Cont: Brexit: Now What? 9 Below Zero

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Officially the transition period can only be extended once. If it's to be extended beyond December 31st 2020, then the UK is required to request the extension by July 2020. Given that Boris campaigned on a manifesto of NOT extending the transition period, it's vanishingly unlikely that the UK will make such a request by July.

If we get to November/December 2020, and a trade deal is not ready, then there's the possibility that the UK and/or the EU would wish to implement some emergency extension of the transition period. It's very unclear at the moment how this might happen - either side or both sides might prefer a no-deal exit.

Most likely outcome, in my opinion, is that there will be a lightweight trade deal with zero tariffs in place. Discussions about various matters will be ongoing into 2021 and beyond but the official (fudged) line from both sides will be that Brexit has been successfully completed.
 
ceptimus said:
Officially the transition period can only be extended once. If it's to be extended beyond December 31st 2020, then the UK is required to request the extension by July 2020. Given that Boris campaigned on a manifesto of NOT extending the transition period, it's vanishingly unlikely that the UK will make such a request by July.

If we get to November/December 2020, and a trade deal is not ready, then there's the possibility that the UK and/or the EU would wish to implement some emergency extension of the transition period. It's very unclear at the moment how this might happen - either side or both sides might prefer a no-deal exit.

Most likely outcome, in my opinion, is that there will be a lightweight trade deal with zero tariffs in place. Discussions about various matters will be ongoing into 2021 and beyond but the official (fudged) line from both sides will be that Brexit has been successfully completed.
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I think your analysis is entirely correct.

Some people seem to think that a) Brexit will signal some sort of abject collapse of the UK economy*, b) the trade deals that will (or will not) be implemented post-Brexit will necessarily greatly disadvantage the UK, c) there's effectively no way in which the Withdrawal Agreement can be sorted in any meaningful way by the end of 2020, and d) Johnson's agenda is in effect to deliberately kybosh the Withdrawal Agreement so that we leave with a de facto no-deal Brexit.

But there seems to be an ongoing blindness to the fact that low-friction low-tariff (or tariff-free) reciprocating trade deals are exactly as much in the interests of the UK's key trade partners as they are of the UK itself. In addition, because the UK has never been within the Euro, there have had to be informal trade deals in place between the UK and the Eurozone in any case. And also, even trade deals with important non-EU countries need not be ridiculously arduous to sort out, since a) there are already trade deals in place between those countries and the EU, and b) those existing trade deals already ringfence the UK's participation in them, owing to our separate currency.

As ever, we'll see what happens on 1st January 2021. What I do know is that this issue, just like so many other Brexit-related issues, has served as shiny ammunition for anti-Brexit and/or anti-Conservative-government commentators to predict some form of catastrophe. Colo(u)r me surprised......


* I am in little doubt that the UK's economy will be a worse shape after Brexit, compared with what it would have been were the UK remaining within the EU. And I'm a strong ideological Remain supporter. But we are where we are. The near-certain reality is that there will be a downward blip in the economy to account for things like rebasing of certain financial instruments/assets, and some slight form of downward adjustment of ongoing GDP forecasts. But against that, there will without doubt be an upward blip caused by the final removal of uncertainty (the markets and the big invetors fear uncertainty/volatility far more than they fear even lowered forecasts). So, IMO, the UK economy will more than survive Brexit: it's just that it won't do quite as well as it would probably have done had we remained.
 
McHrozni said:
The year 2010 was when the largest economic debacle in 70 years took place. Can explain out how significant were the actions of Labour party in bringing about and popping the real estate financial bubble in the US?

McHrozni
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Firstly, this most recent global financial crisis reached its zenith in 2008 and 2009. Not 2010. And secondly, you appear to have either entirely missed or largely disregarded the bit I included within brackets which you quoted in my reply:

"(not all the fault of the Labour admininistration for sure, but a significant part of it was their fault)"

There is no doubt among credible, non-partisan economic analysts/commentators of the significant additional damage caused to the UK economy by the combination of a) the Labour government's huge relaxation of regulations controlling the UK financial services industry; b) the way they allowed the UK economy to overheat - particularly in 2002-2007 - predominantly by embarking on far too much public spending on infrastructire and services, which in turn fuelled far too high a budget deficit (when, in those comparatively prosperous years, the budget should have been balanced or even showing a small surplus); and c) carrying out a quite phenomenal number of PFI-financed infrastructure projects, which could - at the point of delivery - be presented as "shiny new things for nothing!" (as they were not financed by public capex), but which almost immediately started creating a large (and still growing) ongoing "lease back" and "facilities management" burden onto the public finances.

