Brexit discussion thread II

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.

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.

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:

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.

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.

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.”

Fratton Fred wrote: »

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?

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!

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.

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.

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”.

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.