Brexit discussion thread II

Peregrinus · 15-08-2017 08:11AM

Jep Gambardella wrote: »

I suppose the obvious question is why the EU would agree to this. Post customs union, the UK will be competing with the EU in trade terms and why would it want to give it a "head start" with its foot half in, half out of the customs union? Everyone's going to have to scramble to adapt and why would the UK allow the EU to do so within the comfort blanket of the customs union.

Because in the long run it's no skin off the EU's nose. If the UK leaves the customs union in 2019, spends a couple of years negotiating free trade agreements, and then puts them in place from 2021, that's not very different as far as the EU is concerned than if the UK negotiates trade deals between 2019 and 2021, and then leaves the customs union and implements the trade deals. The UK ends up with the same free trade deals in either case, and whatever competition, etc that presents to the EU is presented in either case.

Having a two-year gap with no deals would impose a lot of pain on the UK, but it would confer no corresponding advantage on the EU. Therefore, in a rational negotiation, the EU will trade this for something that it wants.

Chips Lovell · 15-08-2017 08:15AM

I'm not sure. Company X in Germany competes with company Y in the UK for export business to the US. If company Y finds itself outside the customs union for a number of years, it is to the advantage of company X. Company X and its peers will lobby their government accordingly.

murphaph · 15-08-2017 08:22AM

I tend to agree with the UK that the border issue is very difficult to propose solutions for without knowing the future customs regime. We might like a solution now to the problems created by Brexit but logically it seems impossible to do anything constructive here until trade itself is on the table.

The stay in the customs union but sign FTAs with others seems like the UK is asking a huge amount of the EU, basically asking us to hold their hand while they step out into the big bold world on their own. Ireland is definitely the UK's best friend here, if there is even the faintest chance of the EU accepting this sort of proposal. I'd say several EU states would see absolutely no point in that for the EU.

Personally I would allow them to do it. They are cutting their own throats but the blood will spray us too. I would however not view it as punishing them if the EU decides not to entertain this. The UK is essentially asking a huge favour of the EU.

Peregrinus · 15-08-2017 08:30AM

Jep Gambardella wrote: »

I'm not sure. Company X in Germany competes with company Y in the UK for export business to the US. If company Y finds itself outside the customs union for a number of years, it is to the advantage of company X. Company X and its peers will lobby their government accordingly.

No. The UK being in the customs union does not give it any particular right to export to the US, and equally being out of the customs union does not give in any particular advantage in exporting to the US either. Company X and Company Y already compete with one another in the US market; that competition is unaffected by whether they are in a customs union with one another or not.

The US is perhaps not the best example you could have picked, though. Suppose that part of the UK's transitional participation in the customs union is also transiational participatin in EU trade agreements with third countries. (This isn't a given; the third countries might feel that they should have a say. But suppose it is.) There's no EU/US free trade agreement yet, but there is say, an EU/South Korea agreement. So rerun your example using South Korea rather than the US, and assuming that the UK gets the benefit of the SK/EU trade agreement during the transitional period.

Yes, now it would be advantageous to Company X to sling out the UK and, with it, Company Y. Still, the benefit accruing to the EU is pretty marginal and diffuse and is dependent on a couple of assumptions, whereas the disadvantage to the UK of being out of the customs union and with no
trade agreement in place is pretty severe. So, given the balance of interests, I would expect the EU to make the relatively minor (to them) concession of allowing this, in return for whatever relatively large (to the UK) concession the UK should be willing to make to secure this.

Basically, each side will be readiest to give away whatever costs them least, and keen to gain whatever matters most to them. This particular item is one which will matter more to the UK than to the Union, so I expect them to get it.

solodeogloria · 15-08-2017 08:31AM

murphaph wrote: »

I tend to agree with the UK that the border issue is very difficult to propose solutions for without knowing the future customs regime. We might like a solution now to the problems created by Brexit but logically it seems impossible to do anything constructive here until trade itself is on the table.

The stay in the customs union but sign FTAs with others seems like the UK is asking a huge amount of the EU, basically asking us to hold their hand while they step out into the big bold world on their own. Ireland is definitely the UK's best friend here, if there is even the faintest chance of the EU accepting this sort of proposal. I'd say several EU states would see absolutely no point in that for the EU.