Yes, of course the global nature of the crisis (largely catalysed, as you say, by the collapse of the house of cards that was the US sub-prime mortgage market) was the precipitant cause of the UK's own part in that crisis. And to a certain degree, it can also be said that the Labour government's light-touch approach to financial services regulation was purely in line with global trends and was therefore necessary in order to keep the UK financial services industry globally competitive (a factor which the UK financial services industry made sure it communicated loudly and frequently to Labour....). But there's plenty of evidence (and plenty of contemporaneous analysis/reaction) that Labour went too far in its deregulation blitz. And the public overspending and PFI-gorging can be laid solely at the feet of the Labour administration of the day.

As Liam Byrne's "amusing" note said...........
 
LondonJohn said:
But there seems to be an ongoing blindness to the fact that low-friction low-tariff (or tariff-free) reciprocating trade deals are exactly as much in the interests of the UK's key trade partners as they are of the UK itself. In addition, because the UK has never been within the Euro, there have had to be informal trade deals in place between the UK and the Eurozone in any case. And also, even trade deals with important non-EU countries need not be ridiculously arduous to sort out, since a) there are already trade deals in place between those countries and the EU, and b) those existing trade deals already ringfence the UK's participation in them, owing to our separate currency.
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I don't think it is true that things exactly cancel themselves out regarding the interests of the UK and the EU regarding trade.

There are industries and countries within the EU that may see this as an opportunity for protectionist tariffs or some other kinds of barriers (stricter regulations for non-EU countries, for example). I would think agriculture is a prime candidate for that.

Beyond trading goods, there are also services such as legal services that may be badly affected. Employment contracts, for example, that use British legal firms may not be legal in the EU anymore, insurance, driving licenses, etc... This could affect British firms that involve travel and transportation throughout the EU.

Then there is also the problem of warehousing. A lot of firms that are based in the UK, and export items across the world, need to use Europe-based warehouses. If red-tape increases the hassle of spreading out their operations between the UK and Europe, some firms may just move permanently within the EU.

Will the UK economy completely collapse? No. But it is not a done deal that it will be completely fine on the basis that the EU wouldn't dare...
 
Of course with a lightweight trade deal with zero tariffs will come the EU request that the UK does not flood the EU market with cheap stuff from other countries and thus keeps to EU regulations.
The horrible restrictive regulations that deny UK freedoms so much they had to leave the EU.
 
I expect that much of the argument will be about how the UK will adhere to EU standards on employee rights, environmental standards, and state subsidies after we leave.

The UK will offer to guarantee existing standards as a minimum, but the EU will want ongoing compliance - so if they alter their rules five years from now they'll want the UK to be forced to do the same. This continuing control after we've left, and the asymettric nature of it ( if the UK raises its standards, say on animal welfare, then the EU won't have to follow) will be unacceptable to the UK.

Also, the EU will demand continued access to all UK fishing waters - and they won't want to pay for it. This will be an emotional issue for many UK fishing communities which were strong leave supporters, and will likely dominate the news out of all proportion to the economic value of the fishing industry.
 
angrysoba said:
I don't think it is true that things exactly cancel themselves out regarding the interests of the UK and the EU regarding trade.

There are industries and countries within the EU that may see this as an opportunity for protectionist tariffs or some other kinds of barriers (stricter regulations for non-EU countries, for example). I would think agriculture is a prime candidate for that.

Beyond trading goods, there are also services such as legal services that may be badly affected. Employment contracts, for example, that use British legal firms may not be legal in the EU anymore, insurance, driving licenses, etc... This could affect British firms that involve travel and transportation throughout the EU.

Then there is also the problem of warehousing. A lot of firms that are based in the UK, and export items across the world, need to use Europe-based warehouses. If red-tape increases the hassle of spreading out their operations between the UK and Europe, some firms may just move permanently within the EU.

Will the UK economy completely collapse? No. But it is not a done deal that it will be completely fine on the basis that the EU wouldn't dare...
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But where you say (entirely correctly) that "there are industries and countries within the EU that may see this as an opportunity for protectionist tariffs or some other kinds of barriers", one could equally argue that the same is true in the other direction. There are certainly levers that both "sides" could use against the other. And what I'd argue is that therefore it would be in the interests of both "sides" to simply avoid holding a gun to each other's heads.
 
