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Thread: Brexit tower thread (aka General brexit discussion)

  1. #21
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    Quote Originally Posted by Stevlin View Post
    ............FOOD will be much cheaper - a gain for both the taxpayer, and those on low income.
    Now that's an interesting claim — just how do you see that happening?

    *The UK trade gap in food, feed and drink was £22.5 billion in 2016:

    • In 2016 the value of UK exports of food, feed and drink (FFD) were £20.1 billion.
    • In 2016 the value of UK imports of food, feed and drink were £42.6 billion.

    https://www.gov.uk/government/public...t-2017-summary

    **Origin of food consumed in the UK in 2016 were:

    • Home grown 49%
    • EU 30%
    • Africa 5%
    • North America 4%
    • South America 4%
    • Asia 4%
    • Rest of Europe 2%
    • Australasia 1%

    **https://www.gov.uk/government/public...-and-uk-supply

    It is likely going to be difficult for the UK to divert all its exports for home consumption and/or persuade the rest of the world to make up the shortfall...
    If a democracy cannot change its mind, it ceases to be a democracy — DD. The poster also reserves the right to amend or completely change any opinions he has posted at any time...

  2. #22
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    Quote Originally Posted by Patman Post View Post

    It is likely going to be difficult for the UK to divert all its exports for home consumption and/or persuade the rest of the world to make up the shortfall...
    Why? - why wouldnt other countries wish to sell us food?

  3. #23
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    Quote Originally Posted by Stevlin View Post
    Really? Somewhat like the doomsday report predicated on the referendum result of Brexit??Did they also include for a trade deal with India, and the other emerging economies which are rapidly outstripping that of the EU???
    yes it does
    "... the analysis assumes in all scenarios that a trade deal with the US will be concluded, and that it would benefit GDP by about 0.2% in the long term.

    Trade deals with other non-EU countries and blocs, such as China, India, Australia, the Gulf countries, and the nations of Southeast Asia would add, in total, a further 0.1% to 0.4% to GDP over the long term..."
    Nonsense - and there is no reason why those current FTAs shouldn't continue either - as the UK were also individual signatories to those Agreements - as were all EU member states.
    See above
    if the deals were to continue as is (because the deal is actually signed between the UK and S.Korea their first difficulty is the deal assumes the UK is in the EU. Therefore there are sections where it refers to "the EU Commission" or "EU parliament" doing things like setting quotas or investigating breaches.

    I assume that a post Brexit UK would not be happy with various parts of its UK/S.Korea deal being administered by EU bodies?

    In which case the deal needs to be updated at the very least to replace the text "EU [whatever]" with "UK[whatever]" and that would require the counter party (e.g. S.Korea) to agree.

    Assuming they agree to a straight "find and replace" we still aren't done.

    The Rules of Origin (RoO) mean that in order for S.Korea to take advantage of the lower than WTO tariffs a certain % if the goods (let's say cars) needs to be from either S.Korea or the EU. Usually 50% or more. This is to stop cheap Indian or Chinese cars being shipped to S.Korea, having a wing mirror screwed on and then re-exported as a "S.Korean" car to take advantage of the lower tariffs.

    Similarly the UK goods face the same restrictions to qualify for lower tariffs into S.Korea.

    However for UK goods, parts from the EU are counted as "UK" for the calculation.

    Once we are no longer in the EU, EU parts will not count as "UK" parts. That makes the % of "made in UK" lower. The SMMT calculated at best 40% of a car can be made in the UK, and probably lower. This is not enough to count as "made in UK" and qualify for the lower tariff.

    This means a simple "cut and paste" job on the existing deals would leave the other country's exporters free to qualify for lower tariffs into the UK whilst UK exporters would struggle to qualify and be stuck in WTO terms.

    The other parties know this which is why they are not adverse to a "cut and paste job" but have signaled that if we want to modify the text further to get around this (for example by including EU parts as UK) the UK will need to give up more concessions.

    -no deal has yet been agreed, yet you already find fault with it!!
    you are saying "no reason why those current FTAs shouldn't continue" which means the text of those deals is known and the problems I have outlined have been identified.

    Of course if we negotiate a new deal from scratch there is no telling what would be in those deals (which allows us to fantasize that they will only have up sides) but by definition they would not be the same deals as are currently in place and therefore could not be continuations of those deals.
    And still growing - at a faster rate than the sclerotic EU...and is only one of the global economies that is outstripping that of the EU.
    The EU as an average is growing on pace with the US (the only other developed economy of the same size).

