Brexit Negotiations

[Metalmicky]

MM

I replied to BB in a similar theme a couple of days ago. There are certain things that are simply too complicated for economists to predict. Other things are relatively easy.

No one predicted the 2007/08 crash. Some people claim they saw something coming but there’s no prediction that really stacks up. That’s because it was due to a fiendishly complex set of circumstances. The key complexity was how the shadow banking system had taken in far more risk than anyone properly understood, and how vulnerable it was to a loss of confidence caused by the collapse of the American housing bubble. Even then, the crash would not have been anything like as severe as it was if the US Govt had bailed out Lehman Brothers. Letting them go bust opened up the trap door under the confidence that was supporting the whole banking system.

No one could have predicted the systemic effect of that because the interplay of effects was too poorly understood and too complex. Many people were worried about the housing bubble but there have been many bubbles which have deflated without crippling the global financial system.

What we needed in 2007/8 were some of those experts CIM has referred to....

............................ just ribbing CIM 

[Metalmicky]

The effect of Brexit is totally different. Academic economists understand very well the effect of open or closed trading arrangements on countries’ economies. This is nowhere near as complex an issue or as dimly understood an issue as the factors that led to the Great Crash. So they can relatively accurately model the effect of us choosing to make it harder to trade with 450million generally wealthy people on our doorstep.

Here’s an analogy. Trying to predict the outcome of the global economy is like trying to predict the result of a football match between two very well matched sides. Every pundit will have an opinion, but none of them really know. There are too many interacting variables to accurately predict the outcome.

Predicting the effect of Brexit is like trying to predict the result of a long distance race between a bunch of well matched runners, but where one of the runners has chosen to hang a 1kg weight round his waist. You can’t predict exactly what time that runner will do, but you can be fairly certain that they’ll be slower than they would have been without the weight.

So it is with Brexit. Yes there will be some uncertainty. Yes the models will give different answers. Yes the precise outcome will depend on what arrangements we can get with other trading partners. But even taking all those things into account, pretty much every expert expected and still expects the effect of Brexit to be profoundly negative on our economy.

And unfortunately, we’re in the middle of seeing those predictions come true. Believe me, I wish with all my heart that they were wrong because I’m f**ked if I want my kids growing up in the sort of country that we are going to be when we realise what we’ve pissed away and start looking for someone to blame.

My only point to your above is.............. when was all this sorted out? - I thought we were still in discussions with our EU friends, and now I find it's all sorted and we are all doomed.......   I would also say that the EU will also want to find a solution that enables them to trade easily also - so I might want to wait before I jump ship... The fact that they currently import a great deal more to the UK that we export out to them would suggest that a reciprocal arrangement would be favourable. 

I'm not suggesting that you are wrong BTW and I understand the premise of a harder trading area post Brexit - I just don't see it as totally negative and I think as one door closes others may/will open...

As Hoola alluded to earlier, it is good to talk and debate and I learn new stuff, both pro and con Brexit every time I visit this thread...

[BillyStubbsTears]

MM

It’s all sorted because of the following:

1) May, under pressure from Johnson, Fox, Rees-Mogg etc decided back in January that Brexit meant we have to leave the Single Market and Customs Union. (Note: On Liam Fox’s own website there is a blog article written by him before the vote saying that what we need led to do was leave the EU but stay in the SM and CU - your guess is as good as mine why he’s changed his mind.)

2) May, Johnson etc all claim that we can do this and still have as easy a trading relationship with the EU as we had before.

3) Nobody actually believes that. Why on earth would the EU allow us alone to drop out of all the obligations and responsibilities of the SM and CU while still keeping all the benefits? It’s infantile to even think that the other EU nations would accept that. One EU negotiator summed it up. He said Davis was acting like someone who wanted to be invited to a wife-swapping party without having to bring his wife.


So it’s is US who have decided to make our economic life harder. Or rather it’s a small group of Tory MPs who are all jockeying for the top jobs who are playing with the future of the rest of us. And we’re told this is the Will of the People.

[Metalmicky]

MM

It’s all sorted because of the following:

1) May, under pressure from Johnson, Fox, Rees-Mogg etc decided back in January that Brexit meant we have to leave the Single Market and Customs Union. (Note: On Liam Fox’s own website there is a blog article written by him before the vote saying that what we need led to do was leave the EU but stay in the SM and CU - your guess is as good as mine why he’s changed his mind.)

2) May, Johnson etc all claim that we can do this and still have as easy a trading relationship with the EU as we had before.

