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UK importing tons of good from EU means that the uk is generating a lot of jobs for EU countries.
by UK-AL 10y ago
UK importing tons of good from EU means that the uk is generating a lot of jobs for EU countries.
- emn13 10y agoHowever, the UK economy is relatively small compared to other EU export markets. Specifically, this means that as a percentage of the total, it's not going to move the needle nearly as much as it will in the UK. It's definitely going to hurt, but it's nothing like the pressure that will be on the UK.
- UK-AL 10y agoI don't understand. If they don't want job losses, they have to trade with us. I'm expecting most EU countries wanting avoid as many job losses as possible. Doesn't really matter who's got the most leverage. The optimum strategy for both is low/no tarrifs
- refulgentis 10y agothe OP's proposition implied that it is the EU's dominant strategy to cut the U.K. a punitive deal that trades off short-term pain for the long-term pain of dissolving by attrition due to other nations leaving.
- intended 10y agoThe optimum strategy would be to create a regional organization with standardized trade rules, tariffs and other co-ordination structures. Since it is clear that the optimal economic outcome is not being selected, the optimal Political outcome will win. EDIT: to elaborate on what I mean. I think that this event has more to do with political points being earned, and poor leadership than it has to do with actual good economic sense. In such an arena, most of what the HN crowd tends to be focused is less applicable. What I expect to happen is that life will continue as normal. Any premium which was built into the Pound due to reduced transaction costs with the EU will be priced in very quickly. What matters is what penalties the EU decides to apply on the UK, in order to set a precedent. I expect the precedent to be onerous - sufficient for the UK to pay with its larger economy, but much harder to cover for any smaller state planning to leave. Unfortunately this is the worst kind of conjecture - guesswork by someone not currently in the market.
- UK-AL 10y agoThat's what the EU was meant to be. But it isn't
- claudius 10y agoThat’s a lie. The EU was never intended to be solely a free trade area, it was conceived as an ‘ever closer union’ and a lot of work has been put into it becoming one since 1952. De Gaulle certainly was right in vetoing the UK application repeatedly, given how much harm they have done to the common European project and long-time peace and prosperity on the continent.
- bayesian_horse 10y agoTarrifs are not the problem. Even without tarrifs there are additional costs involved, mainly because both sides can't trust the other sides' regulations.
- UK-AL 10y agoI would still expect every single EU regulation to be in place tbh. I've heard that all EU laws will remain in place unless explicitly removed
- bayesian_horse 10y agoEU regulation has to be signed into law by national parliaments. These laws won't go away. It's a bit more complicated though.
- sievebrain 10y agoExisting laws were already signed in. It's only new laws/changes that'd have to be implemented. In fact, nothing stops the UK following the EU laws that it wants to afterwards as well.
- notahacker 10y agoTariffs aren't the only factor in the assumed business losses, and they're probably not the biggest. It's the loss of things like financial services companies based in London being able to readily "passport" their services into other EU countries without relying on local branch offices somewhere in the EU that will really hurt. When it comes to passporting rights, it's very much in the interests of the EU to tell the UK to bugger off, and let the London HQs relocate a whole bunch of jobs to Frankfurt or Paris or Tallinn if they want to carry on doing business with EU nationals. This is likely bad if you work in some London-based back office role for a big European bank; really bad if you're a London-based fintech startup aiming to serve most European markets.
- jhou2 10y agoSo the net "winner" for financial services might be Germany? If I were looking for a new financial head office, I would be inclined to locate it in the EU's largest and most stable economy, right?
- joe_fishfish 10y agoEspecially given how cheap real estate in Berlin is compared to London.
- tiatia 10y agoBerlin will gain the least. The city may lose up to 30% (google Euro clearing and ECB. I was always a big issue). It will move to Luxembourg, Frankfurt, Paris and Dublin. Possibly Scotland if Scotland decides to secede - a vague possibility.
- Kliment 10y agoLondon is only the financial powerhouse it is because of its dubious status as the least regulated economy with access to the EU market. If they lose said access, that role naturally goes to Luxembourg, the next-least-regulated economy, and that's where these services will move to.
- AnonymousPlanet 10y agoWho is talking about ceasing all trade with the UK? The biggest changes will not come for net trade volume but more through a shift in supply chains. Politicians on either side will now have to make very bold promises so that businesses don't feel things are too much in limbo and pull the plug on their investments into the UK (factories, headquarters, ...).
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- mrb 10y agoLet's do some math. UK exports to the EU amount to approximately 300 billion USD. Assuming 1 worker produces 200 000 USD worth of goods, then the UK-EU trade is linked to 1.5 million jobs in the EU, or 0.3% of the EU population. For comparison the UK-EU trade is linked to over 3.3 million jobs in the UK,¹ or 5.1% of the UK population. 0.3% vs 5.1% → the UK needs EU more than the EU needs the UK. ¹ https://fullfact.org/europe/uk-jobs-and-eu/ https://fullfact.org/europe/uk-jobs-and-eu/
- UK-AL 10y agoDoesn't matter who needs more who. The best deal for both is low tarrifs. There's no conflicting interest here. Tarrifs = more jobs losses for both No tarrifs = fewer job losses
- siscia 10y agoI do agree with you but is not that obvious... Apparently it looks like the English dont grasp this idea...