Personally I would allow them to do it. They are cutting their own throats but the blood will spray us too. I would however not view it as punishing them if the EU decides not to entertain this. The UK is essentially asking a huge favour of the EU.

Good morning!

In what may be a rare form of agreement with you on this thread so far.

I think this is a lot to ask of the EU. If it's given I think we need to see concrete proposals on payment irrespective of how Jacob Rees-Mogg and other harder line Brexiteers feel about it.

Much thanks,
solodeogloria

Chips Lovell · 15-08-2017 08:31AM

The other thing is that the border issue may be negotiable now the UK has confirmed it's leaving the customs union. You could conceivably negotiate on the basis that the UK is definitely leaving and decide what the border will look like, regardless of whether it happens in 2019 or 2021/22

Chips Lovell · 15-08-2017 08:34AM

You're right, the US isn't the best example.

The other issue to consider is whether it would be advantageous to the EU to have a hard stop, since some firms based in the UK may relocate to the EU in the absence of any trade agreements post 2019.

Fratton Fred · 15-08-2017 08:54AM

Jep Gambardella wrote: »

You're right, the US isn't the best example.

The other issue to consider is whether it would be advantageous to the EU to have a hard stop, since some firms based in the UK may relocate to the EU in the absence of any trade agreements post 2019.

Advantageous to the eu maybe, but disastrous for Ireland. It will also mean increased tariffs and potential decrease in trade for lots of eu exporters whose largest export market is the UK.

Chips Lovell · 15-08-2017 08:59AM

But the UK is leaving the customs union anyway you see. At the moment, all they're looking is a temporary stay of execution to try get their house in order.

KindOfIrish · 15-08-2017 09:03AM

Fratton Fred wrote: »

Advantageous to the eu maybe, but disastrous for Ireland. It will also mean increased tariffs and potential decrease in trade for lots of eu exporters whose largest export market is the UK.

Ireland is EU. What's good for EU good for Ireland as well. Forget about UK. It's does not exists any longer. I have impression that some Irish even after century of independence still haven't left British Empire.

jm08 · 15-08-2017 09:06AM

solodeogloria wrote: »

Good morning!

Apparently the border paper is coming tomorrow but I do agree broadly with the UK government when they say that the border can't be dealt with without knowing the customs arrangements that the EU will give or indeed the trade terms.

I guess the idea must be to be as ambitious as possible and see where they get to. I think it is very ambitious.

I agree with you though that the money issue must be resolved as soon as possible. I don't think it should be paid until trade terms are clear but they do need to agree on this. Perhaps the UK can use that as leverage to get concessions elsewhere such as on this customs arrangement.

EDIT: also fascinating that you say that the border dictates the trade arrangement. I think the UK see it the other way around. Trade and customs terms dictate the border.

Much thanks,
solodeogloria

But its very simple - if the UK chose not to stay within the Customs Union/Single Market and negotiates some sort of a trade agreement, the EU is going to need customs checks and the UK is going to need people checks. The only question is where this border is going to be - in the Irish sea or on the island of Ireland. I doubt if GB really cares where it is, but unionists in NI will care (though not as many as one might suspect).

Water John · 15-08-2017 09:18AM

A major global event, with consequent food security issues in the UK, wouldn't be long changing minds about the EU after Mar 019.

ancapailldorcha · 15-08-2017 09:27AM

KindOfIrish wrote: »

Ireland is EU. What's good for EU good for Ireland as well. Forget about UK. It's does not exists any longer. I have impression that some Irish even after century of independence still haven't left British Empire.

Not necessarily. Irish farmers are heavily dependent on being able to export to the UK. In addition, Ireland will need to ratify any deal.

jm08 · 15-08-2017 09:31AM

Fratton Fred wrote: »

Advantageous to the eu maybe, but disastrous for Ireland. It will also mean increased tariffs and potential decrease in trade for lots of eu exporters whose largest export market is the UK.

Disasterous for Ireland as food exports tend to have the highest WTO tariffs. Not so bad for a country like Germany whose top exports are cars to the UK and which carry low tariff rates (around 10%).

Since the UK imports so much food (only 60% food sufficient), its going to hit the British public very badly.

Fratton Fred · 15-08-2017 09:49AM

KindOfIrish wrote: »

Ireland is EU. What's good for EU good for Ireland as well.