3) Nobody actually believes that. Why on earth would the EU allow us alone to drop out of all the obligations and responsibilities of the SM and CU while still keeping all the benefits? It’s infantile to even think that the other EU nations would accept that. One EU negotiator summed it up. He said Davis was acting like someone who wanted to be invited to a wife-swapping party without having to bring his wife.


So it’s is US who have decided to make our economic life harder. Or rather it’s a small group of Tory MPs who are all jockeying for the top jobs who are playing with the future of the rest of us. And we’re told this is the Will of the People.

Oh good - glad it's all done and dusted.........   I just hope no fooker decides to change their mind or reach some other decision based on common sense - that would really balls it up.....

[BillyStubbsTears]

MM
Think about it. How on earth can the EU agree to let us leave the SM and CU, then negotiate a deal that gives us all the benefits of the SM and CU without paying the costs of the SM and CU?

Just think about it and it’s bleeding obvious that if we choose to leave the SM and CU, we HAVE to take an economic hit. No amount of negotiation can alter that.

[Sprotyrover]

Sproty.

Maybe...
https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/world-43414145


You’re way off the mark on exports by the way. You really out to read more widely.
http://www.worldstopexports.com/denmarks-top-10-exports/

Billy I have conducted my own macro economic study  of the Danish economy As through experience I gravely doubt the veracity of the Graphs and figures you pull out of your Top Hat? Food, dairy, meat and fish products make up 18.7% of Denmarks gross National product, half of which goes to the uk.
The Danes guestimate the damage to those exports could be in the region of 48%.in particular the Fishing industry could lose 85% of its catch as a worst case scenario and 50% in a best case.
Now in my book loosing 9% of your economy and 85% of your fishing catch is a big risk.
Particularly when you look to the colossus immediately south of Denmark, which is 24 times larger, counting The German language Countries/regions of Austria, Switzerland,Lichtenstein,and Slovenia.Alsace and Lorraine.
I was just wondering why Denmark?

[BillyStubbsTears]

Sproty

Right. Fingers out and ready to count on them.

You reckon 9% of Denmark’s GDP is made up of exports of food to us? Really?

Their total exports of EVERYTHING to EVERYBODY in 2026 was 30% of GDP ($93bn out of a GDP of $306). Exports to the U.K. made up 8.1% of that 30%. So EVERYTHING they exported to us rotted up to 2.5% of their GDP. Of that everything, all foodstuffs totted up to 25%. So their total foodstuff export to the U.K. is about 0.6% of GDP.

Even for a Little Englander like you Sproty, that’s a bit of an over estimate of the importance of the U.K. 

[Sprotyrover]

Sproty

Right. Fingers out and ready to count on them.

You reckon 9% of Denmark’s GDP is made up of exports of food to us? Really?

Their total exports of EVERYTHING to EVERYBODY in 2026 was 30% of GDP ($93bn out of a GDP of $306). Exports to the U.K. made up 8.1% of that 30%. So EVERYTHING they exported to us rotted up to 2.5% of their GDP. Of that everything, all foodstuffs totted up to 25%. So their total foodstuff export to the U.K. is about 0.6% of GDP.

Even for a Little Englander like you Sproty, that’s a bit of an over estimate of the importance of the U.K. 

I am a Yorkshireman,British and proud to be so!

[BillyStubbsTears]

Yeah but how much bacon do you eat?

[Sprotyrover]

Yeah but how much bacon do you eat?

I like it but it's usually a once a week treat. Yorkshire ham now that's a different story,and Black Forest ham,Spanish Jambon etc, most German and Polish pork products!

[BillyStubbsTears]

Right. Only if bacon exports to us made up 9% of Danish GDP, I reckon that would mean we imported off them about 1500 rashers per year for every man woman and child in the U.K. 

Now, I like a fry up, but there’s limits. And anyway, everybody knows that half the population here now are Muslims, so summation doesn’t really stack up.

[Bentley Bullet]

Goodbye Lurpak - Hello six-pack.

[Sprotyrover]

Right. Only if bacon exports to us made up 9% of Danish GDP, I reckon that would mean we imported off them about 1500 rashers per year for every man woman and child in the U.K. 

Now, I like a fry up, but there’s limits. And anyway, everybody knows that half the population here now are Muslims, so summation doesn’t really stack up.

I notice you did a bit of cherry picking with your reply Billy, just been watching the Danish Primeminister on the News they are a bit worried about their fishing industry by all accounts but not yours!

[selby]

Billy, I cannot see what all the fuss is over the Irish border, when the Isle of Man and the Channel Isles are not considered as part of the territory of the EU. but have no internal borders, and neither imposes VAT on goods.

