Merged Now What?

[Spanx]

https://hbr.org/2016/08/a-definitive-guide-to-the-brexit-negotiations

I found the above article interesting.

Apologises if it's already been posted.

 

[Amazer]

Of course the author is quite wrong; the budget will be a part of the negotiations. The EU is in a far more delicate situation than many realise. The UK is not the only state disillusioned with the EU structures, and attempting to punish the UK would not only go against article 8 of the treaty of the EU, it would most likely create further divisions within the EU - given the delicate state of the EU today, that would be very unwise. Luckily I believe the EU negotiators will realise this and behave in a manner consistent with article 8 of the treaties that they are bound by.

I fail to see how a deal that 'punishes' the UK would create further divisions within the EU. Which countries do you think are going to object to this and why?

 

[Airfix]

No you would not have to participate to those program. You would have to still finance them through your EEA participation cost if the EU remaining member are not idiot.

In other word you would pay the same amount, but with less freedom to vote and less freedom to participate to existing programs.

Of course there's a cost to being in the EEA, I never said there wasn't.

But the cost is far cheaper than being in the EU because it doesn't involve membership or participation in major EU projects such as the CAP, the CFP, Europol, European Defence Agency, Schengen, the EU battlegroups, the Eurozone...

Try reading the treaty and see what it actually entails.

 

[Airfix]

I fail to see how a deal that 'punishes' the UK would create further divisions within the EU. Which countries do you think are going to object to this and why?

A deal that punishes the UK would result in a trade war, nobody wants a trade war. It would also be illegal under WTO's Most Favoured Nation rules (the EU is a member of the WTO and has to comply with WTO laws just as we have had to comply with EU laws).

According to the ONS there is a trade defict of £77bn.
http://webarchive.nationalarchives....union-to-uk-trade-and-investment-/sty-eu.html

How important is the EU to UK trade?

The UK has traditionally had strong trade links with the EU. Despite changes in the composition of the global economy, the EU in 2014 accounted for 44.6% of UK exports of goods and services, and 53.2% of UK imports of goods and services. However, strong economic growth in many developing economies outside the EU has resulted in non-EU economies growing in importance to UK trade, with the proportion accounted for by the EU falling consistently since 1999, despite the value of EU trade increasing.

Exports from the UK to EU and non-EU countries have grown on average by 3.6% and 6.5% respectively in each year between 1999 and 2014. However, the stronger export growth to non-EU countries has resulted in the proportion of UK exports destined for the EU falling from 54.8% in 1999 to 44.6% in 2014. Growth in the value of UK imports of goods and services from EU and non-EU countries is more comparable, growing on average by 4.7% and 5.5% respectively in each year since 1999.
Faster growth in the value of UK imports compared to exports with the EU has resulted in the UK’s overall trade balance with the EU deteriorating (value of imports exceeding exports), with the trade deficit widening notably, reaching £61.6 billion in 2014 compared with £11.2 billion in 1999, as shown by the black dotted line in Figure 2.

UK trade with the EU is dominated by goods rather than services; in 2014, trade in goods represented close to two-thirds of all UK exports to the EU, and over three-quarters of total UK imports from the EU. Between 1999 and 2014, goods imported by the UK from the EU have risen by 4.9% per year on average, compared to exports which have risen by 2.5% per year, causing the UK’s trade in goods deficit with the EU to rise to £77.0 billion.

Although the UK has historically recorded a trade in goods deficit with the EU, its trade in services balance with the EU is much more favourable, running a surplus in each year since 2005, which reached £15.4 billion in 2014.

UK exports of goods and services to non-EU countries have grown at a faster rate than imports, driven largely by services exports. This has resulted in the UK running an overall trade surplus with non-EU countries (value of exports exceeds imports) over the past three years, which reached £27.8 billion in 2014, as shown by the grey dotted line in Figure 2.

Germany, France, Spain, the Czech Republic and Italy sell a lot of cars to us, they wouldn't be happy if a reciprocated tariff barrier came in. It would harm their exports and could cost jobs.

