Brexit - or Article 50: the Phoenix!

[harpo_72]

Here's a screengrab of the article. Looks like I was wrong, it's even better than I thought. We'll actually be £641 billion better off. Bonus. It must be true as it's printed in the paper. That's how it works isn't it?....

View attachment 26040

To be clear - I'm not a supporter of Brexit and don't believe these figures one little bit.

Does look a bit hopeful, why would we be getting any tariffs? Would they not cancel themselves out?

 

[harpo_72]

The RAND organisation did a report showing 7 different versions of Brexit. The only one that showed the UK better off with a No Deal scenario was one where they signed a TTIP deal with the US. A TTIP deal with the US would be way worse than staying the EU.

What the report doesn't show is the impact of new deals signed with countries outside the EU. Will it fill the trade gap? Just short or exceed?

Taking a punt at the options of trading with the EU; tariffs could, to a large extent be balanced. That balance could see tariff monies passed on to companies, as subsidies, that were seeing the pain. The reduction in UK tariffs on goods coming from the rest of the world might see some cost reductions on materials. And selling to non-EU countries would be easier. But there are WTO rules about applying different tariff rates to different countries.

HOWEVER, the one thing no one has talked about is quotas. If the EU decided to apply quota limits... you'd have to guess the impact.

Quotas .. I think a Japan would be your example. Cost of living is high there, they are self sufficient and don’t necessarily comply.

 

[ColchesterFC]

Does look a bit hopeful, why would we be getting any tariffs? Would they not cancel themselves out?

As I understand we would put tariffs on any goods that we bought from the EU and vice versa. We buy more from the EU than they buy from us so we would receive more in tariffs than we would be paying to the EU. In 2017 we exported goods/services worth £274 billion to the EU and imported goods/services worth £341 billion - so £67 billion deficit in trade. Ignoring services that actually rises to a £95 billion deficit for goods alone, as we had a £28 billion surplus on trade in services.

I have no idea how Minford arrived at the totals he did and as I said previously I don't believe them. But if it came down to WTO rules then purely looking at tariffs applied to goods we would almost certainly be better off and the EU would almost certainly be worse off. How much better off/worse off each side would be I have no idea and there is also the fact that the EU loss would be spread over 27 countries so easier to absorb. I've put "almost certainly" as tariffs would vary on different goods so it isn't a straight forward calculation.

Figures taken from this article - https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7851

 

[Blue in Munich]

Quotas .. I think a Japan would be your example. Cost of living is high there, they are self sufficient and don’t necessarily comply.

Comply with what; comply with regulations, like certain EU members don't if it doesn't suit them?

 

[harpo_72]

As I understand we would put tariffs on any goods that we bought from the EU and vice versa. We buy more from the EU than they buy from us so we would receive more in tariffs than we would be paying to the EU. In 2017 we exported goods/services worth £274 billion to the EU and imported goods/services worth £341 billion - so £67 billion deficit in trade. Ignoring services that actually rises to a £95 billion deficit for goods alone, as we had a £28 billion surplus on trade in services.

I have no idea how Minford arrived at the totals he did and as I said previously I don't believe them. But if it came down to WTO rules then purely looking at tariffs applied to goods we would almost certainly be better off and the EU would almost certainly be worse off. How much better off/worse off each side would be I have no idea and there is also the fact that the EU loss would be spread over 27 countries so easier to absorb. I've put "almost certainly" as tariffs would vary on different goods so it isn't a straight forward calculation.

Figures taken from this article - https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7851

I don’t understand how we would be better off. We import more therefore the tariffs have a greater impact. To export we need to price to overcome the tariffs on our products. This would mean lower wages and those elements that are supported by taxes would suffer more, or tax would be added to other things or increased to compensate.. so in the end we the working public are worse off. Those that don’t work are not immune either as their support networks will be degraded.

