The economic consequences of Brexit (Vol 2)

[Tuna]

Eddie Strohacker said:

Always amazed that the sole study supporting hard Brexit is regurgitated every few months & received uncritically by the Brexit crowd. EVERY other study conducted has contradicted Minfords conclusions. Not one other supports it.

And yet, the BBC's Economic correspondent offers this

Andrew Walker said:

It is a counterintuitive idea, but actually the economics textbooks do provide some support for the idea of unilateral trade liberalisation.
This analysis suggests that removing trade barriers produces benefits for consumers and businesses buying components or raw materials that exceed the losses suffered in industries that face stiffer competition.

So um... your claim that 'not one other supports it' is proven to be wrong straight off the bat.

And as commented in the other thread, the sole 'case against' that the BBC presents in order to stay balanced is plainly wrong

Monique Ebell said:

Some foreign firms from outside the EU can produce more cheaply because they pollute, or treat workers in ways that we find unacceptable. So we impose tariffs to level the playing field. That is legitimate, and only fair.

Since when was a tariff a means of controlling the working environment of third parties?

[Tuna]

PurpleMoonlight said:

If it's such a great thing, why isn't every country doing it already?

Genuinely, I think it's because it's so counter-intuitive. Every thread on Brexit has people thinking that trade negotiations revolve around keeping tariffs high, and that 'our' tariffs (on imports to our country) 'punish' or 'control' the people we're buying from. It comes up again and again as the default assumption, and it takes a little bit of thought to realise that it's absolutely the wrong way round.

[Eddie Strohacker]

Tuna said:

Genuinely, I think it's because it's because I've just read something on the BBC that agrees with my preconceived notions, even though the data underpinning the report hasn't been released so it's impossible to verify it, so all we can say for certain is abolishing tariffs without reciprocal arrangements throws your workers on the scrap heap, but as a PH Brexiteer headbanger, we routinely dismiss those concerns as 'period of adjustment' or 'economic realignment' because Brexit is the revolution that eats it's children, but i don't care because Juncker the drunk lol.

Is what I'm sure you actually meant. And now I really am going out.

[Dr Jekyll]

Tuna said:

Genuinely, I think it's because it's so counter-intuitive. Every thread on Brexit has people thinking that trade negotiations revolve around keeping tariffs high, and that 'our' tariffs (on imports to our country) 'punish' or 'control' the people we're buying from. It comes up again and again as the default assumption, and it takes a little bit of thought to realise that it's absolutely the wrong way round.

+1

[Tuna]

Eddie Strohacker said:

Tuna said:

Genuinely, I think it's because it's because I've just read something on the BBC that agrees with my preconceived notions, even though the data underpinning the report hasn't been released so it's impossible to verify it, so all we can say for certain is abolishing tariffs without reciprocal arrangements throws your workers on the scrap heap, but as a PH Brexiteer headbanger, we routinely dismiss those concerns as 'period of adjustment' or 'economic realignment' because Brexit is the revolution that eats it's children, but i don't care because Juncker the drunk lol.

Is what I'm sure you actually meant. And now I really am going out.

You're so funny You do know I didn't vote for Brexit don't you? But I do care about what happens next. If we're changing our relationship with Europe, we've got to actually get it right, not retreat to ad-hominem attacks and insults, or party political games playing to the peanut gallery.

Actually, when I read that article, my first reaction was 'uh-oh, Minford!'. Of course, Minford is far from the only one calling for unilateral free trade: https://iea.org.uk/publications/a-trade-policy-for... But I guess because they're challenging your preconceived notions, they must also be Brexiteer headbangers.

When you get back from your woodland walk, perhaps you could actually show some evidence for disagreeing with the points being made, rather than just throwing mud around?

[PurpleMoonlight]

Tuna said:

Genuinely, I think it's because it's so counter-intuitive. Every thread on Brexit has people thinking that trade negotiations revolve around keeping tariffs high, and that 'our' tariffs (on imports to our country) 'punish' or 'control' the people we're buying from. It comes up again and again as the default assumption, and it takes a little bit of thought to realise that it's absolutely the wrong way round.

I would prefer FTA's rather than a blanket tariff free UK. An FTA can be tailored to benefit both sides equally.

[Tuna]

PurpleMoonlight said:

I would prefer FTA's rather than a blanket tariff free UK. An FTA can be tailored to benefit both sides equally.

The devil's in the details, but it's worth having the conversation and understanding how it could work.

My main feeling is that we have to get out of the mindset that our global trade policy once we've left should be to recreate a 'little Europe'. What works when you're one of 27 member states doesn't work when you're out of that trade bloc. CAP is a prime example where we could do some real good by thinking on a more local level.

