The Consequences of Brexit (part 2)

[Jacktari]

Yes. I've told you this multiple times. Even amongst those who voted remain there is an righteous expectation that the will of the people will be done.

More than they want their choice enacted, they want the government to do as the people instruct.

There's masses of polling on this. You can't just will it away.

 

The English people will not turn out in droves on this matter, don't kid yourself.

 

As long as there is food in the oven, beer in the pub, and something on the telly, they will not give a monkeys.

They might grumble a bit, but when they cant get their week in Spain during the summer, the brexiters had better watch it then.

 

This is not important enough to the average person to turn out with pitchforks and burn down Parliament.

[unbeliever]

The English people will not turn out in droves on this matter, don't kid yourself.

 

As long as there is food in the oven, beer in the pub, and something on the telly, they will not give a monkeys.

They might grumble a bit, but when they cant get their week in Spain during the summer, the brexiters had better watch it then.

 

This is not important enough to the average person to turn out with pitchforks and burn down Parliament.

 

There is little support for the Lords as it is currently constituted anyway. For an unelected chamber to override the will of the people after it has been upheld by the elected chamber will disgust even the least politically-minded.

Mayne people are disinterested in politics in general, but they'll not be cheated or betrayed on general principle.

If the Lords loses the support of the people, they lose the support of the commons, if they lose that then the existing crowd will be out on their ear before you can say "proportionally elected senate".

Edited February 8, 2017 by unbeliever

[Flexo]

Civitas have done the maths:

http://www.civitas.org.uk/content/files/potentialpostbrexittariffcostsforeuuktrade.pdf

Cost to EU of no-deal WTO Brexit: £12.9bn in tariffs,

Cost to UK: £5.2bn in tariffs.

 

Presenting their imaginary £50bn leaving bill looks a bit daft in this context. Just taking a punt so they can try to rescue Greece for the 18th time i suspect.

 

That's back-to-front.

 

The actual quote at the start of the document is:

 

Our analysis shows that if the UK leaves the EU without a trade deal UK exporters could face the potential impact of £5.2 billion in tariffs on goods being sold to the EU. However, EU exporters will also face £12.9 billion in tariffs on goods coming to the UK.

 

Tariffs are paid by the importer not the exporter. It's just another cost to getting goods on the shelf.

 

So....

 

UK consumers will be paying £12.9bn to the UK gov in import duties.

 

Consumers spread through the rest of the Eu will be paying £5.2bn.

 

That is the worst deal ever. The deal is a total disaster. Very bad!

[unbeliever]

That's back-to-front.

 

The actual quote at the start of the document is:

 

 

 

Tariffs are paid by the importer not the exporter. It's just another cost to getting goods on the shelf.

 

So....

 

UK consumers will be paying £12.9bn to the UK gov in import duties.

 

Consumers spread through the rest of the Eu will be paying £5.2bn.

 

That is the worst deal ever. The deal is a total disaster. Very bad!

 

 

 

No that's not how it works at all.

There is a competitive market in pretty much all the tariffed goods that the EU will want to sell to us post-Brexit. They can't just increase their prices to pay for the tariffs as they have competitors and can only sell at the prices the market will allow. Their competitors who were already paying tariffs or not and operating at a lower cost or a lower profit to stay competitive will still be there.

The only way to hold your share in a market under these circumstances is to reduce your profits or your costs.

This is not my opinion, read up on the subject.

Avoiding these extra costs will be a priority for EU governments.

[L00b]

No that's not how it works at all.

There is a competitive market in pretty much all the tariffed goods that the EU will want to sell to us post-Brexit. They can't just increase their prices to pay for the tariffs as they have competitors and can only sell at the prices the market will allow. Their competitors who were already paying tariffs or not and operating at a lower cost or a lower profit to stay competitive will still be there.

The only way to hold your share in a market under these circumstances is to reduce your profits or your costs.

This is not my opinion, read up on the subject.

Avoiding these extra costs will be a priority for EU governments.

You didn't get my point about elasticity of demand earlier on, did you?

 

Your international trade thinking is still far too nativist I'm afraid: for EU importers, tariffed UK supply can be replaced by non-tariffed RoW supply (e.g. from freshly-FTA'd Canada, amongst so many others); likewise for EU exporters and tariffed vs non-tariffed demand.

 

A point I made long, long ago: doesn't matter if you slap 10.5% on a Merc windshield in the UK, UK punters with the means (or the credit line, or the company leaee) will still buy it. Now, slap a 10,5% on a Nissan in Germany, and well, GM alternatives (known to you Brits as Vauxhalls: 10.5% on them too here) might appeal more...the elasticity of demand ain't quite the same between a luxury German car and a middle-of-the-road Euro-spec hatch, is it?

 

Now look at services, which are still more at the commodity end of the elasticity scale, and well...

Edited February 8, 2017 by L00b
Typos - bloody iPad

[unbeliever]

You didn't get my point about elasticity of demand earlier on, did you?

 

Your international trade thinking is still far too nativist I'm afraid: for EU importers, tariffed UK supply can be replaced by non-tariffed RoW supply (e.g. from freshly-FTA'd Canada, amongst so many others); likewise for EU exporters and tariffed vs non-tariffed demand.