 

[Archie Gemmill Goal]

The term 'punish' is interesting.

The Leavers seem to be saying we will get favorable terms because it would be wrong to punish us. But not getting favorable terms is not punishment it's merely what the country deserves as one that isn't in the preferential treatment club.

Not having free trade with the EU isn't punishment. It's the default position for any non-Eu country. Some countries have negotiated FTA but the terms of those are based on the strength of your negotiation position and the skill of your negotiators. Getting a crappy deal wouldn't be punishment anymore than getting a good deal would be a reward.

 

[Airfix]

I'm sure it's not in breach of any Forum rule to suggest that

if the EU remaining member are not idiot​

i.e. that member states of the EU are probably not idiotic.

We're not dealing with members states, to do that would require referenda in all their countries.
We are dealing with their representative governments.
And as we've seen from our own British government, representative democracy is not always representative.

But we must above all, negotiate from a position of courtesy and respect and be prepared for compromises.
I don't expect Brexit to give everything that everyone who voted leave wants.

But I do see hope and opportunities that could not exist otherwise, regarding our relationship with the wider world.

This for example:
http://www.ft.com/cms/s/0/ce7cb3c0-4e9b-11e6-9b99-1e1f25294c08.html

It's very interesting that Brazil would like to open trade talks, Embraer is in Brazil, could be a good opportunity for Rolls Royce.

 

[Archie Gemmill Goal]

Germany, France, Spain, the Czech Republic and Italy sell a lot of cars to us, they wouldn't be happy if a reciprocated tariff barrier came in. It would harm their exports and could cost jobs.

They may be happy to exclude Honda, Nissan, Toyota, Mini, from their markets though so swings and roundabouts. Even better if they can persuade one of them to move.

Of course they only get their vote like everyone else so they will also have to persuade countries who don't benefit that they should play along.

 

[Airfix]

The term 'punish' is interesting.

The Leavers seem to be saying we will get favorable terms because it would be wrong to punish us.

Chancellor Merkel has already ruled out any "punishment" of Britain.

It's in the interests of all parties to establish a new free trade deal.

 

[The Don]

Germany, France, Spain, the Czech Republic and Italy sell a lot of cars to us, they wouldn't be happy if a reciprocated tariff barrier came in. It would harm their exports and could cost jobs.

As the link provided by Spanx details, although each of those countries does a significant amount of business with the UK, for none of them is the UK as important as the EU is to the UK. So while it's quite important for each of those countries to have good trading terms with the UK, it's absolutely vital for the UK that we have good trading terms with the EU. Any negotiator worth his or her salt should be able to exploit that asymmetry to their advantage.

The bigger issue from the UK's point of view will be supply chain.

In any case the trade in manufactured goods is the least worrisome and least difficult part, it's the trade in services where being out of the EEA would be most damaging.

 

[The Don]

It's very interesting that Brazil would like to open trade talks, Embraer is in Brazil, could be a good opportunity for Rolls Royce.

I'm not aware of anything (apart from the lack of a suitable product) that prevented Rolls Royce from doing business with Embraer in the past.

 

[Airfix]

They may be happy to exclude Honda, Nissan, Toyota, Mini, from their markets though so swings and roundabouts. Even better if they can persuade one of them to move.

Of course they only get their vote like everyone else so they will also have to persuade countries who don't benefit that they should play along.

We're not debating doom and gloom here, we're discussing ways to make Brexit work. We're not going to start hurting our neighbours as that would hurt ourselves for the reasons you have identified.

I have already said the EEA agreement would make it work.

We're going to be negotiating from a position of respect, looking at whats in our mutual interests and working from that position.

Obviously it's not in our own interests to continue to pay almost £8.5bn a year net at a time of deep domestic budget cuts. So we start there and see what we can get the cost of a tariff free trade deal cut down to.