[BillyStubbsTears]

Selby

Give Boris a ring then. It’s obviously never dawned on him.

Seriously, the point is that they are in a Customs Union with us and we are in a Customs Union with the EU. And whilst they are not in the SM, in practice, they operate as though they were. So, and because they are so small and so little trade goes through them, effectively the EU turns a blind eye to the exact legal situation.

That can’t work with Ireland because there is a far, far bigger trade in goods across the border. So if NI is outside the SM then every items of goods that goes over the border to the RoI would need paperwork ensuring that it was compliant with the requirements of the SM. And if NI was outside the CU, every shipment of goods would in practice be liable to customs checks. The ignoring those checks, with so much trade going on over the Irish border would effectively destroy the credibility of the CU and SM. If a UK company wanted to make stuff and sell it to the EU but not have to prove that it met the requirements of the SM, it could just set up a factory in NI, ship wagon loads of non-confirming widgets over the border then have them distributed through the EU.

You can’t really abuse the system like that through the Channel Islands and IoM because a) they are too small and b) they don’t have a land border with the EU.

So, if new leave the SM and CU, there HAS to be one of the following two options:

1) a hard border between NI and RoI. That would destroy the freedom of movement that has been enjoyed for a generation. It would be back to checkpoints. It would hammer the NI economy. And it would provide nice targets for disaffected bad guys.

or

b) you leave the NI/RoI border open. NI stays within the CU and SM. And we have a hard customs and market border in the Irish Sea between the islands of Ireland and Great Britain. Goes without saying that the DUP have said, “over our dead bodies.”

But if a bleeding mess if you ask me. But never mind. Boris told us 2 years back that it wasn’t beyond the wit of man to solve so I’m sure he’s got it cracked.

Of course, we could solve the whole f**king mess by the entire U.K. staying inside the CU and SM, but this Govt have decided that wasn’t what the people voted for.

[Bentley Bullet]

If we had another vote and voted to remain, would the EU have a much stronger hold on our decision making than prior to the referendum, even resulting in us converting to the Euro?

[BillyStubbsTears]

No and no.

[BillyStubbsTears]

By the way, this shiws much more clearly what I was ranting on about this afternoon. That the was no clarity whatsoever about the kind of Brexit that was voted for.

https://mobile.twitter.com/EmporersNewC/status/974373411165270017

[hoolahoop]

Hoola, I wasn't being rude when I said you'd taken it wrong regarding your suggestion that I get my BBC Brexit bias info from the Mail/Express. I was merely correcting you because, although those tabloids do claim BBC pro-EU bias, I couldn't use their examples in this forum because they would simply be disregarded as lies.

It's a pity really that my personal opinion can't be accepted as just that, but it seems that until I can show links as evidence of several other like-minded people who share my observations, my opinion is disrespected, sometimes to the point of ridicule. Rude even!

In an attempt at evidence that will be accepted as proof that my personal opinion is shared, here's a link. I won't hold my breath.

http://bbccomplaints.com/

Incidentally I accept there was a pro - Remain bias ( apart from the knob from RT)  on the panel tonight - and despite this being in a Brexit constituency ( 62% voted for Brexit and a similar % in Kent as a whole ) . However I didn't feel the usual hostility , booing etc as I have witnessed before ......Is the mood changing and what's more is the reality of a possible 29 mile tail- back snaking it's way through Kent sharpening people's brains ? Of course Chris Grayling said that " the UK will wave vehicles through and that won't happen " - don't we want control of our borders any longer ?

Moreover he seemed to indicate that similar things would happen between N.ireland and Eire ? It gets stranger by the minute , I was waiting for him to get a fag packet out to explain his workings out !!

[hoolahoop]

Hoola
Interesting point regarding your daughter.
My daughter is a trained nurse. I'm encouraging her to move to Australia as due to this ridiculous decision this country is f***ed. If I was younger I'd be off too.

I wish her all the best TT , I'm sure that would be a wonderful opportunity for her and it's great to see you are looking after her interests even if it means you won't be able to see her as often. The holidays sound better than Denmark though ( a tad warmer ) if you like you can spend our winters down there in your dotage  and eventually move there if she grabs that sort of chance.
I know they are always looking for nurses and of course there's always NZ too.

[hoolahoop]

Sproty.

Maybe...
https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/world-43414145


You’re way off the mark on exports by the way. You really out to read more widely.
http://www.worldstopexports.com/denmarks-top-10-exports/

Thanks BST seems you have answered the question fully . Believe me Sproty Denmark kicks way above its weight being the 29th highest exporter in the world. No mean feat by a population numbering only 5.73 million . If only our exports pro rata were as high.