 

[Hacker Khan]

And there's the problem, you quantify a reply as 'credible, so that would be credible as viewed from your blinkered viewpoint. Let me suggest an alternative strategy. You read through some opposing articles and just try to pretty please find some scraps that could just possibly be seen as advantageous or having a modicum of potential to improve some peoples lifestyles. Go on, you know it makes sense.

I meant credible as in not from people with a vested interest or from both the extreme ends of the argument.

 

[harpo_72]

Comply with what; comply with regulations, like certain EU members don't if it doesn't suit them?

So other EU countries don’t comply.. and what are the consequences? Japan is free to do as they please but some things are not acceptable such as whaling..

 

[Doon frae Troon]

Pointless...TV show
https://wingsoverscotland.com/all-show-no-game/#comments

 

[Hobbit]

Comply with what; comply with regulations, like certain EU members don't if it doesn't suit them?

So other EU countries don’t comply.. and what are the consequences? Japan is free to do as they please but some things are not acceptable such as whaling..

Believe me, Spain does not comply with many regs. Employment law out here is a joke, a huge joke. You want evidence? Log onto any Facebook page, both Spanish and Expat. Agriculture... hahahahaha. Environmental laws? Seriously? The worst beach in Europe is 20 miles from us. They've been fined, and not paid, and fined and not paid, and fined again. And as for the smells, occasionally, as you pass various industrial centres it is horrendous.

The UK is wonderful in many respects, apart from the weather, the cost of living and the massive overcrowding. So many people complain about immigration in the UK, whilst so many others ask whats the problem. Try living somewhere where it isn't crowded. Its bliss!!

I don’t understand how we would be better off. We import more therefore the tariffs have a greater impact. To export we need to price to overcome the tariffs on our products. This would mean lower wages and those elements that are supported by taxes would suffer more, or tax would be added to other things or increased to compensate.. so in the end we the working public are worse off. Those that don’t work are not immune either as their support networks will be degraded.

Are you sure you've got that the right way round? Do you understand tariffs?

We import more from the EU, therefore the tariffs the UK could apply are greater than the tariffs that could be applied. Simple maths. The goods we import from the rest of the world are subject to EU tariffs and quotas. Imagine something that costs £10 now, including a 20%(£2) tariff. All of a sudden its £2 cheaper if the EU tariff is removed. And those goods currently imported from the rest of the world, currently under tariff and quota rules, are probably subject to a reciprocal tariff on what we export to them. Imagine if they dropped the tariffs because we did. All of a sudden they want more of our goods.

You haven't thought out the global impact of tariffs very well have you?

 

[Foxholer]

I meant credible as in not from people with a vested interest or from both the extreme ends of the argument.

Check the Treasury report out then. It stated that in all scenarios UK GDP was expected to rise.

And Treasury wouldn't be biased, surely!!

 

[Hobbit]

I meant credible as in not from people with a vested interest or from both the extreme ends of the argument.

And you don't have a vested interest in the argument? I love the way people from both sides think they are the reasonable ones. To either side, the opposite aren't reasonable.

 

[SocketRocket]

If the UK leaves the EU and trades under WTO rules it is free to set tarrifs on imports. Currently we are compelled to use EU tariffs which are quite high and used to protect EU industries from cheaper world prices. The UK could set all or many tarrifs to zero if they wish and this would lower the prices of many imported goods including food. We would of course have to pay tariffs on goods we export where there are no free trade agreements. WTO states that whatever tariffs you set must be the same to all other members. Under this system the EU could not set punishment tariffs to the UK without using the same to all other countries

 

[Blue in Munich]

So other EU countries don’t comply.. and what are the consequences? Japan is free to do as they please but some things are not acceptable such as whaling..

As unpalatable as the whaling is, it's not what I'm referring to and I'm sure you realised that, which is disappointing.

 

[Foxholer]

...Are you sure you've got that the right way round? Do you understand tariffs?

