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Brexit discussion thread II

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Comments

  • Closed Accounts Posts: 618 ✭✭✭Thomas__


    ambro25 wrote: »
    I'm happy to be subject to any immigration rules that apply.
    You must be rather invested in the UK then, for you to forego your acquired rights with such abandonment.

    Speaking of diminished rights, I hear the Dutch (and all other EU nationals not permitted to maintain a double nationality) intending to continue residing in the UK are in a bit of a pickle: for the time being, it's either gamble on May's offer retrograding their rights and with wholly uncertain consequences in years to come, or take the British nationality and surrender their own.

    Others living in the UK went the opposite direction:


    https://www.rte.ie/news/ireland/2017/0719/891448-passports/

    Over 500,000 Irish passports have been issued by the Passport Service so far this year, according to Minister for Foreign Affairs Simon Coveney.
    He said that applications for passports have increased by an average of 10% over the same period last year.
    Mr Coveney said concerns surrounding Brexit have led to a rise in the number of applications. 
    He said the Passport Service has seen a significant rise in the number of citizens from the UK applying for an Irish passport this year.
    The minister added that there is a general buoyancy in the Irish economy, which means more people are moving to Ireland with more people "wanting to be Irish". 
    He said it looks like 800,000 passports will be issued in 2017.
    ...

    It´s really cruel what Brexit is doing to many people. I also noticed the stance of the Netherlands govt on dual citizenship, doesn´t make it easier for Dutch people living in the UK. They, like many others who don´t have the prospect of becoming people with dual citizenship are lost to this limbo and being the "bargaining chips" for the Brexiteers.


  • Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Jim2007 wrote: »
    Given your starting point and example I guess we can now conclude that you accept it will not go well for the average worker who voted for BREXIT after all!

    You do know competitive bidding has nothing to do with the eu, Brexit or anything else, don't you?


  • Moderators, Business & Finance Moderators Posts: 10,945 Mod ✭✭✭✭Jim2007


    You do know competitive bidding has nothing to do with the eu, Brexit or anything else, don't you?

    Dear lord, really!!!

    The point is that that competitive means that the UK will have to compete on a cost basis with countries that have a far lower cost structure. The means the UK is going to have to cut costs and the UK worker is the one going to take the hit.

    The UK is about to leave a market representing 48% of it's exports and one it which it has preferential treatment to trade as a third country. It does not take a genius to figure out this will not go well for the typical worker.


  • Registered Users, Registered Users 2 Posts: 5,985 ✭✭✭ambro25


    You do know competitive bidding has nothing to do with the eu, Brexit or anything else, don't you?
    I think Brexited UK companies intending to bid for public work tendered within the EU would end up disagreeing with that: just another amongst the myriad non-tariff barriers which the UK is running headlong into, until and unless settled through negotiations or a trading agreement.

    Considering the degree of preparation of the UK government (Ministries) as known to me personally (in the context of IP), I wouldn't bet on any Whitehall type having even considered that particular issue (EU tenders) yet.


  • Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Jim2007 wrote: »
    Dear lord, really!!!

    The point is that that competitive means that the UK will have to compete on a cost basis with countries that have a far lower cost structure. The means the UK is going to have to cut costs and the UK worker is the one going to take the hit.

    How is that different to the current situation?
    Jim2007 wrote: »
    The UK is about to leave a market representing 48% of it's exports and one it which it has preferential treatment to trade as a third country. It does not take a genius to figure out this will not go well for the typical worker.

    I don't think it will go well for anyone really, but for the typical worker who has to compete in a rave to the bottom as far as salaries goes because of constant immigration from lower cost countries may not see it that way.


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  • Moderators, Business & Finance Moderators Posts: 10,945 Mod ✭✭✭✭Jim2007


    How is that different to the current situation?

    After all these posts are you saying that you don't understand the current situation for UK companies trading in the EU? If so then really there is little point in setting out again. It is time to move on.


  • Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭swampgas


    I don't think it will go well for anyone really, but for the typical worker who has to compete in a race to the bottom as far as salaries goes because of constant immigration from lower cost countries may not see it that way.

    Assuming that protecting the typical UK worker is your goal, and you think immigration is causing a race to the bottom, surely a better option for the UK would be to actually implement the legally allowed controls on immigration from the EU, and restrict immigration from outside the EU (which can be done anytime)? And stay in the single market?

    Right now you seem to have a government loath to actually restrict immigration (despite all their rhetoric) yet determined to pull out of a huge single market that provides lots of employment.

    It seems to me that May would like to get rid of external court oversight so she can deport the occasional hate preacher, I really don't think she intends to restrict immigration in any meaningful way.


  • Registered Users, Registered Users 2 Posts: 5,985 ✭✭✭ambro25


    How is that different to the current situation?
    Currently, the notional UK employer of the notional UK worker in the UK, to supply the <EU28> demand for <good/service>, competes on a level playing field with the notional <EU27> employer of the notional <EU27> worker in the <EU27> country.

    Post-Brexit, the notional UK employer of the notional UK worker in the UK, to supply the <EU28> demand for <good/service>, still competes with the notional <EU27> employer of the notional <EU27> worker in the <EU27> country, but not a level playing field anymore: the UK cost base is impacted by additional tariffs, customs processing, regulatory compliance checks, other NTBs, <etc.>, because the UK is not in the club anymore, and so now subjected to them like everybody else outside the club.

    Meanwhile, the cost base of the notional <EU27> competitors remains unchanged, so the notional <EU27> competitors all gain a cost advantage over the notional UK employer. Through doing nothing, which is bonus for them :pac:

    Before or after Brexit, the notional UK employer of the notional UK worker in the UK, still competes with notional <non-EU> employers of notional <non-EU> workers outside the EU of course. Only now, the UK employer does not enjoy the 'protective' relief from the EU tariffs, customs processing, regulatory compliance checks, other NTBs <etc.>, and so competes with them on a more level playing field (more level for the notional <non-EU> employers).

    All things (overall procedural costs of goods entering the EU27) being equal, the UK employer must align his cost base on those of his non-EU competitors (FTA'd ones or not, depending on what relationship the UK gets with the EU).

    That means either trimming profitability levels, and/or driving down labour costs (and other overheads), and/or increasing productivity (bearing in mind the UK starts from a red lantern position compared to many <EU27> employers, never mind the <non-EU> ones). Guess which?

    I wonder if Foxconn are scouting in the UK yet? :pac:


  • Registered Users, Registered Users 2 Posts: 16,644 ✭✭✭✭Zubeneschamali


    swampgas wrote: »
    Assuming that protecting the typical UK worker is your goal, and you think immigration is causing a race to the bottom, surely a better option for the UK would be to actually implement the legally allowed controls on immigration from the EU, and restrict immigration from outside the EU (which can be done anytime)? And stay in the single market?

    There is not much point in telling Fred he should have voted Remain. He did. He said so, and made the case at the time. He thinks Brexit is a bad idea.

    He is just trying to make the best of it, and reacting to what he sees as anti-British sentiment.


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    I presume everyone contributing to this thread keeps up to date with the www.eureferendum.com blog?

    It's written by Richard North, a former UKIP candidate and pro-Brexit campaigner.

    However, he's fiercely critical of the approach to Brexit being taken by the UK government, and the complacency with which much of UK society, politicians, business and the media especially, views the prospect of a 'no deal' Brexit.

    He wants the UK to remain in the Single Market (basically the 'Norway models', via membership of EFTA - the European Free Trade Association and adherence to the EEA (European Economic Area) Agreement) for a lengthy transitional period, years or even decades, while the UK develops its trading relationships with the rest of the world and develops its own regulatory regimes and capacities, based on international regulatory co-operation and trade co-operation through international bodies.

    I don't agree with his final destination (what he calls Flexcit) as I think it's never going to happen - the proposal would basically require the EU to voluntarily give up most of its powers and for a multiplicity of states to agree with his vision on a more-or-less permanent basis - and I prefer the EU model anyway.