LondonJohn said:
But where you say (entirely correctly) that "there are industries and countries within the EU that may see this as an opportunity for protectionist tariffs or some other kinds of barriers", one could equally argue that the same is true in the other direction.
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It could happen, but this is where the EU's comparatively larger market, and established trade deals with third-party countries, counts in their favour. The UK will clearly have less leverage than the EU here.

LondonJohn said:
There are certainly levers that both "sides" could use against the other. And what I'd argue is that therefore it would be in the interests of both "sides" to simply avoid holding a gun to each other's heads.
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I would only hope that the two sides would do what is in the interests of both, but frankly, as I believe Brexit to be damaging to both sides, we cannot really rely on such an approach.
 
LondonJohn said:
I mean...... apart from all the other significant exaggerations, distortions, and evidence-free assertions within this post of yours.....
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You're confusion you opinions with reality. Again.

LondonJohn said:
"Other countries are becoming unwilling to be further drawn into the collapse of the UK."
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Yes.

LondonJohn said:
The collapse of the UK? You seriously believe that crap?!
Yes. Unlike you, and others, I'm not blinded by the "impossibility" of the UK collapsing. I'm willing to look at facts and evidence, even when they have unpalatable consequences.
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Give it a try.

LondonJohn said:
But what I don't believe for one moment - and what not one of the serious economic projections predicts - is that leaving the EU will precipitate "the collapse of the UK".
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Sigh. The situation isn't just economic, it's political and social as well. The UK, in the sense of the Union, is already fragmenting. Support for, and belief in, the political situation is disappearing, quite justifiably given the lies and manipulation of the current regime and it's supporters.

LondonJohn said:
That's the stuff of polemic and deliberate agitprop - either from those within the Remain camp who are still seeking to overturn the referendum outcome, or from those who intend to scaremonger against Johnson's Conservative government at all costs.
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Oh good grief... There's a Conspiracy Theory section you know.

LondonJohn said:
"The collapse of the UK"? Credibility: shot.
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And why is you opinion of me of any consequence? Merely because you're scared to face the unpalatable consequences of the current situation resorting to puerile attempts to denigrate others merely reflects on your own blindness to reality.
 
The Don said:
Well that was the government's claim, but it appears that if they were genuinely trying to repair the public finances, they were going about it entirely the wrong way.

OTOH they have done an exceptionally good job at increasing poverty, accelerating income and wealth inequality, reducing taxes for the most wealthy whilst at the same time hamstringing the UK economy.

They have singularly failed to meet their stated objective whilst at the same time delivering huge benefits for their backers - I suppose it could be coincidental. :rolleyes:
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The economic reality is that austerity doesn't work; it's an ideologically tainted holdover from the laissez faire days. As Quiggan put it:
John Quiggin said:
Ideas like austerity that should have been decently buried long ago continue to wreak havoc throughout the world, and most notably in Europe.
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McHrozni said:
Because you don't believe it or is there a more compelling reason?

Both Ireland and Scotland have been asking the question in polls and both are within the poll margin of error.

https://en.wikipedia.org/wiki/Opinion_polling_on_Scottish_independence
https://en.wikipedia.org/wiki/United_Ireland

If all you have against this is your opinion, I'm afraid I'll have to ask for more evidence in the matter.

McHrozni
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It would be ironically amusing if Ireland unified, as scheduled, in 2024 while the USA descended into anarchy.
However I think I'd forgo the amusement if the consequences could be avoided.
 
Giordano said:
Added: increased government spending to climb out of recession was employed by Obama early in his first term and the majority of the evidence is that it helped. The current expansion of the USA economy under Trump is primarily driven by an enormous increase in the deficit to power large tax cuts to the wealthy.
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Indeed, however due to Republican obstruction it wasn't enough. Many of teh problems could have been avoided by more intervention.
 
Lukraak_Sisser said:
Of course with a lightweight trade deal with zero tariffs will come the EU request that the UK does not flood the EU market with cheap stuff from other countries and thus keeps to EU regulations.
The horrible restrictive regulations that deny UK freedoms so much they had to leave the EU.
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Oh it'll be a precondition. Basically the UK can adhere to EU standards and rules or not. In the latter case there will be no concessions.
 
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