5 ms·

Worth noting the EU doesn’t have free trade agreements with any of the three largest economies (US, China, Japan) and in theory, Britain would be free to enter

by 88 9y ago

Worth noting the EU doesn’t have free trade agreements with any of the three largest economies (US, China, Japan) and in theory, Britain would be free to enter into such agreements after leaving the EU.

celticninja 9y ago
Negotiating a fair free trade deal is harder for a smaller market who every one knows are in need of a trade deal.
- nanomoose 9y ago
  On the contrary, the opportunity to access the UK market has much enthusiasm.
  - EliRivers 9y ago
    It certainly does. A country reeling in economic shock, suddenly cut off from the free trade it enjoyed with 300 million other people? They will take trade deals that previously they wouldn't have given the time of day to.
    - jamiegreen 9y ago
      Thats a bit hyperbolic. It's not like trade with the EU will suddenly stop. Worst case will be WTO tariffs , most of which will already be offset by the fall in the pound.
      - heavenlyblue 9y ago
        Yeah, but definitely not if you're importing into UK.
  - celticninja 9y ago
    They(US, Japan, China) would like a deal with the UK because it would be easier for them to obtain more preferential terms than if they were negotiating with the EU. The EU is a much bigger market than the UK alone, Australia which made some noises about a free trade deal with the UK don't want to actually make a deal, or even discuss it, until they have their EU deal sewn up. The reality is we lost a lot of negotiating power through brexit and put ourselves in a position where we need trade deals and all our trading partners know that we need those deals. It's a poor position from which to negotiate.
  - IkmoIkmo 9y ago
    > On the contrary, the opportunity to access the UK market has much enthusiasm. You're implying that's some kind of great news. I'd say, real estate investors have lots of enthusiasm for sellers threatened with foreclosure. You can frame it as positively as you want but at the end of the day the UK's position at the negotiation table is simply weaker, and it's no surprise everyone suddenly wants to talk.
    - jopsen 9y ago
      > I'd say, real estate investors have lots of enthusiasm for sellers threatened with foreclosure. Nice, hehe :) While that's definitely nice... there is the possibility that making a disadvantages agreement with the US, China, Canada, etc. is better in the long term. It took years for the EU and Canada to reach an agreement. If one of them was in a less advantages position maybe it could be done faster... And maybe speed is more important than conditions of the agreement, who really knows? EDIT: okay, the brits perhaps ought to know what disadvantages trade agreements can do... given their past experience making them with their colonies :) I note that the brexit'ers probably didn't want disadvantages trade agreements :)
  - mcv 9y ago
    In particular, the prospect of access to the UK market on China/US/Japan's terms is cause for much enthusiasm.
- Zenst 9y ago
  With the EU, all members have to agree and that means the interests of 28 countries are going to be at play vs one country (unless agreement with another trading block). This means that many EU trade deals won't be as favourable for any single country, more so with some than others due to the amount of compromises. This does not even factor in tariffs that are in play to protect industries that some members have no interest in and as such negatively impact them. It's like trying to agreeing a meal that everybody will eat between two people over agreeing a meal of nearly 30 people, and comparing steak with gluten free bread in some cases. Remember trade deal can encompass everything or area's of trade/industry. That is when having just two parties becomes a positive. Still, volume always helps, but more than enough upsides to offset that. But this takes time, luckily much easier without everybody elses interests coming into play, as you have with trade blocks that have many members to all appease. Just look at how one vote against in the UN can kill of any moving forward and see how that can work out and you will start to see that volume at that price, is not as idyllic as it seems for trade deals.
buckminster 9y ago
The EU is the largest economy. And the UK already had a deal with it.
- PeachPlum 9y ago
  And we are a net importer, they won't throw that away We import more from Germany than France does.
  - lhopki01 9y ago
    And we will continue to even if we don't have a deal because we don't produce those things at home.
  - robotresearcher 9y ago
    That's because France still has a domestic car industry.
fattyboy420 9y ago
You got that backwards; the EU economy is larger than both the US and China.
- adventured 9y ago
  The US economy is at least $2 trillion larger than the European Union's combined economy. $19 to $19.5 trillion for the US, versus $16.5 to $17.5 for the EU (depending on your source, however they all universally agree the US is several trillion dollars larger). And that of course is despite the EU having ~55% more people. https://tradingeconomics.com/european-union/gdp https://tradingeconomics.com/european-union/gdp https://en.wikipedia.org/wiki/Economy_of_the_European_Union https://en.wikipedia.org/wiki/Economy_of_the_European_Union
  - 5ersi 9y ago
    Wrong: http://www.businessinsider.com/charts-eu-economy-is-bigger-than-the-us-2015-6 http://www.businessinsider.com/charts-eu-economy-is-bigger-t...
    - mcv 9y ago
      By that chart, China would also have overtaken the US. Considering Brexit being the likely cause of the UK sagging, I wonder if Trump might be having a similar effect on the US.
barrkel 9y ago
US (especially these days, but pretty much always) and China (for sure) won't enter into any agreements that aren't heavily tilted in their interests, and the UK won't have many bargaining chips to trade. Facebook, Google and Uber couldn't make it in China, what chance do UK service providers have?
- fsloth 9y ago
  What service providers? Tongue in cheek: After the industrial revolution kicked in britain's main innovative energies were spent on financial innovation and exploitation of a closed, huge global internal market, and being a colonial master at the expense of actually making better products or services. Except for the rich nabobs coming home from India, I suppose. But there are only so many Savile Row suits and London luxury apartments one can sell to the global population. UK was at the heart of industrial and scientific revolutions, and was a huge financial innovator. I presume the wealth from colonies in the 19th century killed the two former.
lhopki01 9y ago
It could it theory but even if it does it doesn't matter. Britain is primarily a services economy and most free trade agreements don't cover services to anywhere near the extent that the EU does. A free trade agreement in goods doesn't really do the UK economy much good since the UK doesn't produce that many.
mcv 9y ago
The UK is unlikely to get a good free trade deal with the US, China or Japan on favourable terms, though. Being part of the EU offers much better prospects of a good deal, simply because the EU is a much bigger player (the biggest, in fact). It may not be fair, but on the world stage, power matters. Inside the EU, we try (but don't always succeed) to be fair, but outside of it, power matters. A relatively small country like the UK doesn't have much leverage to get a good deal from other major powers, whereas the EU does.