    But the transitional proposals (realistically they'd probably end up being permanent arrangements) are about the only way for the UK to avoid a huge blow to its economy and society.

    He has a depth of knowledge about the EU and how it works which puts most British politicians and journalists to shame and he is deeply pessimistic about the chances of the UK successfully leaving the UK without doing major harm to itself unless there's a radical change in thinking and a radical new degree of realism features in the debates taking place now in the UK, debates which should have taken place before the referendum vote or at least before the UK made the Article 50 notification.

    Whether you're pro- or anti-Brexit you should read this blog.


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  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    swampgas wrote: »
    Assuming that protecting the typical UK worker is your goal, and you think immigration is causing a race to the bottom, surely a better option for the UK would be to actually implement the legally allowed controls on immigration from the EU, and restrict immigration from outside the EU (which can be done anytime)? And stay in the single market?

    Right now you seem to have a government loath to actually restrict immigration (despite all their rhetoric) yet determined to pull out of a huge single market that provides lots of employment.

    It seems to me that May would like to get rid of external court oversight so she can deport the occasional hate preacher, I really don't think she intends to restrict immigration in any meaningful way.

    A recent survey found that the majority of people asked would be happy for the UK to implement freedom of movement if there were restrictions placed on migrants from EU/EEA countries, such as the right to deport them if they came to the UK looking for work or to look for study opportunities but hadn't found a job/college place after three months and if their ability to claim benefits was restricted for a period after their arrival in the UK.

    However, as it stands, EU states can kick out other EU/EEA citizens if they haven't found work/started study after three months anyway (unless they're joining other family members) and the UK doesn't allow people to claim benefits for the first three months after their arrival in the UK, including non-emergency NHS treatment.

    The fact is that the UK has simply failed to enforce existing restrictions on freedom of movement available within EU law and also fails to enforce its own laws on labour standards (e.g. minimum wage, leave, other terms and conditions) which allow employers to get away with mistreating workers.

    If the UK actually bothered to enforce the laws already available to it, workers would be protected from exploitative employers.


  • Registered Users, Registered Users 2 Posts: 21,268 ✭✭✭✭Water John


    May meeting business leaders again. I think they are really getting worried, with absence of direction and putting on pressure.


  • Moderators, Business & Finance Moderators Posts: 10,945 Mod ✭✭✭✭Jim2007


    He wants the UK to remain in the Single Market (basically the 'Norway models', via membership of EFTA - the European Free Trade Association and adherence to the EEA (European Economic Area) Agreement) for a lengthy transitional period, years or even decades, while the UK develops its trading relationships with the rest of the world and develops its own regulatory regimes and capacities, based on international regulatory co-operation and trade co-operation through international bodies.

    And this is the exact kind of nonsense that has them where the are - no where. You can't be in the EEA and be off developing you stuff at the same time. It is not compatible.


  • Closed Accounts Posts: 1,739 ✭✭✭solodeogloria


    Jim2007 wrote: »
    And this is the exact kind of nonsense that has them where the are - no where. You can't be in the EEA and be off developing you stuff at the same time. It is not compatible.

    Good morning,

    Not that I'm looking for the most lengthy transition in the world but it is compatible.

    Iceland is in the EEA but also has the freedom to sign free trade agreements. Iceland has just signed one with China.

    That's something to note for those who claim that China wouldn't be interested in a free trade deal with the UK.

    Much thanks,
    solodeogloria


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    Jim2007 wrote: »
    And this is the exact kind of nonsense that has them where the are - no where. You can't be in the EEA and be off developing you stuff at the same time. It is not compatible.

    The EEA is the EU plus Iceland, Norway and Liechtenstein, all three are members of EFTA.

    Iceland, Norway, Liechtenstein are free to do trade deals with other non-EU countries, either collectively via EFTA or individually.

    Any country in the EU or the EEA could plan its own future regulatory system and standards in preparation for withdrawal while remaining a member.

    They couldn't implement them while remaining a member, but they could draw them up, ready for implementation upon withdrawal, while being a member.

    Nothing in EU law prevents member states from planning their own regulations as long as they don't try to implement them during their membership.


  • Moderators, Category Moderators, Arts Moderators, Business & Finance Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 18,552 CMod ✭✭✭✭Nody


    Good morning,

    Not that I'm looking for the most lengthy transition in the world but it is compatible.

    Iceland is in the EEA but also has the freedom to sign free trade agreements. Iceland has just signed one with China.

    That's something to note for those who claim that China wouldn't be interested in a free trade deal with the UK.

    Much thanks,
    solodeogloria
    China is always interested in signing a FTA; they get to dump their steel etc. from state supported companies in your country without you complaining and you get token access to markets they can't be bothered with atm and will shut down if they want to start up internal production instead. The problem is to get a FTA with China that actually benefits you as well as China as seen in the multiple WTO disputes both Europe and USA has had with them.


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    ambro25 wrote: »
    Currently, the notional UK employer of the notional UK worker in the UK, to supply the <EU28> demand for <good/service>, competes on a level playing field with the notional <EU27> employer of the notional <EU27> worker in the <EU27> country.

    Post-Brexit, the notional UK employer of the notional UK worker in the UK, to supply the <EU28> demand for <good/service>, still competes with the notional <EU27> employer of the notional <EU27> worker in the <EU27> country, but not a level playing field anymore: the UK cost base is impacted by additional tariffs, customs processing, regulatory compliance checks, other NTBs, <etc.>, because the UK is not in the club anymore, and so now subjected to them like everybody else outside the club.

    Meanwhile, the cost base of the notional <EU27> competitors remains unchanged, so the notional <EU27> competitors all gain a cost advantage over the notional UK employer. Through doing nothing, which is bonus for them :pac:

    Before or after Brexit, the notional UK employer of the notional UK worker in the UK, still competes with notional <non-EU> employers of notional <non-EU> workers outside the EU of course. Only now, the UK employer does not enjoy the 'protective' relief from the EU tariffs, customs processing, regulatory compliance checks, other NTBs <etc.>, and so competes with them on a more level playing field (more level for the notional <non-EU> employers).

    All things (overall procedural costs of goods entering the EU27) being equal, the UK employer must align his cost base on those of his non-EU competitors (FTA'd ones or not, depending on what relationship the UK gets with the EU).

    That means either trimming profitability levels, and/or driving down labour costs (and other overheads), and/or increasing productivity (bearing in mind the UK starts from a red lantern position compared to many <EU27> employers, never mind the <non-EU> ones). Guess which?

    I wonder if Foxconn are scouting in the UK yet? :pac:

    Here's an outline of the non-tariff barriers (NTBs) faced by companies that export food to the EU:
    What this amounts to, of course, is that all food establishments must fully comply with all relevant EU law, unless we can give assurances that our measures are equivalent to Community requirements.

    On day one of Brexit, assurances of "equivalence" will not be hard to give but, if the UK is set upon any measure of deregulation, that will no longer apply. Thus, the UK will have to give the EU assurances that it will maintain current levels of equivalence and will not deviate from them. The actual standards are then subject to continuous monitoring, including site inspections, by Commission officials.

    As it stands, though, the UK would not be able to apply for non-EU status until it has actually left the EU. As part of any transitional agreement, therefore, the UK will have to negotiate with the "colleagues" to ensure continuity of recognition.

    That pre-supposes that the UK stays at the table and negotiates an orderly transition. If Mrs May decides to adopt her "walk away" strategy, then – officially – our establishments disappear. Food exports stop. There is no messing, no compromise. EU law is absolute on this. Unless establishments are approved in accordance with the rules, produce cannot be exported to the EU. For us to be recognised as a non-EU producer, we must eat humble pie and apply formally for recognition.

    However, even if we get past these hurdles, we are not out of the woods. There is then the small matter of Council Directive 97/78/EC laying down the principles governing the organisation of veterinary checks on products entering the Community from third countries.

