EU Referendum

[martin-s]

As a very general example (which may not even be correct in its details), there is currently a 10% import duty on cars made outside of the EU. So, if this were to remain, whilst UK manufactured cars will still be welcomed in the EU, they will be more expensive.

I think my previous answer illustrates why this is nonsense. Germany, the biggest voice in the EU, has a manufacturing led economy, much of which is automotive. They sell a huge number of cars into the UK and wouldn't risk damaging that by making their own exports more expensive.

The simple fact that we import more than we sell should mean that we have a strong hand to play in negotiations.

It is true that we don't produce everything we need in this country, but the EU isn't the only alternative market. If the EU tariffs were uneconomical, we'd simply source things from elsewhere in the world. The EU understand this and while they would likely introduce some tariffs, they are not likely to be uneconomical or a barrier to existing trade.

Emotionally, it hard to give up on income you already have.

 

[BeachLife]

I think my previous answer illustrates why this is nonsense. Germany, the biggest voice in the EU, has a manufacturing led economy, much of which is automotive. They sell a huge number of cars into the UK and wouldn't risk damaging that by making their own exports more expensive.

Again, I don't think it is that straightforward. It is up to us as to whether we try to impose a tariff on imports, in negotiation with them. As they already have a 10% import duty on non EU cars, would they agree to a tariff free deal just with the UK?

A quick look indicates that Germany produced around 5.7m cars in 2015, and 800,000 odd were exported to the UK. The UK produced around 1.6m cars, and 700k were exported to the EU. So we are 20% of their market, they are over 50% of ours (of course that is just Germany, not the EU as a whole) We are no longer a major powerhouse in anything really.

Does that sound like a strong hand? If there is a 10% duty on both sides, some of the 20% that they export to us could be hit, but as they are premium makers who compete with each other, maybe not too much of a hit. The latest BMW/Audi/Porsche/VW would all be 12% more expensive. However over 50% of our car production, which tends to be in less premium brands (think Ford, Nissan, Toyota etc, not the niche manufacturers) is at risk of decreased competition. Do you not think Toyota will think hard about whether to continuing investing in the UK with the uncertainty whilst these deals are being renegotiated? Perhaps the EU would realise that this major investment could be diverted into the EU in the future, by retaining the 10% import duty?

Here is a document by the Society of Motor Manufacturers & Traders, they were worrying about this 2 years ago!

There are many examples of the above, where major international companies invest in the UK, as a result of it giving them access to EU markets (and the trade deals that exist between the EU and others), and benefiting from employee mobility across the EU, particularly in finance.

If nothing else, it should seem natural to assume that the EU's bargaining powers are higher that ours alone would be? There are many international trade deals still being negotiated by the EU.

There are some Brexit voices saying we can go entirely duty free of course, which is an interesting approach, only currently used by Hong Kong and Macau. However, WTO rules state that you cannot be selective about it, so we would have no protection for our agriculture or steel industries for example.

 

[websaway]

Trade tariffs are complicated, and it is the legal responsibility of importers and exporters to apply the right tariff to each transaction.

Here's more background than you could possibly want
https://www.gov.uk/trade-tariff/sections

At the moment, tariffs within the EU are zero for most things. If the UK leaves it will no longer benefit from that zero tariff regime.

In all likelihood, the EU will charge a 10% tariff on stuff from the UK since it will move from the "in the EU" column to the "out of the EU" column and therefore a different tariff rate automatically applies. Some types of product or service may incur tariffs much higher than 10% - again, the processes are already in place and apply to hundreds of countries (they'll simply apply to one more if the UK leaves)

Similarly, the UK will charge a tariff on exports.

This will make the UK's exports more expensive and therefore less competitive with EU producers, and it will make everything the UK imports from the EU more expensive (helping local UK producers, but in many instances there are no suitable UK alternatives since the industries in question have pretty much died out)

All this can be changed post-facto through negotiation, but that's on a product by product, industry by industry basis.

