The economic consequences of Brexit

[sparkythecat]

don4l said:

PurpleMoonlight said:

Why would countries spend significant time and money trying to agree a trade deal with the UK when they have no idea when that may be effective from and what our WTO default is?

Oh dear!

You don't understand how the WTO operates, do you?

I would advise that you don't mention it until you learn a little bit about it.

There is plenty of explanation in layman's terms on the WTO website, which is very good, together with links to the more complex legal agreements.

Getting to grips with its it's entirety should help make those long winter evenings fly by.

https://www.wto.org/english/thewto_e/whatis_e/tif_...

[walm]

Welshbeef said:

PurpleMoonlight said:

We can establish our own applied rates once we leave the EU though, yes?

We don't establish them they are simply the default position if you do not have a trading agreement between countries.

My understanding is that the "bound" rates are the default - but the "applied" (which still come under the WTO remit) can be different (but must be lower) - however they must apply to ALL members no MFNs allowed.

So the applied rates are established while the bound are the default.

[B'stard Child]

saabster14 said:

B'stard Child said:

"NP&E Tradition" since end June this year - when PM who was very vociferous about the result of the EU referendum in multiple threads fessed up that he hadn't actually voted.......

So please FRO.....

FRO?

Condescending post number 2 - work it out

[walm]

saabster14 said:

B'stard Child said:

"NP&E Tradition" since end June this year - when PM who was very vociferous about the result of the EU referendum in multiple threads fessed up that he hadn't actually voted.......

So please FRO.....

FRO?

You'll find it in the charm section of TLAs.

[B'stard Child]

walm said:

saabster14 said:

B'stard Child said:

"NP&E Tradition" since end June this year - when PM who was very vociferous about the result of the EU referendum in multiple threads fessed up that he hadn't actually voted.......

So please FRO.....

FRO?

You'll find it in the charm section of TLAs.

True that

[saabster14]

B'stard Child said:

Condescending post number 2 - work it out

blimey you're getting a bit touchy.

[HughiusMaximus]

Garvin said:

PurpleMoonlight said:

Welshbeef said:

Why do we have to wait?

What will the EU do to us if we do commence trade deal negotiations which will govlive on our exit?
State it's not legally binding? Who cares it's post our exit
Give us a fine? Who cares it's worth it
Tell us off ? Who cares

Why would countries spend significant time and money trying to agree a trade deal with the UK when they have no idea when that may be effective from and what our WTO default is?

Now let's see? Perhaps those who already export a lot to the UK under EU arrangements and might be a tad worried about tariffs being applied the day after actual Brexit. How about those countries who see the world's fifth largest economy possibly opening up a potentially lucrative market for them? Why delay any more than necessary?

6th largest economy... it was overtaken by France post Brexit due to the drop in the value of the pound!

[PurpleMoonlight]

B'stard Child said:

"NP&E Tradition" since end June this year - when PM who was very vociferous about the result of the EU referendum in multiple threads fessed up that he hadn't actually voted.......

Only from certain individuals of which I thought you weren't one.

Live and learn I guess .....

[walm]

Out of interest PM - why didn't you vote?

[B'stard Child]

PurpleMoonlight said:

B'stard Child said:

"NP&E Tradition" since end June this year - when PM who was very vociferous about the result of the EU referendum in multiple threads fessed up that he hadn't actually voted.......

Only from certain individuals of which I thought you weren't one.

Live and learn I guess .....

To be specific I "pledged" that "I would" - not that "I wouldn't" although it wasn't in the pledge thread it was in the one that kicked it off

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

In that thread B'stard Child said:

But I'd draw the red line at not ribbing Purplemoonlight for not even voting - because that's got loads of mileage left in it - sorry fella - nothing personal

Spend your life living and learning is a good way to do it

Edited by B'stard Child on Wednesday 30th November 10:27

[B'stard Child]

saabster14 said:

B'stard Child said:

Condescending post number 2 - work it out

blimey you're getting a bit touchy.

Not at all

[don4l]

HughiusMaximus said:

6th largest economy... it was overtaken by France post Brexit due to the drop in the value of the pound!

The Pound has strenghtened since then.

Do try to keep up!

[Digga]

don4l said:

HughiusMaximus said:

6th largest economy... it was overtaken by France post Brexit due to the drop in the value of the pound!

The Pound has strenghtened since then.