    We can enact all the Great Repeal Bills we like but there is no getting round this Directive: all exports from third countries must enter the EU via approved Border Inspection Posts, listed here. We can no longer send this type of traffic to Dover - there is no BIP there.

    The closest BIP is Dunkirk, but that can only handle 5,000 consignments a year. That is approximately equivalent to about 300 metric tons a day. Yet, in one day (average), the UK exports 8,000 metric tons of meat (including poultrymeat) to the EU. Include dairy products and all the rest, and we're probably sending double that amount.

    Unless, by dint of heroic negotiation, we can get these requirements waived, UK exports of foods of animal origin will effectively cease once Brexit takes effect. And if Mrs May "walks away", there is absolutely no chance of them continuing.

    Bizarrely, the industry does not seem to have woken up to this threat – and the politicians seem fast asleep. But unless EU law is actually different from that posted on the EU website, and we're living in a parallel universe, UK food exporters are going to have a torrid time in a couple of years.

    http://eureferendum.com/blogview.aspx?blogno=86362

    There are no Border Control Posts (the new name for Border Inspection Posts) on the ROI/NI border (Why would there be? Right now, they're both in the EU) and therefore the only way to import food from the UK, including NI, after Brexit will be to pass through the Border Control Posts at Dublin Port or Shannon Airport.

    For UK food producers exporting to the continent, the nearest Border Control Posts are in Dunkirk and Le Havre.

    However, they are limited in their capacity and couldn't even begin to handle the number of UK trucks that currently come into France each day.

    Even if they were expanded (Who would pay for this? Why would the French or any other EU state pay for customs facilities that would facilitate competition from the UK?) it would take years for the physical infrastructure to be built and the UK's food inspection regimes and rules would have to be approved by the EU. Which is far from guaranteed as the EU has serious issues with the UK's ability to enforce the EU rules as a member () and also because the UK relies heavily on veterinary inspectors from other EU states to inspect food processing plants, which would require continuing freedom of movement if the UK wants to maintain the required staffing levels (https://www.verdict.co.uk/brexit-eu-food-safety-inspectors-stop-ensuring-quality-uk-imports/).

    Here's an outline of the potential implications for the UK's food exports if it doesn't come to an agreement with the EU.
    According to EU law, products of animal origin imported into the EU must be inspected at Border Inspection Posts (BIPs) and products of plant origin at Community Entry Points (CEPs). In practice, these are usually combined in single locations.

    This much is known to regular readers of this blog, with the issue being aired as recently as yesterday. But what I've been unable to do so far is put some figures on the table, to assess how our exports to EU Member States will be affected when we have to be inspected under these regimes.

    It is perhaps best if we stick to France for the moment, from which we can calculate that, of the £9 billion food & drink exports to the EU each year, probably about £4 billion is routed via that country.

    And despite not having any accurate, published information on many lorry-loads that amounts to, I've found a way that we can make a very rough estimate. This is based on a value-to-weight ratio, taking it at about £1.50/kilo, against an average load of 10 tonnes. That gives us about 260,000 truck loads per annum entering the mainland via France.

    A proportion of these loads must be inspected, and if we allow about 20 percent (which is the minimum rate permissible, which can go up to 50 percent – or 100 percent for live animals), that amounts to over 50,000 inspections per annum.

    In France, these inspections are carried out by the Service d'inspection vrinaire et phytosanitaire aux frontiers (SIVEP), a national services established in 2009. Being French, they call their BIPs postes d'inspection frontaliers, of PIF for short. Plants and vegetables go through points d'entrcommunautaires (PEC).

    Now, here's the rub. According to the latest statistics, the entire national service in 2015 inspected 41,137 consignments of products of animal origin, and 38,719 of products of plant origin – about 80,000 in total. The UK inspection requirement would absorb over 60 percent of the entire French throughput in one year.

    But it gets worse. Of the two BIP/CEP installations on the northern French coast, with direct ferry links to the UK, Dunkirk can handle 5,000 consignments a year, while le Havre can handle 16-17,000.

    In other words, the UK's post-Brexit requirement for inspection would be well in excess of twice the conveniently accessible capacity. And it is extremely unlikely that either post would have any significant spare capacity.

    Effectively, to cope with imports of British foods, the French authorities would have build additional capacity equivalent to three times the size of their largest unit, at an approximate cost of £20 million – something along the lines of the Algeciras facility, the largest in Spain. Meanwhile, the inspection service, SIVEP, would have to commit to recruiting and training the 60 additional personnel it would need to run the operation.

    As it stands, we are entirely in the hands of the French, who would no doubt gain politically from sitting on their hands and doing nothing. That would certainly be very popular with French farmers who, a couple of years ago were picketing the le Havre BIP, ironically described as "inspections".

    And, for the moment, that seems to be precisely what they intend to do. When asked about the issue by a journalist from a UK national newspaper, the French department of agriculture gave a somewhat insouciant response that "as article 50 hasn't been invoked we have plenty of time to adapt the facilities as needs be". This, our journalist friend thought, was: "not entirely reassuring".

    Furthermore, this is only French. As much produce again is exported throughout the EU, where a similar level of facilities will have to be found, or new-builds costing up to £20 million will have to be constructed and staffed. This will not only apply to the mainland. Exports to Ireland will also have to be inspected in the appropriate facilities.

    However, with Mrs May still failing to offer clarity as to her intentions, it is difficult to see how the continental authorities could do anything other than wait. The exact nature of the investment will depend entirely on the deal negotiated with the EU, so there is no sense in making what would amount to a speculative investment.

    Should negotiations fail, and the UK reverts to WTO rules, with no agreement on customs and other cross-border issues, this could catapult UK produce into the "high risk" capacity, decided by formal risk assessment procedures which would load the process because of the lack of any information exchange. The inspections would soar to 120,000 or more – amounting to 50 percent above the current throughput. Even theoretical capacity could be exceeded.

    Should the authorities leave any response until agreement has been reached, that could leave a long gap before sufficient capacity was available. It is hard to see how a new-build installation could be completed inside two years and, with planning and commissioning, it could take as long as four years. And then there is the matter of funding. The French might be very reluctant to commit large sums simply to facilitate UK imports.

    One possible alternative is for the UK Government to build a BIP facility this side of the Channel, securing European Commission permission for advance inspection. The facility would have to come under EU supervision, and operate to EU rules, possibly with some professional staff from EU Member States. Some of the existing capacity within the EU might be used.

    Ongoing operational costs would be financed from inspection charges, levied at between £50 and £350 per inspection – plus any laboratory costs – adding millions to the cost of exporting.

    But, for this to work, a decision on a new development would have to be made soon, and there is no indication that this issue has even been recognised for what it is. But there can be no doubt whatsoever that border inspection will become a permanent feature of our relation with the EU – unless Mrs May has a sudden change of heart and decides to keep us in the EEA.

    Oddly enough, the one person who may be best placed to advise our Prime Minister on this is Michel Barnier who, as French Minister of Agriculture, had personal experience of BIPs. Above all, he will need to tell Mrs May, in no uncertain terms, that without inspection facilities, there will be no food exports to the EU.

    Upon this will depend upwards of £9 billion in exports. This is a sizeable chunk of our trade, and a lifeline to our farmers and food processors. Failing to deal with it would precipitate a crisis in the countryside, its extent going far beyond the monetary value of the lost trade.

    http://www.eureferendum.com/blogview.aspx?blogno=86393


    TLDR? UK food and drink exports to the EU would stop without a post-Brexit agreement between the UK and the EU.

    These barriers apply to all countries outside the EU, even ones the EU has free trade agreements (FTAs) with.

    For example, despite the EU-Canada trade deal (due to begin in practice in September), CETA, Canadian meat producers have said they will not have 'commercially viable' access to the EU due to regulatory barriers.
    Canada’s free trade accord with the European Union has failed to remove many of the barriers to shipping red meat to Europe.