The whole tariff and trade agreement discussion is dominated by vested interests and the immense momentum of the current system. Whilst people like Eddie cannot conceive of any sort of change, I think we have to grit our teeth a little and acknowledge that this is going to be a very difficult transition. Having done that we should do two things (1) actually have the discussion about making the change rather than mindlessly preserving the status quo and (2) face up to our responsibilities and support the people who's lives are going to change.

Food and agriculture is going to be impacted, but rather than wringing our hands and keeping 500% tariffs on olives, we should be looking at what our farming community wants and needs to be competitive. Subsidies, investment, new technology and research have to be far more desirable. We need to be investing in our rural communities anyway, so lets do that rather than treating tariffs and import quotas as a magic sticking plaster.

Those who call everyone who voted leave 'Brexiteers' would do well to keep in mind that the farming community, who are most directly affected by the tariff regime on a daily basis, were largely in favour of leaving.

[SantaBarbara]

Coolbanana said:

Yeah, right, let's prepare a 'perfect World' scenario re Tariffs etc - pure soundbites! It will never happen! Why do people fall for this rubbish?

Does anyone honestly think the Unions and Labour would accept a large number of job losses due to local Manufacturers and Farmers etc being unable to compete in this scenario? Labour would sweep to power, Corbyn would crush any such idea and the UK would be well on its way to bankruptcy. Next gormless idea from the Brexiteers?

Someone allowed the great light bulb scandal to take place

[anonymous-user]

Eddie Strohacker said:

Tuna said:

Genuinely, I think it's because it's because I've just read something on the BBC that agrees with my preconceived notions, even though the data underpinning the report hasn't been released so it's impossible to verify it, so all we can say for certain is abolishing tariffs without reciprocal arrangements throws your workers on the scrap heap, but as a PH Brexiteer headbanger, we routinely dismiss those concerns as 'period of adjustment' or 'economic realignment' because Brexit is the revolution that eats it's children, but i don't care because Juncker the drunk lol.

Is what I'm sure you actually meant. And now I really am going out.

I think you went out a long time ago.

[KrissKross]

What most people do not understand, and rightly so as its not something they are involved in during their average day jobs, is that TRADE is not carried out by politicians, not by the EU or any such terrible bureaucrat.

Trade is carried out by entrepreneurs and business people, and we adjust the trade parameters based on the obstacles that said bureaucrats put in place.

Whatever the outcomes, we will still trade.

What is absolutely critical though is that you have something to trade with that your "consumers" want. if your product, service or produce is crap, you wont do any trade in or out of the EU.

I hope I have made sense here because it truly is that simple!

And by the way the simpler we keep it the better off we will all become.

[SantaBarbara]

KrissKross said:

What most people do not understand, and rightly so as its not something they are involved in during their average day jobs, is that TRADE is not carried out by politicians, not by the EU or any such terrible bureaucrat.

Trade is carried out by entrepreneurs and business people, and we adjust the trade parameters based on the obstacles that said bureaucrats put in place.

Whatever the outcomes, we will still trade.

What is absolutely critical though is that you have something to trade with that your "consumers" want. if your product, service or produce is crap, you wont do any trade in or out of the EU.

I hope I have made sense here because it truly is that simple!

And by the way the simpler we keep it the better off we will all become.

However, agencies of government do buy items from other countries also

[KrissKross]

SantaBarbara said:

However, agencies of government do buy items from other countries also

Setting up procurement processes or even private agencies to handle "buying stuff" is relatively easy, tax funded or otherwise all you need is the best people in the position with specific tasks that benefit our country.

The is no "however" there is only people who wish to add layers of complexity that is unnecessary, and then claim its some how "complicated" because we don't understand how layer upon layer of nonsense became so deep over so long..

[alfie2244]

SantaBarbara said:

KrissKross said:

What most people do not understand, and rightly so as its not something they are involved in during their average day jobs, is that TRADE is not carried out by politicians, not by the EU or any such terrible bureaucrat.

Trade is carried out by entrepreneurs and business people, and we adjust the trade parameters based on the obstacles that said bureaucrats put in place.

Whatever the outcomes, we will still trade.

What is absolutely critical though is that you have something to trade with that your "consumers" want. if your product, service or produce is crap, you wont do any trade in or out of the EU.

I hope I have made sense here because it truly is that simple!

And by the way the simpler we keep it the better off we will all become.

However, agencies of government do buy items from other countries also

Are there currently rules about going out to tender to the whole EU?

[Eddie Strohacker]

Tuna said:

When you get back from your woodland walk, perhaps you could actually show some evidence for disagreeing with the points being made, rather than just throwing mud around?

Okey dokey, although it's almost as if you missed it on purpose?!! I'd be interested to see one other credible academic study that supports Minford, if you can provide one? And I don't mean a BBC economics correspondent, straining to fulfil thier obligation for balance, especially not from someone with a fair few posts in the BBC bias love in thread. That gives the unfortunate appearance of having your cake & eating it.

