moreover, it is a very one-sided (partial) customs union, because Turkey basically has to accept whatever tariffs the EU decides on and is subject to the rulings of the ECJ in the areas covered by the remit of the agreement.

 

However, what some of the more knowledgeable and fair-minded 'remainers' are beginning to realise is that the EU by no means holds all the best cards in the forthcoming negotiations. For example, 22 out of the 27 member states currently have positive trade balances with the UK (not least Germany, the EU's largest and most powerful member state, which has huge trade surpluses with the UK in both manufacturing and services). Imposing EU high tariffs on the UK would be a classic example of cutting off one's nose to spite one's face and would could well trigger a major, and perhaps fatal, crisis in the eurozone. Thankfully, more sensible and realistic voices in the EU are beginning to be heard.

 

That's a pretty good summary in my view.

[El Cid]

However, what some of the more knowledgeable and fair-minded 'remainers' are beginning to realise is that the EU by no means holds all the best cards in the forthcoming negotiations. For example, 22 out of the 27 member states currently have positive trade balances with the UK (not least Germany, the EU's largest and most powerful member state, which has huge trade surpluses with the UK in both manufacturing and services). Imposing EU high tariffs on the UK would be a classic example of cutting off one's nose to spite one's face and would could well trigger a major, and perhaps fatal, crisis in the eurozone. Thankfully, more sensible and realistic voices in the EU are beginning to be heard.

 

Well the UK has just told Nissan that they will not suffer from any tariffs, so that advantage is nonexistent.

 

The FTSE 250, is performing poorly at the moment.

 

Why we should be looking at the FTSE 250 and not the FTSE 100 to gauge the impact of Brexit

 

http://www.telegraph.co.uk/business/2016/06/27/why-we-should-be-looking-at-the-ftse-250-and-not-the-ftse-100-to/

[unbeliever]

Well the UK has just told Nissan that they will not suffer from any tariffs, so that advantage is nonexistent.

 

The FTSE 250, is performing poorly at the moment.

 

 

 

http://www.telegraph.co.uk/business/2016/06/27/why-we-should-be-looking-at-the-ftse-250-and-not-the-ftse-100-to/

 

 

Oh right. So when the FTSE 250 drops it's evidence of damage from Brexit, and when it rises it's irrelevant. Nice. Shameless, but nice.

[El Cid]

Oh right. So when the FTSE 250 drops it's evidence of damage from Brexit, and when it rises it's irrelevant. Nice. Shameless, but nice.

 

We should not take any notice of day to day changes, but instead look at the long term. Sterling is low and UK shares are low, even though low sterling can stimulate share prices.

It is either poor policies from our Government, or Brexit, that are having a negative effect, take your pick.