Quizzes & Puzzles5 mins ago
Eu To Lose £500Bn And Uk To Gain £640Bn In No-Deal Brexit
…says Patrick Minford professor of economics at Cardiff University and chair of the Eurosceptic Economists for Free Trade group.
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The Sun itemises:
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No surprise they’re reluctant to let us go. Bring it on!
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The Sun itemises:
https:/
No surprise they’re reluctant to let us go. Bring it on!
Answers
The Times has this interesting analysis behind its paywall - so I'll break with my usual habit and do a biggish cut/paste : "It seems that there is no way to satisfy those who want to crack the big end of an egg and those who want to crack the small end. Therefore, leaving without a trade deal with the European Union 27 is growing more likely. Both Mark Carney,...
08:43 Mon 06th Aug 2018
// Some seem to think that economics trumps all, and stress any minuses to make a questionable case. //
For the sake of clarity, I can accept that economic arguments might not be -- and perhaps even shouldn't be -- the deciding factor. But, since this thread is about making an economic case *for* Brexit, it's still important to place that case in its proper context -- ie a minority view based on dubious assumptions and the product of blatant bias.
I don't know how economists implement their modelling but in other fields it's common to "blind" the modelling and output as far as possible, ie to ensure that it's only at the very end that you find out what your model actually predicts. This is designed to avoid, or at least reduce, the chances that your own biases dictate what you end up predicting. If the same method is common in economics -- and it certainly should be -- then it doesn't matter whether the economist is biased in favour of or against Brexit; what is up for debate is the economic argument.
And, on that, Minford is losing the argument; his model is suspect, and therefore so too are his predictions.
For the sake of clarity, I can accept that economic arguments might not be -- and perhaps even shouldn't be -- the deciding factor. But, since this thread is about making an economic case *for* Brexit, it's still important to place that case in its proper context -- ie a minority view based on dubious assumptions and the product of blatant bias.
I don't know how economists implement their modelling but in other fields it's common to "blind" the modelling and output as far as possible, ie to ensure that it's only at the very end that you find out what your model actually predicts. This is designed to avoid, or at least reduce, the chances that your own biases dictate what you end up predicting. If the same method is common in economics -- and it certainly should be -- then it doesn't matter whether the economist is biased in favour of or against Brexit; what is up for debate is the economic argument.
And, on that, Minford is losing the argument; his model is suspect, and therefore so too are his predictions.
The Times has this interesting analysis behind its paywall - so I'll break with my usual habit and do a biggish cut/paste :
"It seems that there is no way to satisfy those who want to crack the big end of an egg and those who want to crack the small end. Therefore, leaving without a trade deal with the European Union 27 is growing more likely. Both Mark Carney, governor of the Bank of England, and Liam Fox, the trade secretary, have said so in recent days.
The prospect need not terrify us. Project Fear has grown steadily more absurd as we have progressed through the grid of scary announcements prepared by the anti-Brexit campaign to fill the silly season. A sandwich drought? Insulin shortages? Not enough avocados? Airbus off to — er, China?
Project Fear Mark 1 was wrong and the chances are Mark 2 will be too. The economy is running at near full capacity, unemployment is close to a million below where George Osborne promised it would be by now, the deficit is shrinking faster than expected and foreign direct investment is continuing, all in sharp contrast to what we were promised if we voted to leave."
"Any measures that Blefuscu/Brussels could take to strangle our economy in retaliation would be illegal under the World Trade Organisation rules. Claims from the Confederation of British Industry and the National Farmers’ Union that there could be customs delays and non-tariff standards barriers against British food exports or imports fly in the face of what we actually know, that the WTO’s Agreement on Sanitary and Phytosanitary Measures, its Technical Barriers to Trade Agreement and its Trade Facilitation Agreement all now forbid discrimination against a WTO member."
"The evidence suggests that WTO terms work well. Michael Burrage of Economists for Free Trade has calculated that over the 22 years from 1993 to 2015 the leading countries that export to the European Union on WTO terms grew their trade with the EU almost twice as fast as countries within the EU grew their trade with each other, and much faster than the growth of UK exports into the single market. Britain currently exports to more than 100 countries on WTO terms, and has grown those exports three times as fast as exports to the rest of the EU since 1993.
Remember the words of Roberto Azevêdo, director-general of the WTO: “About half of the UK’s trade is already on WTO terms with the US, China and several large emerging nations where the EU doesn’t have trade agreements. So it’s not the end of the world if the UK trades under WTO rules with the EU.”
Departing on WTO terms would save much of the £39 billion bill for domestic spending here instead, compensating for any problems that do arise. The prospect of missing out on that contribution to the EU budget from the British taxpayer may yet concentrate minds in Blefuscu, and a deal may happen. But Liliput should be sanguine about WTO terms and not just as a negotiating ploy, but because we could make them work."