by 88 9y ago

celticninja 9y ago

Negotiating a fair free trade deal is harder for a smaller market who every one knows are in need of a trade deal.

nanomoose 9y ago
On the contrary, the opportunity to access the UK market has much enthusiasm.
- EliRivers 9y ago
  It certainly does. A country reeling in economic shock, suddenly cut off from the free trade it enjoyed with 300 million other people? They will take trade deals that previously they wouldn't have given the time of day to.
  - jamiegreen 9y ago
    Thats a bit hyperbolic. It's not like trade with the EU will suddenly stop. Worst case will be WTO tariffs , most of which will already be offset by the fall in the pound.
    - heavenlyblue 9y ago
      Yeah, but definitely not if you're importing into UK.
- celticninja 9y ago
  They(US, Japan, China) would like a deal with the UK because it would be easier for them to obtain more preferential terms than if they were negotiating with the EU. The EU is a much bigger market than the UK alone, Australia which made some noises about a free trade deal with the UK don't want to actually make a deal, or even discuss it, until they have their EU deal sewn up. The reality is we lost a lot of negotiating power through brexit and put ourselves in a position where we need trade deals and all our trading partners know that we need those deals. It's a poor position from which to negotiate.
- IkmoIkmo 9y ago
  > On the contrary, the opportunity to access the UK market has much enthusiasm. You're implying that's some kind of great news. I'd say, real estate investors have lots of enthusiasm for sellers threatened with foreclosure. You can frame it as positively as you want but at the end of the day the UK's position at the negotiation table is simply weaker, and it's no surprise everyone suddenly wants to talk.
  - jopsen 9y ago
    > I'd say, real estate investors have lots of enthusiasm for sellers threatened with foreclosure. Nice, hehe :) While that's definitely nice... there is the possibility that making a disadvantages agreement with the US, China, Canada, etc. is better in the long term. It took years for the EU and Canada to reach an agreement. If one of them was in a less advantages position maybe it could be done faster... And maybe speed is more important than conditions of the agreement, who really knows? EDIT: okay, the brits perhaps ought to know what disadvantages trade agreements can do... given their past experience making them with their colonies :) I note that the brexit'ers probably didn't want disadvantages trade agreements :)
- mcv 9y ago
  In particular, the prospect of access to the UK market on China/US/Japan's terms is cause for much enthusiasm.
Zenst 9y ago
With the EU, all members have to agree and that means the interests of 28 countries are going to be at play vs one country (unless agreement with another trading block). This means that many EU trade deals won't be as favourable for any single country, more so with some than others due to the amount of compromises. This does not even factor in tariffs that are in play to protect industries that some members have no interest in and as such negatively impact them. It's like trying to agreeing a meal that everybody will eat between two people over agreeing a meal of nearly 30 people, and comparing steak with gluten free bread in some cases. Remember trade deal can encompass everything or area's of trade/industry. That is when having just two parties becomes a positive. Still, volume always helps, but more than enough upsides to offset that. But this takes time, luckily much easier without everybody elses interests coming into play, as you have with trade blocks that have many members to all appease. Just look at how one vote against in the UN can kill of any moving forward and see how that can work out and you will start to see that volume at that price, is not as idyllic as it seems for trade deals.