[hoolahoop]

Sproty.

Maybe...
https://www.google.co.uk/amp/s/www.bbc.co.uk/news/amp/world-43414145


You’re way off the mark on exports by the way. You really out to read more widely.
http://www.worldstopexports.com/denmarks-top-10-exports/

Billy I have conducted my own macro economic study  of the Danish economy As through experience I gravely doubt the veracity of the Graphs and figures you pull out of your Top Hat? Food, dairy, meat and fish products make up 18.7% of Denmarks gross National product, half of which goes to the uk.
The Danes guestimate the damage to those exports could be in the region of 48%.in particular the Fishing industry could lose 85% of its catch as a worst case scenario and 50% in a best case.
Now in my book loosing 9% of your economy and 85% of your fishing catch is a big risk.
Particularly when you look to the colossus immediately south of Denmark, which is 24 times larger, counting The German language Countries/regions of Austria, Switzerland,Lichtenstein,and Slovenia.Alsace and Lorraine.
I was just wondering why Denmark?

exports from Denmark.

Germany: US$14.1 billion (15% of total Danish exports)
Sweden: $10.7 billion (11.4%)
Norway: $5.8 billion (6.2%)
United Kingdom: $5.6 billion (6%)
United States: $4.7 billion (5%)
Netherlands: $4.3 billion (4.5%)
China: $3.3 billion (3.6%)
France: $2.8 billion (3%)
Poland: $2.6 billion (2.7%)
Italy: $2.3 billion (2.4%)
Finland: $2.1 billion (2.2%)
Spain: $1.8 billion (1.9%)
Japan: $1.5 billion (1.6%)
Belgium: $1.4 billion (1.5%)
Ireland: $989 million (1%)


Now you have me puzzling at your analysis . These are the figures for 2016 showing a total share of all products to the UK @ 6% .

Are you suggesting that the 6% in my list is actually 9% and why would it all be lost ?

Exports by sector : -
exports from Denmark.2016

Machinery including computers: US$12.8 billion (13.6% of total exports)
Pharmaceuticals: $12.5 billion (13.3%)
Electrical machinery, equipment: $8.8 billion (9.4%)
Mineral fuels including oil: $4 billion (4.2%)
Optical, technical, medical apparatus: $3.9 billion (4.2%)
Meat: $3.6 billion (3.9%)
Furniture, bedding, lighting, signs, prefab buildings: $2.8 billion (3%)
Fish: $2.6 billion (2.8%)
Vehicles: $2.4 billion (2.6%)
Dairy, eggs, honey: $2.4 billion (2.5%)

Your figures and potential  hit on the Danish economy simply doesn't add up. Especially the fish bit - I'm really puzzled as to how assuming an 85%  drop in the fish catch would be an alarming problem to a 2.8% export sector ?

Please someone tell me I'm missing summat here , it's early in the morning and I just don't know what point you are trying to get across Sproty ?

[hoolahoop]

Sproty

Right. Fingers out and ready to count on them.

You reckon 9% of Denmark’s GDP is made up of exports of food to us? Really?

Their total exports of EVERYTHING to EVERYBODY in 2026 was 30% of GDP ($93bn out of a GDP of $306). Exports to the U.K. made up 8.1% of that 30%. So EVERYTHING they exported to us rotted up to 2.5% of their GDP. Of that everything, all foodstuffs totted up to 25%. So their total foodstuff export to the U.K. is about 0.6% of GDP.

Even for a Little Englander like you Sproty, that’s a bit of an over estimate of the importance of the U.K. 

I am a Yorkshireman,British and proud to be so!

So are the majority of us too and patriotic ( that remark is not aimed at you ) and I,  like many, really object to being called " moaners " , unpatriotic and are asked constantly if this is the right country for me to be living in when making comparisons with the EU or at least one of its countries , " get behind the country some  cry " - well guess what I am solidly behind my country .

[Glyn_Wigley]

Hoola, I wasn't being rude when I said you'd taken it wrong regarding your suggestion that I get my BBC Brexit bias info from the Mail/Express. I was merely correcting you because, although those tabloids do claim BBC pro-EU bias, I couldn't use their examples in this forum because they would simply be disregarded as lies.

It's a pity really that my personal opinion can't be accepted as just that, but it seems that until I can show links as evidence of several other like-minded people who share my observations, my opinion is disrespected, sometimes to the point of ridicule. Rude even!