Matt Ridley
"It seems that there is no way to satisfy those who want to crack the big end of an egg and those who want to crack the small end. Therefore, leaving without a trade deal with the European Union 27 is growing more likely. Both Mark Carney, governor of the Bank of England, and Liam Fox, the trade secretary, have said so in recent days.
The prospect need not terrify us. Project Fear has grown steadily more absurd as we have progressed through the grid of scary announcements prepared by the anti-Brexit campaign to fill the silly season. A sandwich drought? Insulin shortages? Not enough avocados? Airbus off to — er, China?
Project Fear Mark 1 was wrong and the chances are Mark 2 will be too. The economy is running at near full capacity, unemployment is close to a million below where George Osborne promised it would be by now, the deficit is shrinking faster than expected and foreign direct investment is continuing, all in sharp contrast to what we were promised if we voted to leave."
"Any measures that Blefuscu/Brussels could take to strangle our economy in retaliation would be illegal under the World Trade Organisation rules. Claims from the Confederation of British Industry and the National Farmers’ Union that there could be customs delays and non-tariff standards barriers against British food exports or imports fly in the face of what we actually know, that the WTO’s Agreement on Sanitary and Phytosanitary Measures, its Technical Barriers to Trade Agreement and its Trade Facilitation Agreement all now forbid discrimination against a WTO member."
"The evidence suggests that WTO terms work well. Michael Burrage of Economists for Free Trade has calculated that over the 22 years from 1993 to 2015 the leading countries that export to the European Union on WTO terms grew their trade with the EU almost twice as fast as countries within the EU grew their trade with each other, and much faster than the growth of UK exports into the single market. Britain currently exports to more than 100 countries on WTO terms, and has grown those exports three times as fast as exports to the rest of the EU since 1993.
Remember the words of Roberto Azevêdo, director-general of the WTO: “About half of the UK’s trade is already on WTO terms with the US, China and several large emerging nations where the EU doesn’t have trade agreements. So it’s not the end of the world if the UK trades under WTO rules with the EU.”
Departing on WTO terms would save much of the £39 billion bill for domestic spending here instead, compensating for any problems that do arise. The prospect of missing out on that contribution to the EU budget from the British taxpayer may yet concentrate minds in Blefuscu, and a deal may happen. But Liliput should be sanguine about WTO terms and not just as a negotiating ploy, but because we could make them work."
Matt Ridley
As a matter of fact, it's worth remembering the *rest* of the quote that Matt Ridley cites, from the WTO head:
"...the other half [of the UK's trade] is in fact under preferential agreements. So there will be an impact [from Brexit].
... it’s not going to be the end of the world but it’s not going to be a walk in the park either. It is going to be a bumpy road. How bumpy it’s going to be will depend on many things including on the outcome of the negotiations with the EU.”
One might think, from Matt Ridley's selective quoting, that the WTO Sec-Gen was arguing that no-deal Brexit wasn't a problem at all. Just to be clear, this is completely wrong, from which it follows that Matt Ridley's entire argument is bogus.
"...the other half [of the UK's trade] is in fact under preferential agreements. So there will be an impact [from Brexit].
... it’s not going to be the end of the world but it’s not going to be a walk in the park either. It is going to be a bumpy road. How bumpy it’s going to be will depend on many things including on the outcome of the negotiations with the EU.”
One might think, from Matt Ridley's selective quoting, that the WTO Sec-Gen was arguing that no-deal Brexit wasn't a problem at all. Just to be clear, this is completely wrong, from which it follows that Matt Ridley's entire argument is bogus.
Jim, well if you expect me to jump on your Project Fear bandwagon and join you in your Newspeak spin, think again. sunny-dave's link is absolutely right. //Project Fear has grown steadily more absurd as we have progressed through the grid of scary announcements prepared by the anti-Brexit campaign to fill the silly season. A sandwich drought? Insulin shortages? Not enough avocados? Airbus off to — er, China?//
Not bias - common sense.
Not bias - common sense.
Re Nobel prize for economics? What a joke. They don't have a clue & never have.
Three winners with totally different viewpoints:
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Give the honours & money to hard sciences which actually achieve something.
Three winners with totally different viewpoints:
https:/
Give the honours & money to hard sciences which actually achieve something.
Any trade argument that is based on the current position is stupid, because we won't be in this position. Instead, ask yourself ...
What do we supply to the EU that another EU member can't supply in our place? [Not much, so we'll lose trade into the EU to remaining EU members]
Of those things that other EU members can't supply in our place, is there another country in the world that could supply them on more favourable terms than us, given no trade deal between us and the EU? [Probably, so we'll lose trade into the EU to global competitors]
And the other way around ...
