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The gains that Germany and France will make in EU oriented financials services will pale in comparison to the loss of a major trading partner. Remember that th

The gains that Germany and France will make in EU oriented financials services will pale in comparison to the loss of a major trading partner. Remember that the EU is becoming less and less important over time as a financial services market, even the UK's financial services sector has become less dependant on it over time. The juicier fruit is in the rest of the world. There's quite a lot of real trade between the EU-UK and that will hurt. The EU obviously stands to benefit from a pretty strong deal with it's closest 'non EU' partner. The reason we don't see it playing out so obviously I believe boils down to the other geopolitical factors at play - obviously there's a lot at play. In other words, if the UK were just now approaching the EU for some kind of participation, without the baggage of the current 'leave' environment, I think we'd see a Canada++ type deal develop.

wbl 8y ago
There already was a customs union. It was called the EU.
- sonnyblarney 8y ago
  The EU is far more than a 'customs union'. It's a political union, with an unelected Executive body, and a very powerful Supreme Court (Court of Justice), and so much more - that almost no European citizen ever voted for. Everyone is for trade, most are for open borders, very few for deep political integration. To the extent the elites push against the underlying sentiment - there will be problems. Such problems are clearly on the rise all over the EU in various incarnations, it'd be nice if the EU took this time of crisis to re-evaluate it's existence and reconsider a bunch of things.
  - jpster 8y ago
    The EU is quite popular among most of its other citizens. (Half) the UK citizenry was an outlier in that regard.
    - sonnyblarney 8y ago
      No, this is simply not true. In France, the EU is viewed with even wider skepticism than in the UK. Just before Brexit - the majority of France, Germany, UK and Spain had negative views of the EU [1] Popular sentiment towards the EU has been declining steadily until Brexit, during which it's shot up somewhat, as EU-wide press does their best to inject fear into the situation - but without this existential angst, the trend-line is clearly going down. This is also obvious from recent Eurosceptic political trends. Consider that just this week, the far right AfD in Germany, has just announced they would like to move Germany out of the EU as a material policy. They have about 15% of the vote. They've always been sceptic, but there has never been discussion in Germany about exit before. But it is of course nuanced: + Wether or not citizens want to 'leave' is a different question. + Wether or not people would opt to 'join' were they not members otherwise, is also a different question. + Wether or not they can separate the notion of 'EU' and 'Europe' is another question. For example, Italy, Europe's 3rd largest economy has just elected a Eurosceptic party, but they have no real inclination to leave. For Italians, to 'leave the EU' is to 'leave Europe' and because they see themselves as European, they may not chose to leave the EU. (I see that as a false equivalence, that the EU is not Europe, just a body politic and set of treaties.) + Nations that have the most direct battles with the EU, for example Poland, have the highest rating! Make no mistake - though material 'exit' may be stronger in the UK than elsewhere, anti-EU sentiment is strong across Europe, and the overall trend-line is bad news. Aside from political issues, there are serious economic concerns about the Euro, and that it's a 'trap' for peripheral nations unless there is deeper political integration (there won't be), and even if there was, they would never agree on how to print money anyhow. And finally - even issues for which the EU can't fairly be blamed ... they will take the heat for in many cases. The kind of populism you see in France right now with the Gilets Jaunes which is leaderless, has no ideology, there's nobody to negotiate with, nobody to appease, nobody really knows for sure why it's happening, it's just 'angst' ... this is going to spill over into Bruxelles. You'll see arbitrary movements like this. That most of Europe's current elite are fairly pro-EU, and that the current political bodies are fairly 'on the same page' should not be interpreted as populist favour overall for the EU. To anyone who thinks that Euroscepticism is a marginal issue, have a look at the Wikipedia entry, it's enlightening, and also gives some insight into all of the different nuances of it. [1] http://www.pewglobal.org/2017/06/15/post-brexit-europeans-more-favorable-toward-eu/ http://www.pewglobal.org/2017/06/15/post-brexit-europeans-mo... [2] https://en.wikipedia.org/wiki/Euroscepticism https://en.wikipedia.org/wiki/Euroscepticism
  - wbl 8y ago
    How do you have a single market without common rules and hence political integration?
    - sonnyblarney 8y ago