In an attempt at evidence that will be accepted as proof that my personal opinion is shared, here's a link. I won't hold my breath.

http://bbccomplaints.com/

Incidentally I accept there was a pro - Remain bias ( apart from the knob from RT)  on the panel tonight - and despite this being in a Brexit constituency ( 62% voted for Brexit and a similar % in Kent as a whole ) . However I didn't feel the usual hostility , booing etc as I have witnessed before ......Is the mood changing and what's more is the reality of a possible 29 mile tail- back snaking it's way through Kent sharpening people's brains ? Of course Chris Grayling said that " the UK will wave vehicles through and that won't happen " - don't we want control of our borders any longer ?

Moreover he seemed to indicate that similar things would happen between N.ireland and Eire ? It gets stranger by the minute , I was waiting for him to get a far packet out to explain his workings out !!

I'd like to know whether Grayling thinks the French are just going to wave traffic through at their end too...

[Glyn_Wigley]

Billy, I cannot see what all the fuss is over the Irish border, when the Isle of Man and the Channel Isles are not considered as part of the territory of the EU. but have no internal borders, and neither imposes VAT on goods.

But when goods are moved to and from the Isle Of Man and Channel Islands there are Customs  Declarations and they are subject to physical checks. ie it IS a hard border, just like any movements with any other non-Single Market territory.

Other non-EU countries don't impose VAT on their imports either (it's an EU tax after all), so I don't understand the significance in mentioning it. When goods are exported from the IOM and CI to the rest of the UK, VAT is levied on those goods. That's because although the IOM and CI are in the Customs Union they're not in the Fiscal Union.

[selby]

  Glyn, They are crown dependencies, unlike Gibraltar the C.I & the I.O.M. are not part of the territory of the EU. However protocol 3 of the 1972 treaty of accession provides for their treatment as if they were in the customs union for free movement of industrial goods and agricultural produce, and for equal treatment of all union citizens within their jurisdictions.
  However,Eu legislation in many other areas, such as free movement of people and services, competition, and taxation policies, and the operation of structural funds does not apply to the IOM and the CI, nor are they represented in the European Parliament.
  As a result of these arrangements Jersey and Guernsey have chosen not to introduce VAT, the former levying a domestic 3% domestic sales tax , and the latter nothing at all.
   Which rather makes a nonsense of the EU stance the integrity of the market.

[selby]

  Just a thought, why don't we let The IOM invade us, in a sort of reverse take over. Or we could say we are the undiscovered  Channel Isle, call ourselves Britanica or something similar.
  What do you think?

[Not Now Kato]

No and no.

Absolutely BST.  However, if we do leave the EU and then later want to rejoin the answers would likely be Yes and Yes.
 
Leaving the EU continues to be a bad move for Britain.  It isn't taking back control, it's giving away control!

[hoolahoop]

By the way, this shiws much more clearly what I was ranting on about this afternoon. That the was no clarity whatsoever about the kind of Brexit that was voted for.

https://mobile.twitter.com/EmporersNewC/status/974373411165270017

There isn't a clear position there at all. I can understand the argument for the SM but the CU was left vaguely open and rarely if ever mentioned.

[Glyn_Wigley]

  Glyn, They are crown dependencies, unlike Gibraltar the C.I & the I.O.M. are not part of the territory of the EU. However protocol 3 of the 1972 treaty of accession provides for their treatment as if they were in the customs union for free movement of industrial goods and agricultural produce, and for equal treatment of all union citizens within their jurisdictions.
  However,Eu legislation in many other areas, such as free movement of people and services, competition, and taxation policies, and the operation of structural funds does not apply to the IOM and the CI, nor are they represented in the European Parliament.
  As a result of these arrangements Jersey and Guernsey have chosen not to introduce VAT, the former levying a domestic 3% domestic sales tax , and the latter nothing at all.
   Which rather makes a nonsense of the EU stance the integrity of the market.

1. I know they are not in the EU.

2. Being in the Customs Union does not mean free movement of goods as in the Single Market, Customs Union means unified Duty rates and (usually) a zero-rate of Customs Duty on goods moved between countries in a Customs Union. Even when there is no Customs Duty levied Customs Declarations still have to be made, because they are NOT in the Single Market. Why can't people get the difference between Customs Union and Single Market?

3. As I said, VAT is an EU tax. The CI are not in the EU, so why would they impose VAT? And why would it make a mockery of the integrity of the EU market when any goods exported from the CI to any member state of the EU (including the UK) has VAT levied on it when it crosses the border?