Not necessarily. being hard on the UK may be a good lesson for other countries and therefore dissuade others from leaving. This could mean a hard border, which would be disastrous for Ireland.

KindOfIrish wrote: »

Forget about UK. It's does not exists any longer.

What the **** is that state to the north and east then?

Fratton Fred · 15-08-2017 09:51AM

Jep Gambardella wrote: »

But the UK is leaving the customs union anyway you see. At the moment, all they're looking is a temporary stay of execution to try get their house in order.

the closest possible trading relationship is to the benefit of the UK and the EU, is it not? This buys time and will help the UK and eu to create an ongoing relationship that means the UK is in the eu in everything but name only, which is what the smart money seems to think will happen

oppenheimer1 · 15-08-2017 09:57AM

Fratton Fred wrote: »

the closest possible trading relationship is to the benefit of the UK and the EU, is it not? This buys time and will help the UK and eu to create an ongoing relationship that means the UK is in the eu in everything but name only, which is what the smart money seems to think will happen

Yes and No. While the deal the UK is seeking is essentially requesting EU rights without the responsibilities would allow trade to continue essentially unchanged in the short term, in the long term it will have the effect of undermining the union. If the UKs departure from the union is going to be the template, then it shouldn't be easy.

The EU should be turning the screw to extract the highest concessions from the UK whilst minimising the impact on EU countries.

joeysoap · 15-08-2017 09:57AM

I apply for membership of a club. I Agree to the rules and membership fees. After joining I continually complain the club isn't being run to my liking and I would like some changes, and the fees are too steep and I want a reduction.

Later I announce the club is not for me and I'm leaving. The club announce that before leaving. I have a bill to settle and a few outstanding matters to sort out. I (sort of) acknowledge those points but pass no real heed to them.

In the meantime I ask to keep the benefits of membership for a period while I sort out where I'm going. Not a member so no rules or fees of course.

Heard Pat Cox on the radio this morning and he mentioned something about what UK wants incompatible with EU rule 28b (?)

Solo: a personal question. Out of curiosity what passport do you hold?
And the same to Fratton Fred.

Fratton Fred · 15-08-2017 10:14AM

oppenheimer1 wrote: »

Yes and No. While the deal the UK is seeking is essentially requesting EU rights without the responsibilities would allow trade to continue essentially unchanged in the short term, in the long term it will have the effect of undermining the union. If the UKs departure from the union is going to be the template, then it shouldn't be easy.

The EU should be turning the screw to extract the highest concessions from the UK whilst minimising the impact on EU countries.

Turning the screws? and what would happen if the UK said no?

What conversation do you think Leo is having with Junckers at the moment, do you think he is telling him to turn the screws and to hell with the consequences?

joeysoap wrote: »

I apply for membership of a club. I Agree to the rules and membership fees. After joining I continually complain the club isn't being run to my liking and I would like some changes, and the fees are too steep and I want a reduction.

Later I announce the club is not for me and I'm leaving. The club announce that before leaving. I have a bill to settle and a few outstanding matters to sort out. I (sort of) acknowledge those points but pass no real heed to them.

In the meantime I ask to keep the benefits of membership for a period while I sort out where I'm going. Not a member so no rules or fees of course.

Heard Pat Cox on the radio this morning and he mentioned something about what UK wants incompatible with EU rule 28b (?)

Solo: a personal question. Out of curiosity what passport do you hold?
And the same to Fratton Fred.

except the eu isn't a club, it is an economic union. If it was a club, half its members wouldn't get paid for being members.

I have a British passport, not that it is relevant.

solodeogloria · 15-08-2017 10:28AM

joeysoap wrote: »

I apply for membership of a club. I Agree to the rules and membership fees. After joining I continually complain the club isn't being run to my liking and I would like some changes, and the fees are too steep and I want a reduction.

Later I announce the club is not for me and I'm leaving. The club announce that before leaving. I have a bill to settle and a few outstanding matters to sort out. I (sort of) acknowledge those points but pass no real heed to them.

In the meantime I ask to keep the benefits of membership for a period while I sort out where I'm going. Not a member so no rules or fees of course.

Heard Pat Cox on the radio this morning and he mentioned something about what UK wants incompatible with EU rule 28b (?)

Solo: a personal question. Out of curiosity what passport do you hold?
And the same to Fratton Fred.

Good morning!