We import more from the EU, therefore the tariffs the UK could apply are greater than the tariffs that could be applied. Simple maths. The goods we import from the rest of the world are subject to EU tariffs and quotas. Imagine something that costs £10 now, including a 20%(£2) tariff. All of a sudden its £2 cheaper if the EU tariff is removed. And those goods currently imported from the rest of the world, currently under tariff and quota rules, are probably subject to a reciprocal tariff on what we export to them. Imagine if they dropped the tariffs because we did. All of a sudden they want more of our goods.

You haven't thought out the global impact of tariffs very well have you?

As I understand it, the agreement May is trying to 'sell' requires that UK's tariffs would never be lower than EU ones! That's one of the reasons why I believe it's not a good deal!

Btw. The arithmetic in the italicised text is wrong. Either it's a 25% tariff (based on £8 non-tariff value..total £10) or 'plus' a 20% (£2) tariff!

 

[Hacker Khan]

And you don't have a vested interest in the argument? I love the way people from both sides think they are the reasonable ones. To either side, the opposite aren't reasonable.

I'm not denying everyone has a bias to believe the reports that tally with their views, but I'm not the one writing reports. I was asking for reports from relatively unbiased sources on the impact of Brexit. I can then decide if I think the report is a conspiracy by the government or if they put forwards a sensible argument one way or the other.

 

[harpo_72]

Are you sure you've got that the right way round? Do you understand tariffs?

We import more from the EU, therefore the tariffs the UK could apply are greater than the tariffs that could be applied. Simple maths. The goods we import from the rest of the world are subject to EU tariffs and quotas. Imagine something that costs £10 now, including a 20%(£2) tariff. All of a sudden its £2 cheaper if the EU tariff is removed. And those goods currently imported from the rest of the world, currently under tariff and quota rules, are probably subject to a reciprocal tariff on what we export to them. Imagine if they dropped the tariffs because we did. All of a sudden they want more of our goods.

You haven't thought out the global impact of tariffs very well have you?

Okay, my understanding is this, we charge tariffs on imports ... these get paid by those exporting to us. But hey that’s lost money like any form of interest or tax. So how do they make it back or make it as minimal loss as possible? They charge it to the consumer.. that would be us, indirectly. Looks like life got a bit more expensive to me.
Now let’s look the other way, I want to sell competively in another market, but to do so I need to pay a tariff. So I really want to sell but I have a huge on cost, so my goods look expensive in that market and I struggle to get a share. I need to sell, to get traction in the market I need to drop my prices. So how am I going to do that ? Well firstly I will reduce all my overheads and guess what that is wages .. so i’ll cut those. So once again the public will be the loser.
The tariff stuff only works if your a strong market and something every one wants .. we have our fishing waters, we have advanced technologies (in low volume) but our precious raw materials?? What are they ?
We are the 5 th biggest consumer economy ... means we are a bunch of shoppers!
I think I understand tariffs.

I also understand that one way quota restrictions being deployed by Japan and their market protection with different standards help them.

 

[Hobbit]

Okay, my understanding is this, we charge tariffs on imports ... these get paid by those exporting to us. But hey that’s lost money like any form of interest or tax. So how do they make it back or make it as minimal loss as possible? They charge it to the consumer.. that would be us, indirectly. Looks like life got a bit more expensive to me.
Now let’s look the other way, I want to sell competively in another market, but to do so I need to pay a tariff. So I really want to sell but I have a huge on cost, so my goods look expensive in that market and I struggle to get a share. I need to sell, to get traction in the market I need to drop my prices. So how am I going to do that ? Well firstly I will reduce all my overheads and guess what that is wages .. so i’ll cut those. So once again the public will be the loser.
The tariff stuff only works if your a strong market and something every one wants .. we have our fishing waters, we have advanced technologies (in low volume) but our precious raw materials?? What are they ?
We are the 5 th biggest consumer economy ... means we are a bunch of shoppers!
I think I understand tariffs.

I also understand that one way quota restrictions being deployed by Japan and their market protection with different standards help them.