Do try to keep up!

Let's see what the Italians bring to the party at the weekend.

[AW111]

don4l said:

The Pound has strenghtened since then.

Do try to keep up!

Seeing as you were trumpeting about how great the devalued pound was for Britain and business, I assume you see the strengthening of the pound as bad news?

[London424]

HughiusMaximus said:

Garvin said:

PurpleMoonlight said:

Welshbeef said:

Why do we have to wait?

What will the EU do to us if we do commence trade deal negotiations which will govlive on our exit?
State it's not legally binding? Who cares it's post our exit
Give us a fine? Who cares it's worth it
Tell us off ? Who cares

Why would countries spend significant time and money trying to agree a trade deal with the UK when they have no idea when that may be effective from and what our WTO default is?

Now let's see? Perhaps those who already export a lot to the UK under EU arrangements and might be a tad worried about tariffs being applied the day after actual Brexit. How about those countries who see the world's fifth largest economy possibly opening up a potentially lucrative market for them? Why delay any more than necessary?

6th largest economy... it was overtaken by France post Brexit due to the drop in the value of the pound!

You sure about that one?

[stongle]

AW111 said:

Seeing as you were trumpeting about how great the devalued pound was for Britain and business, I assume you see the strengthening of the pound as bad news?

Don't go there, in a world of digital responses "does not compute, does not compute"

Anyway,

This debate is a lot more complex than WTO rules.

Our balance of trade is shocking and UK PLC has a productivity problem, that is more to do with infrastructure. That isn’t going to turn itself around without significant fiscal investment; something we simply cannot afford given the current economic outlook and ridiculous welfare bills (and INHO the UK’s lazy c**t problem trumps our immigration one – but lets not go there).

It’s simply impossible to ignore that the UK services sectors way outperform manufacturing / goods in global league tables (3rd largest services global exporter / trader Vs 10th or 11th for exports of goods); and close our balance of payments gap as best possible. Its more critical to get deals brokered in and around services particularly MiFID, EMIR and passporting than the fantasy nirvana of a deal that regenerates manufacturing in the UK. Only fiscal intervention will ignite that powerhouse so we shouldn’t burn the Golden Goose of Tax revenues that is the services and finance sectors.

Our negotiating hand on Services is a lot better than it is elsewhere, but it’s much more complex and nuanced area. Changes in the US with the potential repeal of Volcker and moves to strengthen bank capital do fit in line with the BoE – without the structural weaknesses and challenges the ECB faces with bank capital, bail in and contagion. In fact the EUROZONE may have to promote smaller CET1 buffers for their banks than the UK or US (we’ve already adopted elements of IFRS9 the Eurozone banks would be underwater when they do). We should ignore RBS as it’s a basket case currently (a state owned bank fails a stress test – hahahahohohoho) – but would probably outperform Euro banks in the BoE tests.

Even if you get the basis of an agreement done in a couple of years it will take years to implement given the subsequent redrafting of individual or bilateral firm level agreements that govern transactions. We’re still implementing post GFC Financial regulations 9 years after the first bank collapses and it goes onwards beyond 2020. It’s going to take years.

I was 55:45 remain / leave; but we’re coming out now so we best make the best of the negotiation (actually I’m now 60:40 in favour of leave with the blind optimism that May may actually be able to steer the ship and get us a result) . But, but, but we need to re-invent our Services sector as a / THE Global hub for trade finance and financial services and offer incentives thus. A cross between Cayman, Singapore, Switzerland & London supermax centre would be a great result for UK PLC (and a great result from leaving the EU) . A kamikaze approach being advanced by the most ardent Brexiters will burn our ability to actually get the “cake and eat it”.

[don4l]

AW111 said:

don4l said:

The Pound has strenghtened since then.

Do try to keep up!

Seeing as you were trumpeting about how great the devalued pound was for Britain and business, I assume you see the strengthening of the pound as bad news?

I do, indeed.

If you ask me whether I would prefer to export more, or be part of the 5th biggest economy, I'll definitely take the exports!

[Digga]

stongle said:

Don't go there, in a world of digital responses "does not compute, does not compute"

Anyway,

This debate is a lot more complex than WTO rules.