    “We do not have what we would call commercially viable access to the European market,” said Ron Davidson, head of international trade for the Canadian Meat Council. “There were a lot of barriers and we have been picking away at them,” said Davidson in an interview.

    Under the Comprehensive Economic and Trade Agreement (CETA), Canada is allowed duty-free exports of 81,011 tonnes of pork, but three obstacles stand in the way.

    The EU wants trichinella-free product and Canada is not officially recognized as free of the worms, which can be transferred from pork to people in raw or undercooked meat.

    It is hoped a trichinella-free standard could be developed according to guidelines set out by the World Organization for Animal Health.

    However, that would be expensive and there is no certainty the EU would accept it. The quota with the EU includes fresh and frozen meat.

    The EU also requires its own health mark on boxes of meat over a tamper proof belt at the time of manufacture in the processing plant.

    The boxes go into a cooler and the serial numbers on the health mark must be in sequence. That would create a lot of additional handling logistics for Canadian companies who ship to many other markets outside of Europe.

    Canadian meat processors also express problems with equivalency inspection requirements with the EU.

    “We supposedly do have equivalence in the meat inspection systems. If it is a real equivalence, the Canadian Food Inspection Agency stamp should be sufficient,” Davidson said.

    On the beef side, Canada was granted duty-free exports of 64,950 tonnes of beef and veal.

    The stumbling block is the use of antimicrobial treatments to remove pathogens like E. coli. Because Europe would not be buying entire carcasses, Canada would be left with items like trim used for grinding meat.

    Those are exported to the United States, where there is a zero tolerance policy for E. coli.

    That means the entire carcass is treated with antimicrobials in Canadian packing plants to avoid the risk of losing the U.S. market.

    “If we turn off interventions, the risk of having an incident at the U.S. border goes up,” Davidson said.

    Canada plans to submit applications to Europe for the addition of two antimicrobial products, which are like vinegar and citric acid. The EU has approved lactic acid for washing carcasses, halves and quarters.

    Meanwhile, European meat suppliers have wide open access to Canadian markets.

    “The day that CETA goes into effect, the 26.5 percent tariff comes off so the European Union is going to have a huge opening of the Canadian market for beef and veal,” he said. “The agreement is not balanced. We would just like to be able to take advantage of the quota we’ve got.”

    Nevertheless, the EU holds promise, said British market analyst Richard Brown of the Gira Meat Club, an international consulting firm monitoring world meat trade.

    “The EU market is a mature market where there is a considerable fortress policy to keep out cheap imports,” he said at the Alberta Beef Industry Conference Feb. 15-17 in Red Deer.

    “There is absolutely scope for Canada to secure an interesting niche position in the European market,” he said.

    “You need to listen very carefully to what it is they want and deliver it and market it in a good way.”

    http://www.producer.com/2017/03/canadian-export-officials-miffed-over-ceta-import-regulations/

    People who obsess over tariffs aren't really thinking. EU tariffs are generally low (except on agricultural products) and can be readily accounted for. For example, if a product has an EU tariff of 5%, it's straightforward to calculate the final selling price and the cost of absorbing that tariff (if the producer chooses to) through price reductions. However, it's almost impossible to figure out the final cost per unit of compliance with the non-tariff barriers, even if they can be complied with.


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    Good morning,

    Not that I'm looking for the most lengthy transition in the world but it is compatible.

    Iceland is in the EEA but also has the freedom to sign free trade agreements. Iceland has just signed one with China.

    That's something to note for those who claim that China wouldn't be interested in a free trade deal with the UK.

    Much thanks,
    solodeogloria

    China has an FTA with EFTA (the European Free Trade Association), of which Iceland is a member.

    If the UK joined EFTA it would become party to EFTA's trade agreements.

    Not that a trade agreement with China is necessarily a good idea. It's not a market economy under WTO rules (the former UK Chancellor, George Osborn, pushed for China to be recognised as a market economy under WTO rules, which would have forced the EU to reduce tariffs on Chinese imports), it dumps under-priced products, including steel, in the EU (efforts to impose anti-dumping tariffs on Chinese steel imported into the EU were being blocked by the UK, putting UK steel producers at risk until late last year: https://www.theguardian.com/politics/2016/apr/01/steel-crisis-uk-accused-blocking-eu-attempts-regulate-chinese-dumping https://www.theguardian.com/business/2016/oct/07/european-union-import-duties-chinese-steel-port-talbot-tata), and having a free trade agreement with China would wipe out many UK producers without the UK gaining much from the deal.

    Of the four EFTA members, Liechtenstein is too small to have any significant goods exports (its total population is less than 40,000) and Iceland and Norway largely rely on exports of food (mainly fish and processed foods made with fish) at which they're really good and for which there's a large demand in China (due to many Chinese being wary about contamination of food produced in China), Switzerland produces high-quality consumer goods and pharmaceuticals, again there's high demand for these in China, including pharmaceuticals, as many Chinese are aware that Chinese products are not made to the same high standards as goods produced in western Europe and there have been many scandals (and deaths) caused by fake medications etc.

    The UK produces little or nothing that would benefit from a free trade deal with China (apart from Scotch whisky) but has many sectors that would be very vulnerable if it was easier and cheaper to bring Chinese-made goods into the UK, as the crisis in UK steel making last year shows.

    The existing EFTA states have very different economies. What suits them won't necessarily suit the UK and it should avoid becoming party to EFTA's trade agreement with China unless China radically changes.


  • Moderators, Business & Finance Moderators Posts: 10,945 Mod ✭✭✭✭Jim2007


    Iceland is in the EEA but also has the freedom to sign free trade agreements. Iceland has just signed one with China.

    And if the UK wants to join the EEA and fully comply with all the obligations including contributions the the EU structural funds, adherence to ECJ ruling etc... that would be fine. But that is not what they want is it? But that does mean that they will not be able to go off and do all the things they are claiming they will do.


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    My posts above have concentrated on food exports from the UK to the EU.

    However, food imports into the UK from outside the EU would also be affected:
    The UK faces having to train a squad of globetrotting animal inspectors once it takes over one of the lesser-known parts of the EU bureaucracy after Brexit.

    From chicken coops in Chile to shrimp farms in Sri Lanka, EU inspectors and vets inspect the health and hygiene of livestock overseas, part of the bloc’s strict controls on produce imported for human consumption. Some 170 European Commission staff carry out up to 240 inspections each year in as many as 130 different countries.

    The UK’s departure from the EU means that unless it reaches a deal to continue to work with Brussels it is likely to have to create its own unit of travelling inspectors to ensure the quality of food imports. Senior vets have warned that without liberal immigration rules, Britain may struggle to find enough qualified staff.

    “We need to plan for the possibility of that scenario where we’re not able to share . . . the EU mechanisms. We would [be required] to do our own inspections. We know it’s work for us to do,” Professor Nigel Gibbens, the UK’s chief veterinary officer, told a British parliamentary committee in March.

    We need to plan for the possibility of that scenario where we’re not able to share . . . the EU mechanisms

    The issue is one of several instances where the UK is set to take on bureaucratic work previously carried out at EU level.

    Food inspection is a substantial task for the European Commission. Data from 2015 show that its vets and inspectors spent a combined 4,720 days on overseas visits. Another 150 staff provide back-office support.

    “The work of the service is vital in relation to international trade in food, animals and plants as the audit results are a major factor in determining which non-EU countries can export to the EU,” said Paola Colombo, director for health and food audits at the commission.

    The commission declined to say what the annual budget for its inspectors was, but overall spending on food safety reached more than €250m in 2015.

    The extra workload means the UK will require scores of veterinary professionals working and travelling from 2019.

    The British Veterinary Association said the UK would need a liberal immigration policy to ensure that there were enough government vets to match the demand. 