    Yes India is growing fast, but it's economy is roughly 1/7th the size of the EU. If it kept growing at its phenomenal current 7% it would still take 25 years to get to where the EU is today (by which time the EU would have doubled even at a paltry 2% growth). It is highly unlikely India will achieve consistent 7% growth.

    Even if India became the size of the US or China it is still far away and no negotiations or will of the people can change that.

    Despite the fact that the US is as large as the entire EU, we still only manage 1/4 the business than with the EU. In fact we export more to Germany and France than we do to the US despite their combined economies being less than a 3rd of the US economy.

  4. #24
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    Quote Originally Posted by Stevlin View Post
    There is nothing wrong with the CONSUMER paying for the goods , much fairer than being subsidised by the taxpayer - and as stated before - it IS much fairer for the Audi buyer to fund the expensive purchaser him/herself
    that is a valid point of view about fairness but the money will be raised from the UK not, as you claim, the EU. German, French and Italian producers will not suffer other than a small drop in sales as some UK consumers put off purchases. They will not have to pay a penny (or cent) to HMRC.

    - and even better, because despite what you claim, FOOD will be much cheaper - a gain for both the taxpayer, and those on low income.
    If the government carries out it's intention to replicate the EU tariff schedule as "the UK tariff schedule" then food prices will rise, for reasons I have laid out. We will have to charge an average tariff of around 20% on EU produce, which is currently 30% or more of what we consume. The tariff on nonEU foodstuffs will remain the same (because the UK will be applying the EU tariffs that it currently applies).

    So we will go from paying 20% tariffs on 50% of our imported food other non EU stuff) and 50% tariff free, to paying 20% on all our imported food.

    Prices will rise.

    The only way food prices could fall is if the UK either struck trade deals with countries to reduce those tariffs (which would take time) or it could instantly unilaterally cut it's import tariffs (which the government has said it won't do, but influential back be here like JRM are advocating)

    Unilaterally cutting our food import tariffs would reduce the price of "world" sourced foodstuffs, but has two caveats.

    1. The food regulations would need to be altered to allow "world" agricultural products into the UK. For example US beef is not produced to current UK standards because of the use of GM feed and hormones banned in the UK. The UK could alter these regulations but as current UK/EU regs are amongst the highest in the world it would be a reduction in food standards and there are public concerns to address.

    2. Removing the import tariffs unilaterally would remove an important bargaining chip in future trade negotiations. We would no longer have the "carrot" of lower tariffs to offer in exchange to partners as they would already be getting them ("why buy the cow if you get the milk for free")

    3. The reduction of tariff protections and/or the reduction of standard protection would have (and this is from Minford) a strongly negative effect on UK manufacturing and agriculture.

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  6. #25
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    Quote Originally Posted by El Jefe View Post
    Why? - why wouldnt other countries wish to sell us food?
    Because many potential food suppliers already have markets, and others are also feeding themselves. Remember, the UK dumped its traditional suppliers when it joined the EEC, after decades of dictating the prices it would pay. Can't see they'll be likely to drop everything to feed the UK. Plus creating extra demand is unlikely to keep prices down, as was the claim I was addressing...
    If a democracy cannot change its mind, it ceases to be a democracy — DD. The poster also reserves the right to amend or completely change any opinions he has posted at any time...

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    Quote Originally Posted by El Jefe View Post
    Not sure why you think food prices would be less considering that the EU external tariff barrier keeps food prices about 17% above world food prices



    But we are barely growing our exports to the EU so in 15 years time they will still only be worth around 12% of GDP. So are you seriously trying to tell us that you believe that the UK will lose 2/3rds of our exports to the EU?

    Care to give a straight answer?
    I've given a comprehensive answer. Your "unbelievable we would lose 2/3 of EU trade" statement is based on a misunderstanding of the figures. No we would not lose 2/3 of EU trade.

    We would lose in the median case (5% lower GDP after 15 years) about 1% growth per year.

    So if our growth was predicted to grow by an average of 2% per year if we remained it is predicted that it would be 1%.

    The worst case reported (which still assumes trade deals with, US, India etc) would see an average growth loss of 1.5% each year for 15 years land probably beyond).

    So if we would have been growing at a reasonable 2.5% we will probably only be growing at tepid 1% in the worst case (which isn't the truly worst case).

  8. #27
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    Quote Originally Posted by El Jefe View Post
    Why? - why wouldnt other countries wish to sell us food?
    We could buy food from anywhere.

    The point many Brexiteers miss is that tariffs are only part of the issue.

    NTBs like food regulations, crash safety regulations etc are much more important.

    To illustrate I will switch to cars, but the same applies to food.