      "How do you have a single market without common rules and hence political integration?" Rules and regulations regarding trade can be negotiated just like any other treaty - but they can be held as that, i.e. treaties - there is utterly no need to devolve national power in order to have frictionless trade and even relatively free movement of labour. North America has something approaching a customs union, and it's very nearly a common market - but there isn't any remote hint of political integration. Norway and Switzerland are effectively part of the single market without having political integration, though they have less influence, there's no reason a system couldn't be had wherein they did actually participate. The real sticking point might come down to commercial courts and arbitration, and for that there can be binding mechanisms put in place, without any need for a Court of Justice which effectively has supremacy in all judicial matters in Europe. Economic impetus is really easy to argue for and it would be fundamentally easier to arrange for something like this than it would be for political integration. The EEC is really based on this anyhow. It's the common market and trade that is really the bedrock of the EU, the political stuff is secondary to the point that were there no economic integration, there wouldn't even be any discussion of political integration.
  - gambiting 8y ago
    >>with an unelected Executive body Simply not true - the executive body is chosen by people that you can directly vote for, so the same as oh I don't know....the prime minister of the UK for instance? >> and a very powerful Supreme Court (Court of Justice), Nothing to do with EU. ECJ is a separate institution that UK will be still part of even after Brexit. >>and so much more - that almost no European citizen ever voted for. Remind me, when was the vote to elect Theresa May to power? Or the members of the House of Lords? Or the Queen for that matter? >>Everyone is for trade, most are for open borders, very few for deep political integration. I'd definitely contest the "very few" part of that sentence. I'd definitely be up for creating a United States of Europe with one federal government and full financial and political union.
jashmatthews 8y ago
> The juicier fruit is in the rest of the world. The rest of the world has moved on. Australia and other former colonies have no interest in an FTA where the UK gets the better end of the deal. New Zealand already has a comprehensive FTA with China. What do they need the UK for?
- mrec 8y ago
  > FTA where the UK gets the better end of the deal FTAs aren't zero-sum. Free trade benefits both parties; neither needs to get a "better end".
  - jashmatthews 8y ago
    Between two countries of equal power, sure, but smaller countries are essentially looking for cheaper export access to larger markets and big countries like the USA do naturally take advantage of that.
jayalpha 8y ago
"Remember that the EU is becoming less and less important over time as a financial services market, even the UK's financial services sector has become less dependant on it over time." Ah, no? "The juicier fruit is in the rest of the world." The world is limited. a) USA. Very little taxes in trade with the EU already. Little to gain with FTA. b) Canada? Okay, but the UK has this Free trade agreement (FTA) already via the EU. c) Mersocur? FTA to be signed with the EU soon. Maybe Chile or Colombia could be a play. d) Japan und Korea? Have FTAs with EU e) India? Very demanding. Also want easier immigration to the UK in a FTA. Prediction: Will fail. f) Australia? Ok, easy to get. Point for the UK g) China? Possible. But only goods, since China loves to export goods. Financial services? Forget about it. Also, trust me, the Chinese have not forgotten the Opium war. Also the recent Ship of the Royal Navy in disputed waters did not help. h) Africa. Many (economically) small countries. Not all countries have ties to the UK. i) Russia/CIS. This the UK could get but this they don't want. They earth is limited. They are leaving the biggest market in the world in hopes of greener pastures. Good luck!
- sonnyblarney 8y ago
  Your comments assume 'FTA' is the key ingredient in the equation - it is not. The UK is growing financial services exports in almost all of the markets you mentioned, so I don't really see what your point is there. [1] Third - the UK is not 'leaving' European markets, they are changing the terms of trade. Goods and services will continue to flow. (Thankfully, 'services' don't face the fundamental challenges that 'goods' do at the border outside of a customs union) The UK already exports as much financial services to the US as it does to the entire EU [2] and the underlying impetus is fundamentally in the rest of the world. Similar to your comment about Japan - the UK already exports quite a lot in financial services (3 billion pounds/year and growing). " Also, trust me, the Chinese have not forgotten the Opium war" No, I don't trust you. [1] https://colresearch.typepad.com/colresearch/2017/03/trends-and-growth-in-uk-financial-services-trade-.html https://colresearch.typepad.com/colresearch/2017/03/trends-a... [2] https://colresearch.typepad.com/colresearch/2016/08/how-important-is-uk-financial-services-trade-to-the-eu.html https://colresearch.typepad.com/colresearch/2016/08/how-impo...
  - 8y ago
rswail 8y ago
The UK already has a "Canada++" deal. They have carve outs on all sorts of EU regulations, they're not part of the Euro-zone, they have the natural barrier of the Channel (aside from inflatable rafts) against illegal immigration... Plus the UK currently has a say in all other EU regulation. Brexit was a stupid idea by rah-rah Tories that think the UK is still an Empire. Cameron was a mindless twat that thought he could kill off half his party with a dumb referendum.