Your premise starts with "we charge tariffs." The reality is we charge tariffs that the EU instruct all the EU member states to charge, and some of those tariffs and quotas are quite punitive. Some of those tariffs are on raw materials, not just finished products. If the UK, post-Brexit, didn't charge those tariffs the consumer wins. Those Non-EU countries who were suffering tariffs reciprocate, and British exporters to those countries are then selling cheaper but at no extra cost or loss as the tariff they had to pay isn't there anymore. That's the win on global trade, and an area for potential growth in trading areas that are also seeing the biggest growth now.

However, 47% of the UK's exports goes to the EU. The EU, as a protectionist organisation, imposes tariffs on UK products. Its harder for the UK exporters to remain competitive in the EU. But what is sold into the EU becomes more expensive for the EU consumers. How can the UK mitigate, and maybe even support manufacturers? It becomes a trade war. They charge tariffs, the UK charge tariffs. The Uk exports, say £100 worth of goods and experiences £10 worth of tariffs. The reciprocal rate on the EU, who exports more to the UK and than the UK to the EU, sees £150 worth of goods experiencing £15 worth of tariffs. The UK govt then uses the tariffs its collected to subsidise UK industries.

What else can the UK govt do to help UK industries? Corporation Tax. Reducing business tax has always been a mantra from the Tories. Reduce corporation tax and you have reduced the business costs, which can also offset the tariffs. Reduce the corporation tax and you will see global investment come to the UK. That's how Ireland got out of its recession, and the EU have fought long and hard with Ireland, and the companies that have benefited, through the ECJ.

The EU fear a tax haven on their borders. Have a read through May's Deal. There's clauses in there, obviously penned by the EU, that severely limit the freedom to set corporation tax. And a Tory PM wants the UK to sign up to them?!?!?!? I can't believe May wants that deal. Its appalling. But there again, if it fails, as is predicted, I expect another referendum and Remain to win. She gets what she wanted right from the outset. The UK stays in the EU.

All the gloom and doom forecasts are, in the main, fairly accurate. However, not one of them has or can predict what benefit can come from opening up to cheaper global trade. Pretty much all of them have taken into account EU tariffs but none of them have taken into account reciprocal tariff impositions by the UK.

The Truth? There'll be a dip. Will it be as bad or as long as forecast? I very much doubt it. Will there be benefits by opening up to global trade? Absolutely.

 

[Old Skier]

Nice balance to the argument but balance has no part in this thread

 

[harpo_72]

Your premise starts with "we charge tariffs." The reality is we charge tariffs that the EU instruct all the EU member states to charge, and some of those tariffs and quotas are quite punitive. Some of those tariffs are on raw materials, not just finished products. If the UK, post-Brexit, didn't charge those tariffs the consumer wins. Those Non-EU countries who were suffering tariffs reciprocate, and British exporters to those countries are then selling cheaper but at no extra cost or loss as the tariff they had to pay isn't there anymore. That's the win on global trade, and an area for potential growth in trading areas that are also seeing the biggest growth now.

However, 47% of the UK's exports goes to the EU. The EU, as a protectionist organisation, imposes tariffs on UK products. Its harder for the UK exporters to remain competitive in the EU. But what is sold into the EU becomes more expensive for the EU consumers. How can the UK mitigate, and maybe even support manufacturers? It becomes a trade war. They charge tariffs, the UK charge tariffs. The Uk exports, say £100 worth of goods and experiences £10 worth of tariffs. The reciprocal rate on the EU, who exports more to the UK and than the UK to the EU, sees £150 worth of goods experiencing £15 worth of tariffs. The UK govt then uses the tariffs its collected to subsidise UK industries.

What else can the UK govt do to help UK industries? Corporation Tax. Reducing business tax has always been a mantra from the Tories. Reduce corporation tax and you have reduced the business costs, which can also offset the tariffs. Reduce the corporation tax and you will see global investment come to the UK. That's how Ireland got out of its recession, and the EU have fought long and hard with Ireland, and the companies that have benefited, through the ECJ.