Anyway, here you go.

Eddie Strohacker said:

Always amazed that the sole study supporting hard Brexit is regurgitated every few months & received uncritically by the Brexit crowd. EVERY other study conducted has contradicted Minfords conclusions. Not one other supports it.

Minford makes a very dodgy assumption that general pressure - whatever that is will force the EU to drop it's import tariffs from 20 to 10%, ignoring the difference in safety & quality standards on EU goods on producer prices. Moreover, it assumes bizarrely the EU will drop its standards on goods imports from the UK post-Brexit, which implies precisely the sort of deep trade deal which the Economists for Brexit have been consistently arguing that the UK does not need to bother pursuing. Never happening.

So, the term unilateral free trading is doubly misleading, as it assumes reciprocal standards liberalisations with trading partners including the EU & on the EU - that's simply wrong.

Unless we sign an FTA that clearly removes all EU non tariff barriers to UK exports, WTO rules prevent the EU removing tariff barriers soley on the UK. It would be a race to the bottom & that's before you consider Minford's 4% GDP growth, that would require more integration with Europe than we have now as a full member! but can't be tested because he & the other authors won't release their data model.

It's hokum, yet unsurprisingly, a straw that is clutched every time it surfaces. As if it's not the actual sound of a group of convinced ideologue economists stting themselves.

And with that, I'm off out to do something productive. Enjoy your Sunday arguing the toss guys.

[Carl_Manchester]

Nobody truly knows the current true value of the £ over the next 5 years, the current level might be the right long-term value. People say it is undervalued by Brexit but we don't know what the capital inflows will be like once we leave.

This is why the government has been so insistent on lowering the corp. tax rate to 17% as it is one of the tools that the government controls (and not the bank of england) which can help attract money flows.

[///ajd]

Eddie Strohacker said:

Tuna said:

When you get back from your woodland walk, perhaps you could actually show some evidence for disagreeing with the points being made, rather than just throwing mud around?

Okey dokey, although it's almost as if you missed it on purpose?!! I'd be interested to see one other credible academic study that supports Minford, if you can provide one? And I don't mean a BBC economics correspondent, straining to fulfil thier obligation for balance, especially not from someone with a fair few posts in the BBC bias love in thread. That gives the unfortunate appearance of having your cake & eating it.

Anyway, here you go.

Eddie Strohacker said:

Always amazed that the sole study supporting hard Brexit is regurgitated every few months & received uncritically by the Brexit crowd. EVERY other study conducted has contradicted Minfords conclusions. Not one other supports it.

Minford makes a very dodgy assumption that general pressure - whatever that is will force the EU to drop it's import tariffs from 20 to 10%, ignoring the difference in safety & quality standards on EU goods on producer prices. Moreover, it assumes bizarrely the EU will drop its standards on goods imports from the UK post-Brexit, which implies precisely the sort of deep trade deal which the Economists for Brexit have been consistently arguing that the UK does not need to bother pursuing. Never happening.

So, the term unilateral free trading is doubly misleading, as it assumes reciprocal standards liberalisations with trading partners including the EU & on the EU - that's simply wrong.

Unless we sign an FTA that clearly removes all EU non tariff barriers to UK exports, WTO rules prevent the EU removing tariff barriers soley on the UK. It would be a race to the bottom & that's before you consider Minford's 4% GDP growth, that would require more integration with Europe than we have now as a full member! but can't be tested because he & the other authors won't release their data model.

It's hokum, yet unsurprisingly, a straw that is clutched every time it surfaces. As if it's not the actual sound of a group of convinced ideologue economists stting themselves.

And with that, I'm off out to do something productive. Enjoy your Sunday arguing the toss guys.

Here is what Prof Winters thinks.

http://www.independent.co.uk/news/business/news/br...

Interestingly, his forecast for needing no deal is based on the EU giving us the sort of amazing deal he says we don't need. They'll do this just because.

I'd love for the EU to offer us amazing tariff free frictionless customs trade. Like we have at the moment.

And I don't know anyone who is saying we want high tariffs, no remainder is saying this as far as I can tell, it is concern that a fudged Brexit might lead to a poor tariff / friction outcome.

[PRTVR]

If the value of the pound is so critical as some on here think, would not the Bank of England raise interest rates, so raising the pound, but they have not, yes they are consequences, but it must mean the people in charge are happy with the rate as it is.

[Sway]

Eddie Strohacker said:

Tuna said:

When you get back from your woodland walk, perhaps you could actually show some evidence for disagreeing with the points being made, rather than just throwing mud around?