    “The government will have to ensure that we have enough veterinary surgeons to undertake these essential roles,” said Gudrun Ravetz, president of the BVA. “Our current workforce of official veterinarians is heavily reliant on non-British EU vets and that is why the BVA has been lobbying hard for the government to guarantee the ongoing working rights of our EU colleagues in the UK.” 

    Travelling vets check animals for disease and harmful levels of drugs, contaminants or pesticides, and ensure they are kept according to EU hygiene rules. Slaughterhouses are also monitored, and laboratory tests are carried out at the UK border. 

    The EU often suggests improvements to conditions or working practices and in extreme cases can impose sanctions such as a trade ban if a country repeatedly flouts the rules.


    Upcoming EU inspections this year include trips to check on poultry in Morocco, fish in Canada and Cura, and cows and pigs in Malaysia, Singapore and South Africa.

    The UK Food Standards Agency declined to comment on whether it would be taking on the extra work from 2019, but told the Financial Times: “Food safety audit and assurance is being considered as part of wider work looking at potential audit and assurance arrangements after the UK leaves the EU.”

    https://www.ft.com/content/c4999e54-3702-11e7-bce4-9023f8c0fd2e?mhq5j=e1

    The threat of suspending food imports into the EU is not an idle one.

    The EU suspended imports of meat from certain Brazilian meat plants and would have imposed a ban on Brazilian meat imports if the Brazilians hadn't voluntarily suspended meat shipments from the affected meat plants.
    BRASILIA (Reuters) - The European Union has asked Brazil to voluntarily suspend all shipments of meat to its member countries to avoid imposing a ban that would take time to lift, but the Brazilian government has not agreed, EU diplomats in Brasilia told Reuters on Thursday.

    Brazilian meat exports have in any case ground almost to a halt following a police investigation into corruption involving food-sanitation inspectors and accusations that rotten products were sold.

    A spokeswoman said Brazilian Agriculture Minister Blairo Maggi was not aware of the request.

    The Brazilian government suspended meat shipments from the 21 meat-packing plants under investigation by the federal police, while insisting the quality of Brazilian meat was not in doubt.

    But European farm groups called on the EU Commission on Thursday to take stronger action against Brazilian meat imports because of the scandal. EU experts meet in Brussels on Friday to decide on possible further measures.

    The EU had already suspended imports from four Brazilian meat-processing facilities earlier this week.

    http://uk.reuters.com/article/us-brazil-corruption-meat-eu-idUKKBN16U2Z5
    One of the biggest markets for Brazilian meat, the European Union has mulled over banning imports from Brazil. In a harsh letter to Brazilian Minister of Agriculture Blairo Maggi, the EU’s Health and Food Security Commissary, Vytenis Andriukaitis, complained that the country has done nothing to regain the trust of international partners.

    In March, a Federal Police operation unveiled a bribing scheme within the Ministry of Agriculture. Auditors got bribes in exchange for fraudulent sanitary permits.

    The document is far harsher than the usual tone of diplomatic letters. It questions the “credibility of official guarantees and the confidence the EU can have in these guarantees.”

    Between May 2 and 12, the EU conducted an audit of Brazilian slaughterhouses and meatpacking companies. In fact, they found “a range of critical deficiencies in most sectors, a number of which are of a serious nature.”

    The EU has been fed up with Brazil’s lack of effort to address the problems with sanitary inspections in the country. Following the Federal Police operation in March, the government simply said that the problem was not widespread and affected only 21 establishments.

    However, Brazilian authorities “considered that no further investigations were necessary in other establishments.”

    Furthermore, Brazil hasn’t planned any measures to strengthen the control systems in place.

    As a matter of fact, the European Commission says that the constant corruption scandals undermine Brazil’s credibility. Blairo Maggi, the Minister of Agriculture, is one of the many politicians under federal investigation.

    Ultimatum

    Brazil has repeatedly ignored recommendations from the EU. The bloc complained that some of the non-conformities have not been corrected over the past six years.

    This time, though, the bloc has made strict demands to Brazil. It wants the country to implement pre-export microbiological checks for all products shipped to the EU.

    As a symbolic gesture, the EU has suspended Brazilian horse meat imports. While the product is not relevant for the Brazil-EU trade, a wider ban could follow. After all, the audit has also found irregularities with poultry and beef.

    The European Union is the second-largest importer of poultry from Brazil ($1 billion in 2016) and third-largest importer of Brazilian meat ($685 million).

    http://plus55.com/brazil-meat-scandal/2017/06/brazilian-meat-eu-ban-imports

    Of course the UK could ditch the food safety standards that it has now due to its EU membership (although the European Union (Withdrawal) Bill proposes to transfer the relevant EU laws into UK law, suggesting that it won't) and allow food imports from anywhere without any quality checks.

    That would certainly lead to cheaper food (not so good for UK farmers perhaps...) but risks widespread food contamination.

    It would also mean that the EU would not permit imports of UK-produced food to the EU if the UK decided not to adopt EU food safety requirements.

    Given the tariff and regulatory barriers to food produced outside the EU, and given that about one-third of the milk produced in Northern Ireland is sent to the republic, the implications for dairy farmers in the north are obvious.
    The cross-border sale of milk from Northern Ireland to the Republic could be at risk following Brexit, it has been claimed.

    Around a third of all milk produced here makes its way to processors over the border.

    But according to industry leaders, if the UK leaves the EU without trade agreements in place, the tariffs that would be imposed would render the cross-border milk trade no longer viable, bringing one of the biggest shake-ups to the industry in decades.

    Around a quarter of all food and drink produced in the UK is sold within EU countries, including £700m worth of goods that go to the Republic.

    But experts have warned it is becoming increasingly likely there will be no trade agreements on agricultural produce when the UK leaves EU.

    Declan Billington, chairman of the Northern Ireland Food and Drink Association (Nifda), said he had no reason to believe the EU would strike a deal for the sector beforehand.

    He indicated it was likely tariffs would lead to a 47% price hike on butter and a 56% rise on beef import and export costs.

    Mr Billington also claimed there would be no room for picking and choosing which sectors would enjoy preferential terms.

    "We can't cherrypick and say we will do a trade deal on automotive but not on aircraft, for example," he explained.

    The Nifda chairman added that EU member states would be reluctant to offer a good tariff on agricultural produce as the UK would no longer be paying into the common agricultural policy.

    However, he insisted there remained opportunities for food and drink in the home market, but only if the transition was carried out smoothly.

    "My personal belief is that Europe will acknowledge the special circumstances of the border here," Mr Billington said.

    "It could be possible to implement tariff-free quotas, so that up to a certain volume of goods can be traded without tariffs.

    "The quotas would be very small to Europe, but large on a Northern Ireland scale.

    "Just over 40% of what we consume in the UK is imported, and we have the opportunity to replace most of that with food produced here.

    "If no trade deal is struck, it's unlikely we'll want to continue importing European food. We're not a wine region, but there's massive opportunities for food producers here to fill that gap."

    Milk processor LacPatrick, formed following the merger between Ballyrashane and Town of Monaghan, has around 1,100 suppliers, mostly based here.

    Chief executive Gabriel D'Arcy said his firm, which has a new £30m processing plant in Artigarvan, Co Tyrone, that can process up to 3.5m litres a day, was preparing for a hard Brexit.

    He added: "Given the tone and content of the key protagonists on the British and European sides, it looks like this will be a hard Brexit, with much disruption likely. All producers need to understand where their processors' assets and markets are, as some processors are going to be more disrupted than others.

    http://www.belfasttelegraph.co.uk/business/news/eu-trade-tariffs-could-sour-sale-of-milk-between-northern-ireland-and-the-republic-35378735.html

    Unfortunately, not one of the food industry spokespersons quoted in that article mentioned the non-tariff barriers, including the necessity to comply with EU food safety standards, instead they talked about tariffs.