I've only got an Irish passport because I'm Irish. I also question the relevance of this question.

EDIT: can you please tell us why you asked this question?

I think the UK should resolve this payment issue. From what Davis has said this morning they are being incredibly hardball on this.

I think you're wrong to say this is about membership fees. It's about commitments the UK has made. It's not about what the UK owes but what the UK committed to give while still a member.

The UK should still arrange to cover these. I think it shouldn't go north of £36bn but that it should be arranged for.

Much thanks,
solodeogloria

swampgas · 15-08-2017 10:45AM

Fratton Fred wrote: »

except the eu isn't a club, it is an economic union. If it was a club, half its members wouldn't get paid for being members.

I was watching a film last night (Arrival) and the term "non zero sum game" popped up.

I wonder how much the adversarial political culture of the UK drives a "winner takes all" mentality?

The whole idea of a union like the EU is that it is very much more than a zero sum game. Yet my impression of the UK's approach to the EU is one where zero sum game tactics are prevalent. The fact that the UK is a net contributer is seen as a huge negative, yet the advantages of being in a huge single market are rarely quantified or defended. The idea that someone else is spending their money seems to drive people nuts.

You make a good point that the EU is not (entirely) like a golf club because half the members would be being paid to be members.

However, to butcher the analogy even further, you could consider that the weaker members are getting grants to help them raise their game, raise their income, and buy better equipment from the club shop. Eventually the weaker members get stronger and the golf club as a whole becomes more powerful and influential.

It's interesting that UKIP types like Farage don't just want Brexit, they want the EU destroyed. A strong EU seems to scare them, even when they are part of it. As if the EU must be destroyed so that UK can be strong.

It really does feel like the UK isn't a team player.

Fratton Fred · 15-08-2017 11:50AM

swampgas wrote: »

I was watching a film last night (Arrival) and the term "non zero sum game" popped up.

I wonder how much the adversarial political culture of the UK drives a "winner takes all" mentality?

Keep wondering, that seems to be completely irrelevant.

swampgas wrote: »

The whole idea of a union like the EU is that it is very much more than a zero sum game. Yet my impression of the UK's approach to the EU is one where zero sum game tactics are prevalent. The fact that the UK is a net contributer is seen as a huge negative, yet the advantages of being in a huge single market are rarely quantified or defended. The idea that someone else is spending their money seems to drive people nuts.

You make a good point that the EU is not (entirely) like a golf club because half the members would be being paid to be members.

However, to butcher the analogy even further, you could consider that the weaker members are getting grants to help them raise their game, raise their income, and buy better equipment from the club shop. Eventually the weaker members get stronger and the golf club as a whole becomes more powerful and influential.

I don't think any one in the UK has a real issue with that. I think most people (other than a few real die hard zealots) are pretty pissed off with the fact that the golf club is getting stronger, slowly, but the board of directors are getting increasingly wealthier and seem to be constantly buying themselves better offices and board rooms, but yet insisting that the hot water in the showers is turned off because the gas bill is too high.

swampgas wrote: »

It's interesting that UKIP types like Farage don't just want Brexit, they want the EU destroyed. A strong EU seems to scare them, even when they are part of it. As if the EU must be destroyed so that UK can be strong.

Farage is irrelevant, but personally i would like to see the eu destroyed, at least in its current form.

The principles behind it, the values it stands for and its long term goals are admirable and this is why i am against the UK leaving it, but the actual eu itself (and don't give me any of the crap that "We" are the EU) is broken, it has just become an added layer of bloated bureaucratic gravy train that seems to do little to move europe forward but is very good at patting itself on the back and telling everyone what a great job it is doing

http://nessachilders.ie/transparency/salaryandexpenses/

https://www.theguardian.com/world/2012/nov/21/eu-budget-battle-brussels

swampgas wrote: »

It really does feel like the UK isn't a team player.

comments like this remind me of the US Multi national I work for.

Anyone who criticises anything, regardless of how rubbish it is, is just seen as negative, so you end up with a company culture of accepting ****ty processes and procedures, because no one wants to appear negative.