Our balance of trade is shocking and UK PLC has a productivity problem, that is more to do with infrastructure. That isn’t going to turn itself around without significant fiscal investment; something we simply cannot afford given the current economic outlook and ridiculous welfare bills (and INHO the UK’s lazy c**t problem trumps our immigration one – but lets not go there).

It’s simply impossible to ignore that the UK services sectors way outperform manufacturing / goods in global league tables (3rd largest services global exporter / trader Vs 10th or 11th for exports of goods); and close our balance of payments gap as best possible. Its more critical to get deals brokered in and around services particularly MiFID, EMIR and passporting than the fantasy nirvana of a deal that regenerates manufacturing in the UK. Only fiscal intervention will ignite that powerhouse so we shouldn’t burn the Golden Goose of Tax revenues that is the services and finance sectors.

Our negotiating hand on Services is a lot better than it is elsewhere, but it’s much more complex and nuanced area. Changes in the US with the potential repeal of Volcker and moves to strengthen bank capital do fit in line with the BoE – without the structural weaknesses and challenges the ECB faces with bank capital, bail in and contagion. In fact the EUROZONE may have to promote smaller CET1 buffers for their banks than the UK or US (we’ve already adopted elements of IFRS9 the Eurozone banks would be underwater when they do). We should ignore RBS as it’s a basket case currently (a state owned bank fails a stress test – hahahahohohoho) – but would probably outperform Euro banks in the BoE tests.

Even if you get the basis of an agreement done in a couple of years it will take years to implement given the subsequent redrafting of individual or bilateral firm level agreements that govern transactions. We’re still implementing post GFC Financial regulations 9 years after the first bank collapses and it goes onwards beyond 2020. It’s going to take years.

I was 55:45 remain / leave; but we’re coming out now so we best make the best of the negotiation (actually I’m now 60:40 in favour of leave with the blind optimism that May may actually be able to steer the ship and get us a result) . But, but, but we need to re-invent our Services sector as a / THE Global hub for trade finance and financial services and offer incentives thus. A cross between Cayman, Singapore, Switzerland & London supermax centre would be a great result for UK PLC (and a great result from leaving the EU) . A kamikaze approach being advanced by the most ardent Brexiters will burn our ability to actually get the “cake and eat it”.

Great post.

Other than, I do think it critical to invest in infrastructure for several reasons:

1. the demand/population is not going to go away, but merely increase, so fixing now gives earlier return on investment.
2. the service sector does, in some instances need the rest of the economy, so the better it works, the stronger the service sector.
3. IMHO a significant chunk of the GE and Brexit 'protest vote' is down to regions feeling (rightly) underinvested.

[Murph7355]

PurpleMoonlight said:

We can establish our own applied rates once we leave the EU though, yes?

We could. But when embarking on trade deals generally there are few/no instances where I would think that would be sensible to spend time doing.

Whatever is currently in the WTO handbook is the backstop for any bilateral negotiation. Making those terms intrinsically better without some quid quo pro wouldn't be wise.

Ref your other response, I didn't mention civil servants. I actually think our governments should leverage our commercial sector more in its machinations. Civil servants, IMO, often have bugger all experience in the real world. Which, again IMO, is a large part in why governments mess things up.

Another thought too... We tend to worry about the volume of trade deals we need to do. I think we only need to conclude one good one to be able to accelerate all the rest.

[stongle]

Digga said:

Great post.

Other than, I do think it critical to invest in infrastructure for several reasons:

1. the demand/population is not going to go away, but merely increase, so fixing now gives earlier return on investment.
2. the service sector does, in some instances need the rest of the economy, so the better it works, the stronger the service sector.
3. IMHO a significant chunk of the GE and Brexit 'protest vote' is down to regions feeling (rightly) underinvested.

Agreed, but the economy IS going to suffer in the next few years - (with or without BREXIT) and we don't have enough money to actually implement Fiscal programs. UK PLC needs every single penny of tax revenue to run ANY sort of infrastructure program. Hammond is trying to build a £20bn war chest (to deploy just before next GE); but £20bn is a drop in the ocean (its F**k All).

There seems to be a lot of regional discontent towards London - which is justified; but we cannot afford to do ANY sort of deal that hampers our main trading asset (regardless whether you think we should be knocking out more Land Rovers). A rush deal focused towards Goods could irreversibly damage the UK economy; when we need fiscal stimulus (and some of the more pro Brexiters here have less than FA knowledge on the service or finance sectors their comments are often laughable).