    If people who should be experts in their own sectors are stuck talking about tariffs instead of talking about the far more serious non-tariff barriers, the chances of the UK government negotiating a good deal (or indeed any deal) with the EU are greatly diminished.


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  • Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    ambro25 wrote: »
    Currently, the notional UK employer of the notional UK worker in the UK, to supply the <EU28> demand for <good/service>, competes on a level playing field with the notional <EU27> employer of the notional <EU27> worker in the <EU27> country.

    Post-Brexit, the notional UK employer of the notional UK worker in the UK, to supply the <EU28> demand for <good/service>, still competes with the notional <EU27> employer of the notional <EU27> worker in the <EU27> country, but not a level playing field anymore: the UK cost base is impacted by additional tariffs, customs processing, regulatory compliance checks, other NTBs, <etc.>, because the UK is not in the club anymore, and so now subjected to them like everybody else outside the club.

    Meanwhile, the cost base of the notional <EU27> competitors remains unchanged, so the notional <EU27> competitors all gain a cost advantage over the notional UK employer. Through doing nothing, which is bonus for them :pac:

    Before or after Brexit, the notional UK employer of the notional UK worker in the UK, still competes with notional <non-EU> employers of notional <non-EU> workers outside the EU of course. Only now, the UK employer does not enjoy the 'protective' relief from the EU tariffs, customs processing, regulatory compliance checks, other NTBs <etc.>, and so competes with them on a more level playing field (more level for the notional <non-EU> employers).

    All things (overall procedural costs of goods entering the EU27) being equal, the UK employer must align his cost base on those of his non-EU competitors (FTA'd ones or not, depending on what relationship the UK gets with the EU).

    That means either trimming profitability levels, and/or driving down labour costs (and other overheads), and/or increasing productivity (bearing in mind the UK starts from a red lantern position compared to many <EU27> employers, never mind the <non-EU> ones). Guess which?

    I wonder if Foxconn are scouting in the UK yet? :pac:

    So a worker in Ireland competes on the same level playing field with a worker in Poland?

    Tell me, why did Dell up sticks and move manufacturing to Lodz?


  • Registered Users, Registered Users 2 Posts: 5,985 ✭✭✭ambro25


    So a worker in Ireland competes on the same level playing field with a worker in Poland?
    Of course they do: that's exactly what the freedom of movement of workers permits throughout the EU. Your Irish worker is perfectly at liberty to go work in Poland, if the job and pay is better there; and reciprocally.

    But I note what looks like sleight-of-hand in your reply: you will have noted of course, that I referred to their respective employers in my post, competing against each other within the SM to meet EU28 demand; not to the workers themselves. So, er, what gives?

    With the benefit of hindsight, perhaps I should have qualified the level playing field in my post as a regulatory playing field (which is what the EU achieves with the SM indeed, for any EU-based business), since -but of course- the labour cost differentiator constituted by local living standards is always at play, both within and outside the EU.

    All the same, we can now take from your reply, that you do understand that labour cost differentiator constituted by local living standards perfectly well, and therefore that there is no reason to doubt that you understand its effect on price competition both within and from outside of the EU equally well.

    That provides a useful context in which to appreciate your earlier replies to Jim2007's point (that a worker in the Brexited UK will compete with a worker in e.g. China, rather than Poland, hence expected drop in UK worker remuneration):
    Welcome to free market economics.
    You do know competitive bidding has nothing to do with the eu, Brexit or anything else, don't you?
    don't you think? :pac:
    Tell me, why did Dell up sticks and move manufacturing to Lodz?
    For the exact same reason UK car assemblers will eventually move jobs to Slovakia; Airbus UK will eventually move manufacturing to [Toulouse/elsewhere intra-EU]; Square Mile banks will eventually move/repatriate Euro trading jobs to [Dublin/Paris/Frankfurt]; and services exporters the length and breadth of the UK are opening EU subsidiaries and creating EU jobs instead of UK jobs: to service the EU Single Market at least cost.

    The only alternative available to UK exporters to the EU, to remain price-competitive in view of these new exporting costs, is to absorb these new exporting costs either into their profit margin or into their UK labour costs (Jim2007's point), or a combination of both. I asked you "guess which?", and I take this opportunity to ask you again :)


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    So a worker in Ireland competes on the same level playing field with a worker in Poland?

    Tell me, why did Dell up sticks and move manufacturing to Lodz?

    Countries that want to maintain high wages for workers need high-value, high productivity sectors, not assembly plants putting parts together.

    The Dell plant was no longer viable just like Irish car assembly plants weren't viable after Ireland joined the EEC and the exemptions that initially protected them expired. Ford closed down its Cork car assembly plant in 1984.

    Infamously, the government of Charlie Haughey in the same period of the early 1980s paid the wages of workers at the Talbot car assembly plant in Co. Dublin, although even having the state pay its workers' wages (hardly a sustainable economic model) didn't stop the plant from eventually closing.
    A typical example was the Talbot car workers dispute in 1981. Talbot wished to close its assembly plant in Santry, north Dublin. Haughey, desperate not to have a messy dispute on his constituency doorstep on the eve of an election, simply guaranteed the workers that the State - i.e. everyone else in Ireland - would pay their salaries!

    https://www.irishtimes.com/culture/the-higher-he-rose-the-lower-he-stooped-1.250756

    Apart from the massive hit to the economy (and thus employment and wages) caused by the self-inflicted damage caused by allowing a stupid property bubble to inflate and burst, Ireland has coped very will with the addition of new member states to the EU and wages have increased in Ireland since 2004 when 10 new members, including Poland joined, while unemployment fell until the bloody stupid property bubble burst.

    The property bubble in Ireland wasn't caused by new member states joining.

    And the fallout from the property bubble bursting wasn't caused by new member states joining.

    If there had been no property bubble, Irish employment rates and wages could have held up since 2004 without interruption.

    Cumulative wage growth in Poland since it joined the EU has been over 30%:

    https://tradingeconomics.com/poland/wage-growth

    The chart shows wages increasing in every period over the past 10 years, albeit much more slowly in some periods than in others (eg. look at how fast wages increased in Poland in 2007 and 2008 compared to after 2008).

    Per capita GDP in Poland increased from $11322.05 in 2007 to $15,048.98 in 2016. That's an overall increase of about 33% in 10 years despite the global economic crash that slowed growth between 2009 and 2016.

    The more realistic measure of Irish wealth (GNI*) now being trialled by the Central Stastics Office put the overall size of the Irish economy at €189.2 billion, or €39,732 per capita (equivalent to $45,767).

    Since it joined the EU Poland has gone from being about one-fifth as wealthy as Ireland was in 2004 to about one-third as wealthy as Ireland was in 2016.

    The rate at which it's converging on north-western Europe is much faster than the rate at which Ireland converged on the rest of north-western Europe after it joined the EEC.

    For now, Poland has some competitive advantages when it comes to labour and others costs. But those advantages are being eroded.

    Eventually there will be convergence between Polish (and other cheaper EU countries) and western European wage levels as there was with Irish and western European wage levels.

    Despite the cost advantages that the cheaper EU countries have over Ireland, it hasn't stopped Ireland from being the favourite choice of country for foreign investment into the EU:
    Ireland is the leading onshore European Union (EU) Organisation for Economic Co-operation and Development (OECD) white-listed location for Foreign Direct Investment (FDI), and 2015 was a record year for FDI into Ireland.

    Ireland was identified as the number one destination for U.S. foreign direct investment in a 2014 report commissioned by the American Chamber of Commerce in Ireland.