What does the EU supply to us that we can't supply for ourselves, so we'll have to keep on importing from somewhere? [Quite a lot]
Will we keep on importing it from the EU, or will we look to the wider world? [Does it matter?]
What do we supply to the EU that another EU member can't supply in our place? [Not much, so we'll lose trade into the EU to remaining EU members]
Of those things that other EU members can't supply in our place, is there another country in the world that could supply them on more favourable terms than us, given no trade deal between us and the EU? [Probably, so we'll lose trade into the EU to global competitors]
And the other way around ...
What does the EU supply to us that we can't supply for ourselves, so we'll have to keep on importing from somewhere? [Quite a lot]
Will we keep on importing it from the EU, or will we look to the wider world? [Does it matter?]
Some opinion articles seem to imply/state that a customs union means that because goods can be passed to any member country without further checks, trading under WTO rules to one means they have to be checked by all. But having passed the first country's check that should guarantee it already passes the union's rules anyway so need not be checked again. (If this wasn't intended to be implied then I find some articles misleading.) Get the track record paperwork gor the goods together and there should be minimal hold-up. Especially since the UK already sends goods to EU regs it's already geared to do so. Concerns about trading after exit seem exaggerated to me.
Common sense tells you that it is worth being properly aware of the risks of something before blindly carrying on with it. It's been stressed in several places that UK imports are based on a "just in time" approach, supplies arriving *when* they are needed, rather than days or weeks beforehand. It therefore stands to reason that any disruption to that supply chain can have serious consequences.
The insulin example is typical: the UK produces (almost) no insulin of its own, relying instead on imports; this, along with thousands of other medicines, would therefore have a severely disrupted supply chain if we were to leave on terms that slow down the rate at which these come into the UK -- terms that are certain to occur, by definition, in a no-deal scenario.
As it happens, various supply agencies are planning for this scenario and either building up or increasing their stockpiles: the very act of doing so indicates that Ridley's dismissive tone is mistaken. There are real risks to a no-deal scenario, and therefore it's right to highlight and prepare for them to avoid this.
That is what common sense tells you, and it is what Matt Ridley -- and, by extension, you and Sunny-D -- are lacking by just flat-out ignoring even the possibility of such risks.
Project Fear? No. Project Pragmatism.
* * * * *
In terms of the BA debate, I could hardly expect to be awarded it myself, but it's nevertheless a shame that something so completely and demonstrably wrong in content and tone earns it. As a matter of fact I would have thought OG's first answer in this thread might have earned it, referring as he does to the idea that economic arguments should maybe not come ahead of sovereignty issues. I still think he's wrong -- but at least there it's a matter of opinion rather than substance.
There is no economic case for Brexit, certainly not Hard Brexit, that survives scrutiny. Claims that the UK will be better off, economically, in the short term are wrong. If that doesn't matter to you, then fair enough -- one has to weigh up risks, and a hit to our economy may be judged worth the risk. But there's no use in pretending that the hit won't happen. It already has happened, and it will continue to happen as we progress with Brexit, whatever form it may take.
The insulin example is typical: the UK produces (almost) no insulin of its own, relying instead on imports; this, along with thousands of other medicines, would therefore have a severely disrupted supply chain if we were to leave on terms that slow down the rate at which these come into the UK -- terms that are certain to occur, by definition, in a no-deal scenario.
As it happens, various supply agencies are planning for this scenario and either building up or increasing their stockpiles: the very act of doing so indicates that Ridley's dismissive tone is mistaken. There are real risks to a no-deal scenario, and therefore it's right to highlight and prepare for them to avoid this.
That is what common sense tells you, and it is what Matt Ridley -- and, by extension, you and Sunny-D -- are lacking by just flat-out ignoring even the possibility of such risks.
Project Fear? No. Project Pragmatism.
* * * * *
In terms of the BA debate, I could hardly expect to be awarded it myself, but it's nevertheless a shame that something so completely and demonstrably wrong in content and tone earns it. As a matter of fact I would have thought OG's first answer in this thread might have earned it, referring as he does to the idea that economic arguments should maybe not come ahead of sovereignty issues. I still think he's wrong -- but at least there it's a matter of opinion rather than substance.
There is no economic case for Brexit, certainly not Hard Brexit, that survives scrutiny. Claims that the UK will be better off, economically, in the short term are wrong. If that doesn't matter to you, then fair enough -- one has to weigh up risks, and a hit to our economy may be judged worth the risk. But there's no use in pretending that the hit won't happen. It already has happened, and it will continue to happen as we progress with Brexit, whatever form it may take.
Anyone relying on risky JIT supply will need a dose of reality and hold stocks. It's project fear to stress that as an example of things going to hell in a handbasket. It's merely common sense to hold stocks and they should do so anyway. It's the blind faith in efficiency being everything, even risking running out, that drives JIT. The ability to respond to situations is also important.
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