EFTA manage tariff free trade across their bloc on a budget of about 5m Swiss Francs a year out of a total budget of 21m Swiss Francs.
http://www.efta.int/About-EFTA/EFTA-Budget-748

ASEAN has a total budget of $17m dollars a year.
http://www.ft.com/cms/s/0/cba00b70-9dcf-11e5-8ce1-f6219b685d74.html#axzz4HOgnu3AH

NAFTA facilitates trade between three countries with contributions from Canada $2m USD per year staff varies between 8 and 15 persons, Mexico $1m -$2m USD per year 8-16 staff, USA $1m per year 3 staff members:
Source https://books.google.co.uk/books?id...DWIQ6AEIHjAA#v=onepage&q=nafta budget&f=false

So the facillitation of tariff free trade itself, that doesn't cost much.
Running a Commission, a Parliament, a Common Agricultural Policy with big farm subsidies, that costs a lot.
We're just after a flow of goods and services. We'll almost certainly have to accept the free movement of people to get that, which is why I keep mentioning the EEA agreement which does have free movement, and we'll have to pay a fee to have the tariffs on businesses dropped, but there are ways in which Brexit can work without hurting.

 

[Airfix]

I'm not aware of anything (apart from the lack of a suitable product) that prevented Rolls Royce from doing business with Embraer in the past.

Customs tariffs could have them a less attractive option.

 

[Amazer]

Chancellor Merkel has already ruled out any "punishment" of Britain.

It's in the interests of all parties to establish a new free trade deal.

Of course it's not.

It's in the interest of a group of parties to have a new free trade deal.

Then there is a group of parties for whom it doesn't matter one way or another,

And finally there is a group of parties that stand to gain if there's no free trade deal.

And Merkel is correct I think to state that there should be no "punishment" of Britain. But conversely I also think that there is no need to "reward" Britain for the choice they have made.

 

[Airfix]

16% of EU exports of goods and services are to the UK.
15% of EU exports of goods and services are to the USA.
https://fullfact.org/europe/where-does-eu-export/

There are only three EU countries who sell less to us than we buy from them; Republic of Ireland, Luxembourg and Malta.

 

[Lothian]

There are only three EU countries who sell less to us than we buy from them; Republic of Ireland, Luxembourg and Malta.

Errr......

 

[Spanx]

It's very interesting that Brazil would like to open trade talks, Embraer is in Brazil, could be a good opportunity for Rolls Royce.

Trade deals work both ways, I'm sure Brazil are very keen to sell to us.

It won't just be a deal where they buy from us. There needs to be a balance to create a deal.

 

[Archie Gemmill Goal]

I'm not aware of anything (apart from the lack of a suitable product) that prevented Rolls Royce from doing business with Embraer in the past.

Not sure about engines specifically but Brazil had pretty high import tariffs on engineered goods last I knew. Something like 33% import duty. Of course negotiations for an EU FTA were in progress so this is no gain from Brexit.

 

[catsmate]

No you would not have to participate to those program. You would have to still finance them through your EEA participation cost if the EU remaining member are not idiot.

In other word you would pay the same amount, but with less freedom to vote and less freedom to participate to existing programs.

A minor detail that I'm sure the Leave/libertarian True Believers will ignore.

There's actually so much wrongness jammed into the original statement its hard to know where to start but I think the key thing is the mindset it demonstrates. Us v The EU. It seems fairly typical of Leaver thinking that this is how they see the world.

Exactly. They're simply unable to understand the reality of compromise.

Does Rule 0 still apply on this forum? I guess it is okay to call newcomers to the forum idiots if you disagree with them. At least it validates my view that this discussion is not worth the effort to engage in.

Perhaps you should try reading the post before spouting off?
Or are you merely looking for an excuse to flee the discussion?

 

[catsmate]

I fail to see how a deal that 'punishes' the UK would create further divisions within the EU. Which countries do you think are going to object to this and why?

That'd be all the countries that don't:
1. Object the continual UK attempt to sabotage the EU.
2. Have something to gain from the damage to the UK economy.
3. Have an ongoing dispute with the UK over something.
4. Genuinely like the UK.

I'm sure there's some.

 

[catsmate]

A deal that punishes the UK would result in a trade war, nobody wants a trade war.

Especially not the UK; 44% of UK exports to to the EU, 7% of EU exports go the UK.