They said all this about the Euro Zone . If we didn't join the Euro every financial institution would vacate the capital, our businesses would lose out on trade.

 

[websaway]

I don't think it is as simple as that. There will need to be new trade deals drawn up, which may or may not include tariffs, duties and/or import quotas. Depending upon whether the EU wants to protect manufacturers/producers from within the EU.

As a very general example (which may not even be correct in its details), there is currently a 10% import duty on cars made outside of the EU. So, if this were to remain, whilst UK manufactured cars will still be welcomed in the EU, they will be more expensive. So the next time Nissan or Ford look where to invest in a new production line for cars selling within the EU, it may not be here!



Not on the 24th, but after the trade deals have been renegotiated (and there are many saying the UK will have to renegotiate with the entire world, not just the EU), you may find that the customers no longer think you offer the best fit value / quality. There may be tariffs on your product, or import licences required.

There may be, there may be , there may be, but there may not be because we really don't know.

 

[websaway]

2002 if you don't join the Euro Zone you are dead in the water.
2009 thank god we did not join the Euro Zone.
Farage told us yesterday that the establishment are all saying stay.
Ex establishment who can speak honestly are less sure.

 

[Edwin]

The tariff regime already exists. The EU already has known processes for trading with non-EU countries.

Why is it therefore so hard to grasp what would happen to trade and tariffs if the UK leaves the EU (one set of clearly defined rules) and enters the "not EU" (another set of clearly defined rules)

 

[martin-s]

A quick look indicates that Germany produced around 5.7m cars in 2015, and 800,000 odd were exported to the UK. The UK produced around 1.6m cars, and 700k were exported to the EU.

A net deficit of 100,000 cars, just on Germany's stats. What about France, Italy and Spain?

We are a big market for them - why would they make it harder to sell their own products to us?

20% vs 50% market share doesn't matter a damn. You negotiate based on the bottom line numbers. They have more to lose in car sales than we do.

Plus, German car reliability has taken a real hit in recent years. Is now really the time to make them even more reassuringly expensive? JD Power stats have BMW and VW looking pretty average - and my experience owning both of those bears that out.

And let's not mention the VAG group diesel scandal!

 

[martin-s]

Why is it therefore so hard to grasp what would happen to trade and tariffs if the UK leaves the EU (one set of clearly defined rules) and enters the "not EU" (another set of clearly defined rules)

It's not hard to grasp, but it's a reflection of the world as it is now, not the world as it would be after a negotiated Brexit. Have a bit of imagination Edwin

Or, a negotiated remain having had a Brexit vote raise EU-wide concerns about what a UK-less Europe might look like.

 

[martin-s]

UK motor vehicle imports from the EU have grown from £14.3 billion to £31.3 billion between 1998 and 2014.

Source: http://webarchive.nationalarchives....l-business-survey/car-production/sty-car.html

One would assume they were a massive proportion of the £60+ billion trade deficit then. So probably quite a relevant example to work through.

Edit: Exports to EU countries have grown from £8.0 billion to £11.9 billion over the same period

So at a mutual 10% tariff, that's a £1.94 billion negotiation tactic right there.

 

[websaway]

The tariff regime already exists. The EU already has known processes for trading with non-EU countries.

Why is it therefore so hard to grasp what would happen to trade and tariffs if the UK leaves the EU (one set of clearly defined rules) and enters the "not EU" (another set of clearly defined rules)

Are you under the illusion that if we leave the EU the EU won't change. Are you suggesting that it's Mafioso attitude can survive if we leave. There were stringent rules on movement of people but it didn't stop countries closing their borders. How many times have Greece had to be bailed out before default. What's happening in Holland.

 

[gimpydog]

At the moment, tariffs within the EU are zero for most things. If the UK leaves it will no longer benefit from that zero tariff regime.