 

A point I made long, long ago: doesn't matter if you slap 10.5% on a Merc windshield in the UK, UK punters with the means (or the credit line, or the company leaee) will still buy it. Now, slap a 10,5% on a Nissan in Germany, and well, GM alternatives (known to you Brits as Vauxhalls: 10.5% on them too here) might appeal more...the elasticity of demand ain't quite the same between a luxury German car and a middle-of-the-road Euro-spec hatch, is it?

 

Now look at services, which are still more at the commodity end of the elasticity scale, and well...

 

 

Yes there are exceptions. But the net effect is clear.

I find it unlikely that you are unaware of this.

 

You also skip over completely my point earlier that the EU cannot easily replace the services provided for it by the City. Certainly not without incurring substantial additional costs.

[Flexo]

No that's not how it works at all.

 

Yes, they are import tariffs. They are paid by the importer.

 

There is a competitive market in pretty much all the tariffed goods that the EU will want to sell to us post-Brexit. They can't just increase their prices to pay for the tariffs as they have competitors and can only sell at the prices the market will allow. Their competitors who were already paying tariffs or not and operating at a lower cost or a lower profit to stay competitive will still be there.

The only way to hold your share in a market under these circumstances is to reduce your profits or your costs.

 

Now let's see.... who would be able to sell to the UK without import tariffs...... UK producers! No-one else because we would no longer have the benefit of the EU's collaboratively-agreed trade agreements.

 

Bad news for UK producers who sell things to the EU. Now they will have to cut their costs to make up for the import tariffs, else be at a disadvantage to producers in the rest of the EU.

 

Good news for UK producers selling things to the UK market. Bad news for the EU producers who compete with them... but only those ones.

 

Where we import stuff from the EU that isn't made here, those things just get more expensive.

 

Avoiding these extra costs will be a priority for EU governments.

 

Trading with no costs.... like one big single market.

 

We'd need to all agree on common standards and regulations, else nations would race to the bottom to undercut each other's standards. The regulations will keep costs down for producers because they only have one standard to meet for one big single market, not lots of national variations.

 

We'd need a venue for the nations to come together and work out those regulations. We'd need a civil service to write them down and take care of the boring stuff.

 

We'd need some sort of court to resolve disputes between members of that market.

 

You know.... I think I can imagine how it could be done.

 

What a tremendous deal!

[altus]

Your international trade thinking is still far too nativist I'm afraid: for EU importers, tariffed UK supply can be replaced by non-tariffed RoW supply (e.g. from freshly-FTA'd Canada, amongst so many others); likewise for EU exporters and tariffed vs non-tariffed demand.

Tariffs will also mean international companies who based their EU facilities in the UK and sell more of their produce to the EU27 (think the likes of Nissan) will have a big incentive to move to mainland Europe. Whilst this would mean more tariffs for us and less for the EU27, economically that's not going to come close to making up for the jobs moving from the UK to the EU27.

[L00b]

Yes there are exceptions. But the net effect is clear.

I find it unlikely that you are unaware of this.

The net effect of what?

 

Tariffs amounting to 0.11% of the EU's external trade if defaulting to WTO MFN terms?

 

I'm considering the issue matter-of-factly, not ideologically.

 

Boy, are you in for a rude awakening.

You also skip over completely my point earlier that the EU cannot easily replace the services provided for it by the City. Certainly not without incurring substantial additional costs.

I didn't. The City's expertise is being bled, death of a thousand cuts-style. May has spoken, ideology it is, the City boardrooms have drawn their conclusions.

 

And it's not so much Paris or Frankfurt or Dublin you want to be afraid of, or angry at: try Wall Street. Now don't be surprised: it's not as if Trump has been coy about protectionist policies and 'MAGA'. US banks are heeding: they're cancelling UK expansions, hedging/minimising EU relocations, and developing NY.

 

As you were so fond of 'sovereignty', just watch what happens when the US and the UK sit down to do their FTA, to the UK banking industry having to defer to US regulatory oversight.

Edited February 8, 2017 by L00b

[chalga]

https://www.theguardian.com/business/2016/may/25/wto-eu-uk-consumers-trade-deals

 

 

The watchdog for global trade has said leaving the European Union would push back trade barriers at a cost of £9bn a year to British consumers.

 

World Trade Organisation boss, Roberto Azevedo, said Britain would be forced to renegotiate trade deals with all 161 WTO members in an unprecedented move that would be akin to joining from scratch. The impact of new tariffs in overseas markets would also be a burden for UK businesses, adding a further £5.5bn to the costs of trade, he said.

 

 

“The consumer in the UK will have to pay those duties,” Azevedo said. “The UK is not in a position to decide ‘I’m not charging duties here’. That is impossible. That is illegal.”

 

His comments came as ratings agency Standard & Poor’s said sterling’s status as a reserve currency would be jeopardised by a decision to quit the EU as central banks around the world would sell their holdings in favour of more secure currencies.

 

S&P said countries with a reserve currency earned considerable income from heavy trading on foreign exchange markets and enjoyed lower interest charges on overseas debt. “A departure from the EU could put sterling’s reserve status at risk by deterring foreign direct investment and other capital inflows into the UK,” it said, adding that because last year’s current account deficit was the world’s second-highest, any decline in capital inflows would weaken the pound and hit GDP growth.