    The Irish economy is enjoying a period of renewed growth. Gross Domestic Product (GDP) rose by 5.2 percent in 2014 and by an estimated 6 percent last year. The biggest driver of Ireland’s economic success is FDI. As the most globalized country in the western world, Ireland’s export industry is thriving, which is not surprising given some of the following independent analysis:

    – “In the top five best countries to do business” – Forbes Magazine 2014;

    – “Number one in the world for investment incentives” – IMD World Competitiveness Yearbook 2014;

    – “Best place to invest in Western Europe” – Site Selection magazine 2014;

    – “World’s most globalised country” – KOF – Globalisation List 2015;

    – “In the top 10 most innovative countries in the world” – (2015 Global Innovations Index (GII));and

    – “World leader in attracting high value FDI projects” – IBM Global Locations Trends 2015.

    The figures speak for themselves:

    U.S .companies have invested €240bn in FDI in Ireland;
    130,000 people are employed in U.S. companies in Ireland. Those companies have invested more than $277bn in Ireland since 1990;
    U.S. companies in Ireland export over $80bn in goods and services annually (4 times more than US Companies in China);
    US FDI in Ireland increased by 42 percent in the first nine months of 2014 to $37bn. During the same period, total investment to Europe fell 19 percent to $115 billion;
    Research & Development (R&D) outlay by U.S. affiliates in Ireland more than doubled between 2000 and 2012 from $465 million to $1.5 billion; and
    U.S. assets in Ireland total $1.2tn.

    https://leman.ie/ireland-the-number-one-destination-for-foreign-direct-investment/

    Ireland attracted 4.3% of all FDI (foreign direct investment) into the EU in 2015*, even though it has less than 1% of the EU's total population, only represents 1.7% of the total EU economy and despite the fact that three other EU countries (Cyprus - 12.5%, Bulgaria - 10%, Hungary - 9%) have corporation tax rates equal to or lower than Ireland's corporation tax rate (source: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html).

    *
    Foreign companies are continuing to flock to Ireland despite the twin shocks of Brexit and a €13bn adverse tax ruling against technology giant Apple last year.

    The country, which has been a magnet for US technology and pharmaceutical companies for nearly three decades, saw a record 99 new investments in 2016 that helped to create jobs at the fastest rate for 15 years, according to figures from IDA Ireland, the inward investment agency.

    ...

    But there had been a “significant volume of specific queries” from UK, US and Asian companies to IDA Ireland after the Brexit referendum, the agency said on Tuesday.

    Companies were making “detailed due diligence of a small number of locations within Europe” to ensure they had continued access to the European single market, and “Ireland is among those locations”, it said.

    ...

    The data show Ireland attracted 4.3 per cent of all FDI coming into the EU in 2015 although it represents just 1.7 per cent of the EU economy.

    https://www.ft.com/content/06fe175e-d1c6-11e6-9341-7393bb2e1b51?mhq5j=e1

    Summary: Poland and other EU countries have cost advantages compared to Ireland. As they grow increasingly wealthy, these cost advantages are being eroded. Despite the current cost advantages other EU countries have over Ireland, it remains the number one recipient of US foreign direct investment (FDI) out of all the EU countries and attracts over four times as much FDI per capita than the EU average.


  • Registered Users, Registered Users 2 Posts: 16,644 ✭✭✭✭Zubeneschamali


    ambro25 wrote: »
    The only alternative available to UK exporters to the EU, to remain price-competitive in view of these new exporting costs, is to absorb these new exporting costs either into their profit margin or into their UK labour costs

    Thanks to the UK staying out of the Euro, some of this will happen automatically via currency movements.

    Sterling has weakened considerably against the Euro, so labour in the UK is cheaper now (in Euros) than it was. Today's "UK in a Changing Europe" remoaner report predicts a further 10-15% fall in the event of a no-deal Brexit.


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    If cheaper labour was the deciding factor in all cases how come Ireland gets such a disproportionate share of FDI within the EU?

    And how come the countries around the world with the cheapest labour costs (presumably mostly in sub-Saharan Africa) don't have the lowest unemployment rates?

    It's almost as if cheap labour is only one factor when companies make decisions about where to locate.

    There's little point in being able to pay your workers less if you can't sell the products made by those workers into one of your largest markets.


  • Registered Users, Registered Users 2 Posts: 5,806 ✭✭✭An Ciarraioch


    Ironically, after the UK spent the last few years calling for freedom of movement restrictions, Britons are facing the first threats:

    https://www.theguardian.com/politics/2017/jul/20/britons-living-in-europe-could-lose-right-to-live-in-another-eu-country


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    Sports Direct, a major UK retailer, has seen a near 60% fall in underlying profits mainly as a result of higher import costs due to the fall in the value of Sterling as a result of the Brexit referendum vote.
    Sports Direct has reported a near-60% drop in annual profits but insisted it is still on track to become the “Selfridges of sport”.

    Underlying profits before tax at the sportswear chain slumped by 58.7% from £275.2m to £113.7m in the year to the end of April. The retailer also announced it has appointed a finance director for the first time since 2013.

    The company’s billionaire founder and chief executive, Mike Ashley, blamed the fall in profits on the pound’s decline against the dollar, which he said had a “significant impact”.

    https://www.theguardian.com/business/2017/jul/20/sports-direct-weak-pound-profits-mike-ashley

    Sports Direct is notorious for the poor wages it pays employees and the poor working conditions it makes them endure.
    MPs have accused one of Europe's biggest retailers of not treating its workers like humans.

    A report by the Business, Innovation and Skills committee states Sports Direct founder Mike Ashley must be held accountable for company failings.

    Evidence suggested Sports Direct's working practices were similar to those of a Victorian workhouse, one MP said.

    In response, Sports Direct said in a statement that its policy is to treat all people "with dignity and respect".

    It comes after Mr Ashley recently told MPs the firm was being investigated over staff being paid below the minimum wage.

    Union officials told MPs that in one case an employee had given birth in a toilet at the company's warehouse base in Shirebrook, Derbyshire, because she feared losing her job if she called in sick.

    Allegations also surfaced of some workers being promised permanent contracts in exchange for sexual favours.

    Committee chairman Iain Wright said evidence heard by MPs last month suggested Sports Direct's working practices "are closer to that of a Victorian workhouse than that of a modern, reputable High Street retailer".

    "It's seems incredible that Mike Ashley, who visits the warehouse at least once a week, was unaware of these appalling practices," Mr Wright said.

    http://www.bbc.co.uk/news/uk-england-derbyshire-36855374

    The UK parliament's report into working conditions at Sports Direct:

    https://publications.parliament.uk/pa/cm201617/cmselect/cmbis/219/219.pdf

    I wonder what methods Sports Direct will use to try to regain profitability?

    Cut wages and conditions for ordinary workers or cut management salaries and bonuses?

    Or will the founder and senior managers just carry on living it up?



    http://metro.co.uk/2017/07/04/sports-directs-mike-ashley-had-12-pints-before-vomiting-in-fireplace-during-meeting-6753231/


  • Registered Users, Registered Users 2 Posts: 1,443 ✭✭✭sondagefaux


    Ironically, after the UK spent the last few years calling for freedom of movement restrictions, Britons are facing the first threats:

    https://www.theguardian.com/politics/2017/jul/20/britons-living-in-europe-could-lose-right-to-live-in-another-eu-country

    The EU is hardly going to permit freedom of movement for British citizens unless the rights they're granted are reciprocated by the UK for citizens of EU countries.

    A majority of respondents to this survey said they would be satisfied with freedom of movement if the UK was allowed to restrict benefit payments to new arrivals.

    DE7_1iTXcAAxn7M.jpg

    As of now, the UK restricts benefit payments to new arrivals for the first three months (no Jobseekers, no rent payments, no non-emergency NHS treatment) and the deal Cameron got the EU to agree to before the referendum would have allowed the UK to impose restrictions in in-work subsidies to people on low incomes (known as Working Tax Credit/Child Tax Credit) and on child benefit payments.

    In addition, existing EU law permits the UK to remove other EU nationals after three months if they haven't found a job/started a course of study in a recognised establishment and can't otherwise support themselves and their dependants.

