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America does pass laws like that, frequently. Things related to defence, for example. The EU can absolutely impose trade sanctions on the UK in order to force

America does pass laws like that, frequently. Things related to defence, for example. The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that.

edblarney 10y ago
I think your conflating a little in both examples. Everyone understands that 'defence' contracts are geopolitical, and there have always been expectations around those controls - from parts to purchases - so it's already in the system. "The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that." All of those points are not appropriate. There will not ever be any 'trade sanctions' for UK doing clearing of EU dollars. Nobody is even suggesting that. To do so would rattle all markets internationally, and kill confidence in the Euro. The Euro would lose 20% of it's value overnight, and would never recover. The UK could not do the same in reverse (how does it ban the EU from doing Euro cleared transactions?) And Brexit is not a 'trade war'. It's just Brexit. The 'worst case scenario' is the UK is a country that trades with EU like any other: USA, Japan, Canada. There is no 'trade war' between USA and EU. The issues regarding EU wanting to have it's clearing within it's own jurisdiction are reasonable, but the system can't be changed overnight. The EU is about to go through another crisis because Italian banks are about to default, and all of that lending goes through London. So guess who the EU needs? Brexit will probably work out with some kind of trade deal, specifically involving financial services.
- zigzigzag 10y ago
  Not appropriate? You may not agree, but how are my opinions "not appropriate"? I was obviously talking in generalities: if the EU banned or tariffed its citizens from buying service X from the UK, that doesn't mean it has to be service X that is banned or tariffed in reverse. That's never how sanctions are applied. The 'worst case scenario' is the UK is a country that trades with EU like any other I can think of many worst case scenarios worse than that. I think what you mean is, you don't personally anticipate it getting worse than that.
  - krona 10y ago
    > if the EU banned or tariffed its citizens from buying service X from the UK It can't, because the UK will be a member of the WTO, like the EU. Members of the WTO can't discriminate unfavorably against individual nations in the way you're suggesting.
    - gpderetta 10y ago
      unless is a blanket banning of buying these services from anywhere.
    - lhopki01 10y ago
      The UK won't be a member of the WTO since it never joined. It'll have to apply after it leaves the EU.
      - krona 10y ago
        "The UK is a member of the WTO today, it will be a member tomorrow. There will be no discontinuity in its membership…" -- Head of the WTO. The UK is a founding member of the WTO. It never left. It still pays it's membership fee. It will retake its seat the day after it leaves the EU. Where do you get your information? The Guardian?
        lhopki01 10y ago
        I stand corrected. They inherited membership via GATT. My information was based on the founding of the WTO in 1995 after the UK had joined the EU.
      - zigzigzag 10y ago
        The UK appears on the WTO's member list: https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.h...
        lhopki01 10y ago
- edblarney 10y ago
  Yeah, sorry 'not appropriate' was the wrong terminology :). My bad.

edblarney 10y ago

I think your conflating a little in both examples. Everyone understands that 'defence' contracts are geopolitical, and there have always been expectations around those controls - from parts to purchases - so it's already in the system. "The EU can absolutely impose trade sanctions on the UK in order to force business out of it. The UK can do the same in reverse. Brexit is a trade war, have no doubt about it. People just don't call it that." All of those points are not appropriate. There will not ever be any 'trade sanctions' for UK doing clearing of EU dollars. Nobody is even suggesting that. To do so would rattle all markets internationally, and kill confidence in the Euro. The Euro would lose 20% of it's value overnight, and would never recover. The UK could not do the same in reverse (how does it ban the EU from doing Euro cleared transactions?) And Brexit is not a 'trade war'. It's just Brexit. The 'worst case scenario' is the UK is a country that trades with EU like any other: USA, Japan, Canada. There is no 'trade war' between USA and EU. The issues regarding EU wanting to have it's clearing within it's own jurisdiction are reasonable, but the system can't be changed overnight. The EU is about to go through another crisis because Italian banks are about to default, and all of that lending goes through London. So guess who the EU needs? Brexit will probably work out with some kind of trade deal, specifically involving financial services.

zigzigzag 10y ago
Not appropriate? You may not agree, but how are my opinions "not appropriate"? I was obviously talking in generalities: if the EU banned or tariffed its citizens from buying service X from the UK, that doesn't mean it has to be service X that is banned or tariffed in reverse. That's never how sanctions are applied. The 'worst case scenario' is the UK is a country that trades with EU like any other I can think of many worst case scenarios worse than that. I think what you mean is, you don't personally anticipate it getting worse than that.
- krona 10y ago
  > if the EU banned or tariffed its citizens from buying service X from the UK It can't, because the UK will be a member of the WTO, like the EU. Members of the WTO can't discriminate unfavorably against individual nations in the way you're suggesting.
  - gpderetta 10y ago
    unless is a blanket banning of buying these services from anywhere.
  - lhopki01 10y ago
    The UK won't be a member of the WTO since it never joined. It'll have to apply after it leaves the EU.
    - krona 10y ago
      "The UK is a member of the WTO today, it will be a member tomorrow. There will be no discontinuity in its membership…" -- Head of the WTO. The UK is a founding member of the WTO. It never left. It still pays it's membership fee. It will retake its seat the day after it leaves the EU. Where do you get your information? The Guardian?
      - lhopki01 10y ago
        I stand corrected. They inherited membership via GATT. My information was based on the founding of the WTO in 1995 after the UK had joined the EU.
    - zigzigzag 10y ago
      The UK appears on the WTO's member list: https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.h...
      - lhopki01 10y ago
edblarney 10y ago
Yeah, sorry 'not appropriate' was the wrong terminology :). My bad.