The eu needs reform, it needs to be more accountable (what is the travel policy, for example, do they really need to fly business class when none of their flights are for more than two hours?) and personally i would much rather see the UK inside the eu driving reform, but then it just wouldn't be a team player, would it?

https://www.euractiv.com/section/future-eu/news/auditors-put-price-tag-on-eu-parliament-travelling-circus/

steddyeddy · 15-08-2017 11:57AM

Fratton Fred wrote: »

the closest possible trading relationship is to the benefit of the UK and the EU, is it not? This buys time and will help the UK and eu to create an ongoing relationship that means the UK is in the eu in everything but name only, which is what the smart money seems to think will happen

Not necessarily Fred. A close trading relationship is desirable with the UK as it is. The problem is that the UK will no longer be in the biggest single market in the world and as a result will be a lot less desirable to trade with. It will likely lose access to a lot of the perks it had in the EU. Another tactical plan for the E27 would be to capitalise on Brexit by taking business from the UK.

solodeogloria · 15-08-2017 12:01PM

KindOfIrish wrote: »

Ireland is EU. What's good for EU good for Ireland as well. Forget about UK. It's does not exists any longer. I have impression that some Irish even after century of independence still haven't left British Empire.

Good afternoon!

This kind of post does make me smile.

What's even more surprising after a century is that a lot of Irish people haven't realised that the "you're a West Brit" as hominem doesn't really work.

Recognising that Ireland has key trade links with the UK isn't being a West Brit, it's just logic.

Recognising that Ireland should have a good relationship with our closest neighbour isn't being a West Brit it is just logic.

For the record though, I'm not particularly fussed about being called a West Brit it's just funny that this peculiar form of Anglophobia still exists in 2017. It should have died with D.P Moran.

Much thanks,
solodeogloria

steddyeddy · 15-08-2017 12:03PM

So a transitional deal post 2019 is proposed to make sure that the UK feels the same for businesses until new trade deals can be made. How exactly will this be achieved if they want to end free movement on March 2019?

Britain will seek to continue its current customs arrangements with the EU for several years after Brexit, in a victory for supporters of a smooth transition.

A government paper to be published on Tuesday sets out the UK’s wish to remain in a customs union with the EU for at least the estimated three years of transition after Britain’s 2019 exit.

“It should look and feel the same for business,” one Whitehall official said.

The UK government sets out two options for after the transition period: either a “new customs partnership . . . which would negate the need for a customs border between the UK and the EU”, or a new “highly streamlined customs arrangement”.

But the European Commission made clear on Tuesday it was in no hurry to discuss the proposals, which British business has called to be addressed as a matter of urgency to reduce economic uncertainty over Brexit.

“We take note of the UK’s request for an implementing period and its preferences as regards the future relationship, but we will only address them once we have made sufficient progress on the terms of the orderly withdrawal,” the Brussels body said.

Fratton Fred · 15-08-2017 12:04PM

steddyeddy wrote: »

Not necessarily Fred. A close trading relationship is desirable with the UK as it is. The problem is that the UK will no longer be in the biggest single market in the world and as a result will be a lot less desirable to trade with. It will likely lose access to a lot of the perks it had in the EU. Another tactical plan for the E27 would be to capitalise on Brexit by taking business from the UK.

no, that's just what you would like to see. That benefits no one.

Peter Flynt · 15-08-2017 12:04PM

UK outside the EU and no access to customs union/internal market would basically collapse the UK economy.

To this extent it is most unlikely that Brexit will occur, or if it does reach March 2019 without collapsing, the terms of the final deal will go to a referendum and will be comprehensively defeated with the UK staying in the EU. I expect this to happen before the end of 2018 or very early 2019.

UK outside the EU would be a sitting duck for other countries seeking to capitalise on their vulnerability.

If the prodigal son does return then there has to be firmness from the EU: No more rebate at the very least.

steddyeddy · 15-08-2017 12:10PM

Fratton Fred wrote: »

no, that's just what you would like to see. That benefits no one.

That's what Paris would like to see. Make no mistake the UK will get a lot poorer.

Fratton Fred · 15-08-2017 12:17PM

steddyeddy wrote: »

That's what Paris would like to see. Make no mistake the UK will get a lot poorer.

and Ireland?

because the eu is made up of a union of equals, is it not?

Fratton Fred · 15-08-2017 12:18PM

Peter Flynt wrote: »

UK outside the EU and no access to customs union/internal market would basically collapse the UK economy.

how would the eu stop the UK from having access to the eu internal market?

Brexit discussion thread II

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