- valkea 10y ago> Apparently it looks like the English dont grasp this idea... Would you care to elaborate?
- ZenoArrow 10y agoYou should look into the reasons why people wanted to leave. I for one accept there will be a period of economic uncertainty, but consider it worth it in order to remove ourselves from an undemocratic institution that has power to set the laws of its members. I'd be for a democratic union, but I'll not be losing sleep over leaving an undemocratic one, even if it's a messy divorce.
- AstralStorm 10y agoCompletely undemocratic, with representatives chosen in democratic ways, membership proportional to population (with UK getting the break there), laws voted in a democratic way.
- kaftoy 10y agoYeah, so what? UK will keep importing after brexit even if trade agreements change... UK will import at higher prices maybe. Else, where will they get the merchendise from? On the other hand, EU could import less from UK, since (probable) taxes will increase the price => EU will consume more from it's own production and have less imports from UK. So to me, if it's about jobs, UK jobs are at risk, not EU.
- UK-AL 10y agoFrom Japan, china,America, domestic, any common wealth country? Europe will not disadvantage themselves with tarrifs and risk job losses
- kaftoy 10y agoTransportation and smaller market will keep import prices from these oversease sources pretty high. EU only has to sell a little under (but more than what it's selling now, with the internal trade agreements) to keep it's upper hand. Of course, EU would be ratarded to have some silly new agreements to throw the trade prices over the roof. But this is a situation which can be exploited in EU advantage and in no way in UK advantage.
- UK-AL 10y agoJapan already sell their cars pretty cheap over here. Adding tarrifs essentially means Honda will get more customers at the expense of BMW. Germany won't want that
- AnonymousPlanet 10y agoJapan has trade deals with the EU making this possible. The UK will have to renegotiate all those deals themselves (or just copy and paste the old ones? what was the point of independence then?). What happens in the mean time? Is the UK going to remain part of the EU until all those deals with China, Japan, the US - to name a few - are made? It's a huge endeavor and a lot of question marks. I do not envy your position.
- bayesian_horse 10y agoThe idea is that the EU is a lot less sensitive to losses in the trade volume.
- UK-AL 10y agoBut why risk losses at all if you can avoid it?
- happyraul 10y agoBecause there is the other risk of losing more member states when they see that there aren't serious consequences to leaving.
- Joeri 10y agoThe act of leaving will already produce big consequences when the EU subsidies go away. Even with free trade the UK will be worse off.
- UK-AL 10y agoOverall we did give more. Then receive in subsidises.
- gambiting 10y agoSource? Also poorer areas of the country(like Wales, which inexplicably voted to leave) received majority of their help from EU,not British government - and now can they expect the British government will match those contributions? How and with which money?
- mattmanser 10y agoIt's widely known we're a net contributor to the EU, it's not disputed at all. Money doesn't magically appear in the EU coffers, as the UK is one of the strongest economies in the EU, of course it's a net contributor. The exact figure is disputed, leave were saying £450 million per week, remain were saying it's £150million per week. https://fullfact.org/europe/our-eu-membership-fee-55-million/ https://fullfact.org/europe/our-eu-membership-fee-55-million...
- danmaz74 10y ago44% of UK exports go to other EU countries. How many jobs are other EU countries generating in the UK?
- UK-AL 10y agoThat's not the point. The point is there isn't any conflict. Low tarrifs = good for both. it would be politically difficult to go against that.
- ori_b 10y agoNot breaking up the EU = good for the EU. Making it unpleasant to leave the EU achieves that goal.
- bayesian_horse 10y agoThat's not true. It's only true if both sides can compete on equal terms. The EU guarantees that. Without Britain in the EU, there will be situations where tariffs are beneficial for one side.
- UK-AL 10y agoNo. Generally no tarrifs benefit both. Comparative advantage and all that.
- bayesian_horse 10y ago"Generally" strongly assumes equal or even perfect competition. For example say Country A and B trade coal and agree to no tariffs. Country A now cuts back on worker protection and wages, such that their coal is cheaper. Country B's only other chance than doing the same would be to raise a tariff to keep its own coal competitive. That's why Country B wants a say in Country A's labor laws.
- barrkel 10y agoAnd this is exactly the reason for a supra-national body that comes in with annoying regulations and red tape that stops you from competing with Johnny Foreigner in the full-blooded way you want to. Let the race to the bottom commence!
- mcv 10y agoIt goes both ways. New trade barriers will be bad for the UK and for the EU. Worse for the UK of course, because it's smaller. It's a larger percentage of UK trade than it is for the EU.