wbl 8y ago

There already was a customs union. It was called the EU.

sonnyblarney 8y ago
The EU is far more than a 'customs union'. It's a political union, with an unelected Executive body, and a very powerful Supreme Court (Court of Justice), and so much more - that almost no European citizen ever voted for. Everyone is for trade, most are for open borders, very few for deep political integration. To the extent the elites push against the underlying sentiment - there will be problems. Such problems are clearly on the rise all over the EU in various incarnations, it'd be nice if the EU took this time of crisis to re-evaluate it's existence and reconsider a bunch of things.
- jpster 8y ago
  The EU is quite popular among most of its other citizens. (Half) the UK citizenry was an outlier in that regard.
  - sonnyblarney 8y ago
    No, this is simply not true. In France, the EU is viewed with even wider skepticism than in the UK. Just before Brexit - the majority of France, Germany, UK and Spain had negative views of the EU [1] Popular sentiment towards the EU has been declining steadily until Brexit, during which it's shot up somewhat, as EU-wide press does their best to inject fear into the situation - but without this existential angst, the trend-line is clearly going down. This is also obvious from recent Eurosceptic political trends. Consider that just this week, the far right AfD in Germany, has just announced they would like to move Germany out of the EU as a material policy. They have about 15% of the vote. They've always been sceptic, but there has never been discussion in Germany about exit before. But it is of course nuanced: + Wether or not citizens want to 'leave' is a different question. + Wether or not people would opt to 'join' were they not members otherwise, is also a different question. + Wether or not they can separate the notion of 'EU' and 'Europe' is another question. For example, Italy, Europe's 3rd largest economy has just elected a Eurosceptic party, but they have no real inclination to leave. For Italians, to 'leave the EU' is to 'leave Europe' and because they see themselves as European, they may not chose to leave the EU. (I see that as a false equivalence, that the EU is not Europe, just a body politic and set of treaties.) + Nations that have the most direct battles with the EU, for example Poland, have the highest rating! Make no mistake - though material 'exit' may be stronger in the UK than elsewhere, anti-EU sentiment is strong across Europe, and the overall trend-line is bad news. Aside from political issues, there are serious economic concerns about the Euro, and that it's a 'trap' for peripheral nations unless there is deeper political integration (there won't be), and even if there was, they would never agree on how to print money anyhow. And finally - even issues for which the EU can't fairly be blamed ... they will take the heat for in many cases. The kind of populism you see in France right now with the Gilets Jaunes which is leaderless, has no ideology, there's nobody to negotiate with, nobody to appease, nobody really knows for sure why it's happening, it's just 'angst' ... this is going to spill over into Bruxelles. You'll see arbitrary movements like this. That most of Europe's current elite are fairly pro-EU, and that the current political bodies are fairly 'on the same page' should not be interpreted as populist favour overall for the EU. To anyone who thinks that Euroscepticism is a marginal issue, have a look at the Wikipedia entry, it's enlightening, and also gives some insight into all of the different nuances of it. [1] http://www.pewglobal.org/2017/06/15/post-brexit-europeans-more-favorable-toward-eu/ http://www.pewglobal.org/2017/06/15/post-brexit-europeans-mo... [2] https://en.wikipedia.org/wiki/Euroscepticism https://en.wikipedia.org/wiki/Euroscepticism
- wbl 8y ago
  How do you have a single market without common rules and hence political integration?
  - sonnyblarney 8y ago
    "How do you have a single market without common rules and hence political integration?" Rules and regulations regarding trade can be negotiated just like any other treaty - but they can be held as that, i.e. treaties - there is utterly no need to devolve national power in order to have frictionless trade and even relatively free movement of labour. North America has something approaching a customs union, and it's very nearly a common market - but there isn't any remote hint of political integration. Norway and Switzerland are effectively part of the single market without having political integration, though they have less influence, there's no reason a system couldn't be had wherein they did actually participate. The real sticking point might come down to commercial courts and arbitration, and for that there can be binding mechanisms put in place, without any need for a Court of Justice which effectively has supremacy in all judicial matters in Europe. Economic impetus is really easy to argue for and it would be fundamentally easier to arrange for something like this than it would be for political integration. The EEC is really based on this anyhow. It's the common market and trade that is really the bedrock of the EU, the political stuff is secondary to the point that were there no economic integration, there wouldn't even be any discussion of political integration.
- gambiting 8y ago
  >>with an unelected Executive body Simply not true - the executive body is chosen by people that you can directly vote for, so the same as oh I don't know....the prime minister of the UK for instance? >> and a very powerful Supreme Court (Court of Justice), Nothing to do with EU. ECJ is a separate institution that UK will be still part of even after Brexit. >>and so much more - that almost no European citizen ever voted for. Remind me, when was the vote to elect Theresa May to power? Or the members of the House of Lords? Or the Queen for that matter? >>Everyone is for trade, most are for open borders, very few for deep political integration. I'd definitely contest the "very few" part of that sentence. I'd definitely be up for creating a United States of Europe with one federal government and full financial and political union.