    Right now the cheapest new car in the UK is around £6k. The Tata Nano sold in India is £1700! So what is keeping UK consumers from getting these lower prices? Is it those protectionist EU tariffs on Indian cars? No, they are 10% just like for everyone else. Even with shipping, the tariff and VAT a Nano could be comfortably under £3k.

    What's keeping UK consumers from buying these cheap cars? The fact they don't come near complying with EU safety regulations. The nano scored zero stars in the Euro Safety tests. They concluded there was a high probability of serious injuries to the occupants in the event of a crash.

    That will not change if the tariffs are removed. The only way would be to redesign the Nano to comply with EU safety regs, by which time it would cost around £6k.

    ...back to food, US meat doesn't comply with UK/EU food regulations and because of the way their regulations are set up it is difficult to make it comply.

    Rice grown in India often uses a pesticide banned in the EU. If they switch to an alternative method, it will cost more.

    If we want to lower food costs we not only have the reduce our tariffs but also lower our standards.

    Of course in the EU we have zero tariffs on EU products which automatically meet our standards (as they are their standards).

  9. #28
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    Quote Originally Posted by Patman Post View Post
    Because many potential food suppliers already have markets, and others are also feeding themselves. Remember, the UK dumped its traditional suppliers when it joined the EEC, after decades of dictating the prices it would pay. Can't see they'll be likely to drop everything to feed the UK. Plus creating extra demand is unlikely to keep prices down, as was the claim I was addressing...
    That would only apply if there were a fixed level of food output in the world, which there isnt. Farmers in Australia, New Zealand, Africa, America etc etc, would be more than willing to sell us their products. You have to remember that the CAP and the high import tariffs into the EU are not there to make food cheaper but to keep prices high so as to protect the incomes of European farmers.

  10. #29
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    Quote Originally Posted by beelbeeb View Post
    I've given a comprehensive answer. Your "unbelievable we would lose 2/3 of EU trade" statement is based on a misunderstanding of the figures. No we would not lose 2/3 of EU trade.

    We would lose in the median case (5% lower GDP after 15 years) about 1% growth per year.

    So if our growth was predicted to grow by an average of 2% per year if we remained it is predicted that it would be 1%.

    The worst case reported (which still assumes trade deals with, US, India etc) would see an average growth loss of 1.5% each year for 15 years land probably beyond).

    So if we would have been growing at a reasonable 2.5% we will probably only be growing at tepid 1% in the worst case (which isn't the truly worst case).
    Sorry you have that all wrong. An 8% drop over 15 years equates to a 0.5% drop in growth per year - a 2% drop equates to 0.13%.

    Considering that these forecasters got their projection for growth just 6 months into the future wrong are we really supposed to believe that they are able to forecast accurately the UKś growth rate in 15 times to within 0.13%.

  11. #30
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    Quote Originally Posted by beelbeeb View Post
    We could buy food from anywhere.

    The point many Brexiteers miss is that tariffs are only part of the issue.

    NTBs like food regulations, crash safety regulations etc are much more important.

    To illustrate I will switch to cars, but the same applies to food.

    Right now the cheapest new car in the UK is around £6k. The Tata Nano sold in India is £1700! So what is keeping UK consumers from getting these lower prices? Is it those protectionist EU tariffs on Indian cars? No, they are 10% just like for everyone else. Even with shipping, the tariff and VAT a Nano could be comfortably under £3k.

    What's keeping UK consumers from buying these cheap cars? The fact they don't come near complying with EU safety regulations. The nano scored zero stars in the Euro Safety tests. They concluded there was a high probability of serious injuries to the occupants in the event of a crash.

    That will not change if the tariffs are removed. The only way would be to redesign the Nano to comply with EU safety regs, by which time it would cost around £6k.

    ...back to food, US meat doesn't comply with UK/EU food regulations and because of the way their regulations are set up it is difficult to make it comply.

    Rice grown in India often uses a pesticide banned in the EU. If they switch to an alternative method, it will cost more.

    If we want to lower food costs we not only have the reduce our tariffs but also lower our standards.

    Of course in the EU we have zero tariffs on EU products which automatically meet our standards (as they are their standards).
    Beelbeeb just to say while you may feel you are being overwhelmed by the amount of brexiters on this forum arguing against what you are saying , just to say much of it is both interesting and informative , a lot i am completely unaware of and thanks for enlightening both myself and im sure many others who are taking time to read and digest your eloquent posts.
    "Pour l’Angleterre … il n’y a pas d’alliance qui tienne, ni de traité qui vaille, ni la vérité qui compte." Charles De Gaulle

    Alba gu brath An rud is fhiach a ghabhail, 's fhiach e iarraidh

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