The EU fear a tax haven on their borders. Have a read through May's Deal. There's clauses in there, obviously penned by the EU, that severely limit the freedom to set corporation tax. And a Tory PM wants the UK to sign up to them?!?!?!? I can't believe May wants that deal. Its appalling. But there again, if it fails, as is predicted, I expect another referendum and Remain to win. She gets what she wanted right from the outset. The UK stays in the EU.

All the gloom and doom forecasts are, in the main, fairly accurate. However, not one of them has or can predict what benefit can come from opening up to cheaper global trade. Pretty much all of them have taken into account EU tariffs but none of them have taken into account reciprocal tariff impositions by the UK.

The Truth? There'll be a dip. Will it be as bad or as long as forecast? I very much doubt it. Will there be benefits by opening up to global trade? Absolutely.

I accept it’s happening now, we are used to it, but as you state at the very end we suffer but for an unknown length of time ... we as a nation have not prepared, we don’t have the most wanted commodity whether that be a raw material or a technology. So ultimately we are gambling, playing poker with a pretty poor hand .. it’s stronger than others but it isn’t a winner.
If I offered you the opportunity to kill off the welfare state, nhs, and all pension commitements private and public sector ... you would be wealthier because take home pay would be greater, would you take that risk.. the risk of being ill and not being able to afford the hospital bills, the risk of poverty with no support? Just because there is perceived opportunity of great wealth?
May’s deal is rubbish ... but no deal is too big of a risk .. remain, partake and take ownership by forcing the Spanish to clean their beaches and factories up.. or whatever floats your boat, but accept life is good as is, there has been a pretty good balance in Europe for 50 years.
Turn the uk to tax haven .. really ? Who will come ? What other sell out options will there be ? Sovereignty will be meaningless when we all work for rich multinationals who will switch the lights off when it suits them.
Before you know it the criminals will be investing ( London is pretty rife already) any morals we had will slip down the plug hole we will be chasing money at the expense of our fellow man/ woman ..

 

[Hobbit]

I accept it’s happening now, we are used to it, but as you state at the very end we suffer but for an unknown length of time ... we as a nation have not prepared, we don’t have the most wanted commodity whether that be a raw material or a technology. So ultimately we are gambling, playing poker with a pretty poor hand .. it’s stronger than others but it isn’t a winner.
If I offered you the opportunity to kill off the welfare state, nhs, and all pension commitements private and public sector ... you would be wealthier because take home pay would be greater, would you take that risk.. the risk of being ill and not being able to afford the hospital bills, the risk of poverty with no support? Just because there is perceived opportunity of great wealth?
May’s deal is rubbish ... but no deal is too big of a risk .. remain, partake and take ownership by forcing the Spanish to clean their beaches and factories up.. or whatever floats your boat, but accept life is good as is, there has been a pretty good balance in Europe for 50 years.
Turn the uk to tax haven .. really ? Who will come ? What other sell out options will there be ? Sovereignty will be meaningless when we all work for rich multinationals who will switch the lights off when it suits them.
Before you know it the criminals will be investing ( London is pretty rife already) any morals we had will slip down the plug hole we will be chasing money at the expense of our fellow man/ woman ..

Mmm, what started out between us as a discussion on tariffs has become a discussion on playing poker, stopping commitments to the welfare state/NHS and criminals investing in London. The UK will become Sodom and Gomorrah - really? A bit of a hysterical imagination? You missed out the unicorns bit.

You failed to acknowledge the potential reciprocity of tariff impositions to balance trade. You failed to acknowledge what can be done by changing Corporate Tax, even though Ireland has very clearly shown what can be done - criminals haven't flocked there by the way. And as for no one will want to operate in a country of lower taxation... oh please, at least acknowledge that businesses do want to reduce their costs, and taxation is a no benefits cost.

Life is good, and I like the status quo. I don't want change, or Brexit, but at least I acknowledge there is another way that doesn't include the hysteria some Remainers seem to be infected with.