Okey dokey, although it's almost as if you missed it on purpose?!! I'd be interested to see one other credible academic study that supports Minford, if you can provide one? And I don't mean a BBC economics correspondent, straining to fulfil thier obligation for balance, especially not from someone with a fair few posts in the BBC bias love in thread. That gives the unfortunate appearance of having your cake & eating it.

Anyway, here you go.

Eddie Strohacker said:

Always amazed that the sole study supporting hard Brexit is regurgitated every few months & received uncritically by the Brexit crowd. EVERY other study conducted has contradicted Minfords conclusions. Not one other supports it.

Minford makes a very dodgy assumption that general pressure - whatever that is will force the EU to drop it's import tariffs from 20 to 10%, ignoring the difference in safety & quality standards on EU goods on producer prices. Moreover, it assumes bizarrely the EU will drop its standards on goods imports from the UK post-Brexit, which implies precisely the sort of deep trade deal which the Economists for Brexit have been consistently arguing that the UK does not need to bother pursuing. Never happening.

So, the term unilateral free trading is doubly misleading, as it assumes reciprocal standards liberalisations with trading partners including the EU & on the EU - that's simply wrong.

Unless we sign an FTA that clearly removes all EU non tariff barriers to UK exports, WTO rules prevent the EU removing tariff barriers soley on the UK. It would be a race to the bottom & that's before you consider Minford's 4% GDP growth, that would require more integration with Europe than we have now as a full member! but can't be tested because he & the other authors won't release their data model.

It's hokum, yet unsurprisingly, a straw that is clutched every time it surfaces. As if it's not the actual sound of a group of convinced ideologue economists stting themselves.

And with that, I'm off out to do something productive. Enjoy your Sunday arguing the toss guys.

Sod the academic study, we can see the effects.

From the Dutch when gaining independence, through to Hong-Kong, Taiwan or Singapore, every single time a nation has dropped it's import tariff regime it has prospered.

As opposed to the plenty of studies that show the increased protectionism within the US at the start of the 20thC lengthened and deepened the Great Recession.

So forgive me, but why should I bother trying to find an economist that agrees? Especially when within your lengthy post you seem to confuse the principles of zero tariffs and dropping product/trade standards, when these things are mutually exclusive.

Minford argues the pressure will be on for the EU not to reciprocate via FTA, but also to adopt unilateral free trade (which we all know they'll never do thanks to at least the French). Otherwise, their exporters will face increased competition in one of the strongest consumer markets in the world (ours), whilst also facing increased competition at home from our exports, which benefit from lower component costs as an example. As you state, they cannot impose a greater tariff on us compared to the RoW... It's a nuanced argument, but clear logic if you think it through.

[///ajd]

Sway said:

Sod the academic study, we can see the effects.

From the Dutch when gaining independence, through to Hong-Kong, Taiwan or Singapore, every single time a nation has dropped it's import tariff regime it has prospered.

As opposed to the plenty of studies that show the increased protectionism within the US at the start of the 20thC lengthened and deepened the Great Recession.

So forgive me, but why should I bother trying to find an economist that agrees? Especially when within your lengthy post you seem to confuse the principles of zero tariffs and dropping product/trade standards, when these things are mutually exclusive.

Minford argues the pressure will be on for the EU not to reciprocate via FTA, but also to adopt unilateral free trade (which we all know they'll never do thanks to at least the French). Otherwise, their exporters will face increased competition in one of the strongest consumer markets in the world (ours), whilst also facing increased competition at home from our exports, which benefit from lower component costs as an example. As you state, they cannot impose a greater tariff on us compared to the RoW... It's a nuanced argument, but clear logic if you think it through.

Nuanced indeed - do you actually think they will? And after how long leaving the UK in a one sided tariff wilderness? The intervening period would be very painful.

The point about whether he has wider support is important to see whether he is just a David Icke type outlier, or whether his views have widespread support.

I note KK seems to think trade deals are irrelevant as business just works around barriers. He doesn't seem to see the risk that businesses relocate out of the UK into the EU if we screw this up. They will indeed adapt, I suspect he doesn't have the vision or scale to move his operation between countries - others however do. And that's GDP.

[Dr Jekyll]

///ajd said:

Nuanced indeed - do you actually think they will? And after how long leaving the UK in a one sided tariff wilderness? The intervening period would be very painful.

Why? Why would cheaper imports be painful? And if so, why would you want to even be in the EU? Surely you must want protectionist tariffs against the whole world.

///ajd said:

The point about whether he has wider support is important to see whether he is just a David Icke type outlier, or whether his views have widespread support.

I note KK seems to think trade deals are irrelevant as business just works around barriers. He doesn't seem to see the risk that businesses relocate out of the UK into the EU if we screw this up. They will indeed adapt, I suspect he doesn't have the vision or scale to move his operation between countries - others however do. And that's GDP.

You'd be hard pushed to find an economist who doesn't believe tariffs are bad.