buckminster 9y ago

The EU is the largest economy. And the UK already had a deal with it.

PeachPlum 9y ago
And we are a net importer, they won't throw that away We import more from Germany than France does.
- lhopki01 9y ago
  And we will continue to even if we don't have a deal because we don't produce those things at home.
- robotresearcher 9y ago
  That's because France still has a domestic car industry.

fattyboy420 9y ago

You got that backwards; the EU economy is larger than both the US and China.

adventured 9y ago
The US economy is at least $2 trillion larger than the European Union's combined economy. $19 to $19.5 trillion for the US, versus $16.5 to $17.5 for the EU (depending on your source, however they all universally agree the US is several trillion dollars larger). And that of course is despite the EU having ~55% more people. https://tradingeconomics.com/european-union/gdp https://tradingeconomics.com/european-union/gdp https://en.wikipedia.org/wiki/Economy_of_the_European_Union https://en.wikipedia.org/wiki/Economy_of_the_European_Union
- 5ersi 9y ago
  Wrong: http://www.businessinsider.com/charts-eu-economy-is-bigger-than-the-us-2015-6 http://www.businessinsider.com/charts-eu-economy-is-bigger-t...
  - mcv 9y ago
    By that chart, China would also have overtaken the US. Considering Brexit being the likely cause of the UK sagging, I wonder if Trump might be having a similar effect on the US.

barrkel 9y ago

US (especially these days, but pretty much always) and China (for sure) won't enter into any agreements that aren't heavily tilted in their interests, and the UK won't have many bargaining chips to trade. Facebook, Google and Uber couldn't make it in China, what chance do UK service providers have?

fsloth 9y ago
What service providers? Tongue in cheek: After the industrial revolution kicked in britain's main innovative energies were spent on financial innovation and exploitation of a closed, huge global internal market, and being a colonial master at the expense of actually making better products or services. Except for the rich nabobs coming home from India, I suppose. But there are only so many Savile Row suits and London luxury apartments one can sell to the global population. UK was at the heart of industrial and scientific revolutions, and was a huge financial innovator. I presume the wealth from colonies in the 19th century killed the two former.

lhopki01 9y ago

It could it theory but even if it does it doesn't matter. Britain is primarily a services economy and most free trade agreements don't cover services to anywhere near the extent that the EU does. A free trade agreement in goods doesn't really do the UK economy much good since the UK doesn't produce that many.

mcv 9y ago

The UK is unlikely to get a good free trade deal with the US, China or Japan on favourable terms, though. Being part of the EU offers much better prospects of a good deal, simply because the EU is a much bigger player (the biggest, in fact). It may not be fair, but on the world stage, power matters. Inside the EU, we try (but don't always succeed) to be fair, but outside of it, power matters. A relatively small country like the UK doesn't have much leverage to get a good deal from other major powers, whereas the EU does.