In all likelihood, the EU will charge a 10% tariff on stuff from the UK since it will move from the "in the EU" column to the "out of the EU" column and therefore a different tariff rate automatically applies. Some types of product or service may incur tariffs much higher than 10% - again, the processes are already in place and apply to hundreds of countries (they'll simply apply to one more if the UK leaves)

In two paragraphs you have gone from "it will no longer benefit" to "In all likelihood" to "automatically applies" to "may incur tariffs" Why don't you admit that you don't know & are just speculating?

Similarly, the UK will charge a tariff on exports.

Why? Because you think so?

This will make the UK's exports more expensive and therefore less competitive with EU producers

Hang on a moment...isn't the pound about to collapse? Won't that make the UK's exports much cheaper & much more competitive?

and it will make everything the UK imports from the EU more expensive (helping local UK producers, but in many instances there are no suitable UK alternatives since the industries in question have pretty much died out)

But it will also mean we will be able to import cheaper food from Africa & South America tariff-free and cars from Asia tariff-free & EU firms will be incentivised to move production of their cars, or widgets into the UK - as was the case with Nissan & Honda, for example.

Here's an opinion from someone well qualified to offer one...
http://www.telegraph.co.uk/news/201...ut-britains-trade-outside-the-european-union/

 

[Edwin]

I wrote "in all likelihood" because the exit process itself would take two years, and during that time it's safe to expect that Britain would be able to conclude some free trade deals. So tariffs wouldn't actually apply to everything, but only to those goods/services for which free trade agreements hadn't been concluded in time.

 

[Edwin]

Hang on a moment...isn't the pound about to collapse? Won't that make the UK's exports much cheaper & much more competitive?

It doesn't actually work like that since you're playing one negative scenario off another without following the logic all the way to the end.

If you accept the notion that the pound would collapse, then yes, the UK's exports would be cheaper. At the same time, given the UK has a record trade deficit with the EU and therefore buys much more from them more than they buy from us, the collapse of the pound would hurt the UK economy since it would take a lot more pounds to pay for the stuff we buy from the EU.

 

[Edwin]

Are you under the illusion that if we leave the EU the EU won't change.

Are you under the illusion that if we stay in the EU the EU won't change?

 

[RobM]

Are you under the illusion that if we stay in the EU the EU won't change?

Has it in the past?

 

[denchomsky]

I'm out. This is a once in a life time opportunity. Instead of fearing change we should embrace it.

Progress is impossible without change, and those who cannot change their minds cannot change anything.
- George Bernard Shaw

 

[Edwin]

Has it in the past?

Yes. All the time. Surely you're not really claiming that the same rules, laws and regulations apply in the EU today as they did a decade or two ago? There have been numerous treaty amendmends, new trade agreements and agreement changes, etc. EU legislation and regulations evolve constantly as well.

See for example the table in the following article: https://en.wikipedia.org/wiki/Treaties_of_the_European_Union

 

[Edwin]

BTW, I'd like to come back to something I posted earlier in this mega-thread: I have zero expectation of changing the opinion of anyone who's already firmly in the Leave camp.

All I'm trying to do is make as much information as possible available to those who've yet to make up their minds.

 

[RobM]

Yes. All the time. Surely you're not really claiming that the same rules, laws and regulations apply in the EU today as they did a decade or two ago? There have been numerous treaty amendmends, new trade agreements and agreement changes, etc. EU legislation and regulations evolve constantly as well.

See for example the table in the following article: https://en.wikipedia.org/wiki/Treaties_of_the_European_Union

Lol all the time! - you must have a different understanding of time than me. That table says it all. Interestingly enough how many of those million changes went against the UK's vote/opinion? Obviously after UK opts to remain in the EU Europe will change everything that's wrong for UK and make it all perfect. They've proven this apparently in the past.

 

[Edwin]

Obviously after UK opts to remain in the EU Europe will change everything that's wrong for UK and make it all perfect. They've proven this apparently in the past.

Nobody on this thread, nor anyone in the media in the "wider world" has claimed that a "Remain" would fix "everything that's wrong" with the EU. So why resort to a straw man argument?