    Basically, a majority of British people are in favour of remaining in the Single Market (or even remaining in the EU) and are willing to accept freedom of movement (with some restrictions) to permit this:
    Britons would rather see a Brexit based on compromise which retains access to the single market and keeps freedom of movement than see a hardline departure from the European Union without a deal with Brussels, according to new research. Such is the level of concern about the damage to the economy that could be caused by a so-called “hard Brexit”, which could see the UK revert to the World Trade Organisation (WTO) system of tariffs, that voters would prefer to abandon the process and remain in the European Union than see such a scenario. “The British public are sophisticated enough to understand that they can’t ‘have their cake and eat it’ and will need to make and accept compromises to reach a deal.”

    The comprehensive study by King’s College London, Cambridge University and think-tank RAND Europe found that rather than making curbing inward European Union migration to the UK the main goal of Brexit, Britons want primacy to be given to striking trade deals both with the EU and other countries. The findings suggests that Britons do not agree with Prime Minister Theresa May’s insistence that “no deal for Britain is better than a bad deal” and are willing to surrender a degree of sovereignty in return for the most favourable trading conditions.

    Nearly two thirds of people want a deal which maintains close ties with Brussels, including an acceptance of some EU legislation and a need to continue contributing to the Brussels budget. The single most popular model, backed by nearly 40 per cent of voters, is for Brexit to result in a “Norway-style” relationship with Brussels from 2019 onwards.

    Public services
    The study, based on a new methodology which asks people to choose between different Brexit scenarios and priorities, found in particular that Britons, including those who voted Leave, are not fixated with halting migration. Instead they are concerned about managing its impact on public services, for example by restricting access only to non-UK citizens who have jobs. The authors of the study said it found that Britons were pragmatic and recognised a need to compromise to reach a deal with Brussels. David Howarth, professor of law and public policy at Cambridge University, said: “The public’s ranking of a Norway-style deal above remaining in the EU is not surprising in the light of the referendum result. But the public’s ranking of remaining in the EU above crashing out with no deal into WTO terms should worry those who claim that the referendum and the general election give a mandate for Brexit at any price.”

    Norwegian model
    The survey of nearly 1,000 voters found that 37 per cent of Britons favoured an arrangement which retained membership of the single market but involved leaving the customs union, meaning the UK could strike its own trade deals outside the EU. Such a model would closely resemble Norway’s relationship with Brussels. A further 22 per cent favoured an even closer relationship, with the EU retaining the power to legislate in areas such as employment and the environment. Only a quarter of people prefer a “full sovereignty” option with Britain making all its own laws. Jonathan Grant, professor of public policy at King’s College London, said: “Our research clearly shows that the British people do not wish to head over a cliff edge and leave the EU on WTO rules – they want a proper deal. “The British public are sophisticated enough to understand that they can’t ‘have their cake and eat it’ and will need to make and accept compromises to reach a deal.”

    Immigration
    The study found that when it comes to control of immigration, Britons are primarily motivated by a desire to manage access to public services, with a majority favouring an arrangement whereby the use of healthcare or education is restricted to those with jobs and their dependents. It is accepted that the same arrangement should apply to Britons in the EU. The disparity between university-educated Britons and those without degrees, which saw 57 per cent of those with degrees vote for Remain in the referendum, was also reflected in the survey. Those with degrees are least likely to favour a Brexit which will allow the UK to make all its own laws and prefer to see Britain remain subject to EU laws in areas such as trade, employment, the environment and consumer protection. Those with a lower level of education have the opposite view, preferring Britain to have direct control over all legislation.

    https://inews.co.uk/essentials/news/uk/britons-rather-stay-european-union-crash-hard-brexit-study/


  • Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Countries that want to maintain high wages for workers need high-value, high productivity sectors, not assembly plants putting parts together.

    The Dell plant was no longer viable just like Irish car assembly plants weren't viable after Ireland joined the EEC and the exemptions that initially protected them expired. Ford closed down its Cork car assembly plant in 1984.

    Infamously, the government of Charlie Haughey in the same period of the early 1980s paid the wages of workers at the Talbot car assembly plant in Co. Dublin, although even having the state pay its workers' wages (hardly a sustainable economic model) didn't stop the plant from eventually closing.



    https://www.irishtimes.com/culture/the-higher-he-rose-the-lower-he-stooped-1.250756

    Apart from the massive hit to the economy (and thus employment and wages) caused by the self-inflicted damage caused by allowing a stupid property bubble to inflate and burst, Ireland has coped very will with the addition of new member states to the EU and wages have increased in Ireland since 2004 when 10 new members, including Poland joined, while unemployment fell until the bloody stupid property bubble burst.

    The property bubble in Ireland wasn't caused by new member states joining.

    And the fallout from the property bubble bursting wasn't caused by new member states joining.

    If there had been no property bubble, Irish employment rates and wages could have held up since 2004 without interruption.

    Cumulative wage growth in Poland since it joined the EU has been over 30%:

    https://tradingeconomics.com/poland/wage-growth

    The chart shows wages increasing in every period over the past 10 years, albeit much more slowly in some periods than in others (eg. look at how fast wages increased in Poland in 2007 and 2008 compared to after 2008).

    Per capita GDP in Poland increased from $11322.05 in 2007 to $15,048.98 in 2016. That's an overall increase of about 33% in 10 years despite the global economic crash that slowed growth between 2009 and 2016.

    The more realistic measure of Irish wealth (GNI*) now being trialled by the Central Stastics Office put the overall size of the Irish economy at €189.2 billion, or €39,732 per capita (equivalent to $45,767).

    Since it joined the EU Poland has gone from being about one-fifth as wealthy as Ireland was in 2004 to about one-third as wealthy as Ireland was in 2016.

    The rate at which it's converging on north-western Europe is much faster than the rate at which Ireland converged on the rest of north-western Europe after it joined the EEC.

    For now, Poland has some competitive advantages when it comes to labour and others costs. But those advantages are being eroded.

    Eventually there will be convergence between Polish (and other cheaper EU countries) and western European wage levels as there was with Irish and western European wage levels.

    Despite the cost advantages that the cheaper EU countries have over Ireland, it hasn't stopped Ireland from being the favourite choice of country for foreign investment into the EU:



    https://leman.ie/ireland-the-number-one-destination-for-foreign-direct-investment/

    Ireland attracted 4.3% of all FDI (foreign direct investment) into the EU in 2015*, even though it has less than 1% of the EU's total population, only represents 1.7% of the total EU economy and despite the fact that three other EU countries (Cyprus - 12.5%, Bulgaria - 10%, Hungary - 9%) have corporation tax rates equal to or lower than Ireland's corporation tax rate (source: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html).

    *


    https://www.ft.com/content/06fe175e-d1c6-11e6-9341-7393bb2e1b51?mhq5j=e1

    Summary: Poland and other EU countries have cost advantages compared to Ireland. As they grow increasingly wealthy, these cost advantages are being eroded. Despite the current cost advantages other EU countries have over Ireland, it remains the number one recipient of US foreign direct investment (FDI) out of all the EU countries and attracts over four times as much FDI per capita than the EU average.

    So what are you claiming, that Ireland has some sort of hugely productive workforce and that attracts us companies, it maybe it's that famous Irish hospitality they come looking for?

    Or maybe it's just the numerous loopholes in Irish law that allows them to greatly reduce their European tax liability?


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  • Registered Users, Registered Users 2 Posts: 34,119 ✭✭✭✭listermint


    So what are you claiming, that Ireland has some sort of hugely productive workforce and that attracts us companies, it maybe it's that famous Irish hospitality they come looking for?

    Or maybe it's just the numerous loopholes in Irish law that allows them to greatly reduce their European tax liability?

    Plenty of other countries have the same loopholes. So I guess it is the hospitality, the culture the ease of operation.

    Or maybe it's a combination of all of the above. Would you not agree.


This discussion has been closed.
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