jashmatthews 8y ago

> The juicier fruit is in the rest of the world. The rest of the world has moved on. Australia and other former colonies have no interest in an FTA where the UK gets the better end of the deal. New Zealand already has a comprehensive FTA with China. What do they need the UK for?

mrec 8y ago
> FTA where the UK gets the better end of the deal FTAs aren't zero-sum. Free trade benefits both parties; neither needs to get a "better end".
- jashmatthews 8y ago
  Between two countries of equal power, sure, but smaller countries are essentially looking for cheaper export access to larger markets and big countries like the USA do naturally take advantage of that.

jayalpha 8y ago

"Remember that the EU is becoming less and less important over time as a financial services market, even the UK's financial services sector has become less dependant on it over time." Ah, no? "The juicier fruit is in the rest of the world." The world is limited. a) USA. Very little taxes in trade with the EU already. Little to gain with FTA. b) Canada? Okay, but the UK has this Free trade agreement (FTA) already via the EU. c) Mersocur? FTA to be signed with the EU soon. Maybe Chile or Colombia could be a play. d) Japan und Korea? Have FTAs with EU e) India? Very demanding. Also want easier immigration to the UK in a FTA. Prediction: Will fail. f) Australia? Ok, easy to get. Point for the UK g) China? Possible. But only goods, since China loves to export goods. Financial services? Forget about it. Also, trust me, the Chinese have not forgotten the Opium war. Also the recent Ship of the Royal Navy in disputed waters did not help. h) Africa. Many (economically) small countries. Not all countries have ties to the UK. i) Russia/CIS. This the UK could get but this they don't want. They earth is limited. They are leaving the biggest market in the world in hopes of greener pastures. Good luck!

sonnyblarney 8y ago
Your comments assume 'FTA' is the key ingredient in the equation - it is not. The UK is growing financial services exports in almost all of the markets you mentioned, so I don't really see what your point is there. [1] Third - the UK is not 'leaving' European markets, they are changing the terms of trade. Goods and services will continue to flow. (Thankfully, 'services' don't face the fundamental challenges that 'goods' do at the border outside of a customs union) The UK already exports as much financial services to the US as it does to the entire EU [2] and the underlying impetus is fundamentally in the rest of the world. Similar to your comment about Japan - the UK already exports quite a lot in financial services (3 billion pounds/year and growing). " Also, trust me, the Chinese have not forgotten the Opium war" No, I don't trust you. [1] https://colresearch.typepad.com/colresearch/2017/03/trends-and-growth-in-uk-financial-services-trade-.html https://colresearch.typepad.com/colresearch/2017/03/trends-a... [2] https://colresearch.typepad.com/colresearch/2016/08/how-important-is-uk-financial-services-trade-to-the-eu.html https://colresearch.typepad.com/colresearch/2016/08/how-impo...
- 8y ago

rswail 8y ago

The UK already has a "Canada++" deal. They have carve outs on all sorts of EU regulations, they're not part of the Euro-zone, they have the natural barrier of the Channel (aside from inflatable rafts) against illegal immigration... Plus the UK currently has a say in all other EU regulation. Brexit was a stupid idea by rah-rah Tories that think the UK is still an Empire. Cameron was a mindless twat that thought he could kill off half his party with a dumb referendum.