ChatterBank3 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
Ellipsis, // We buy more from the EU than we sell them while we are members of the EU. There is absolutely no evidence that this will continue to remain the case once we leave the EU. There is not even a suggestion of why it would or should remain the case ...//
Oh no!! I didn’t think that! God, that is SCARY! They might be happy to damage their own trade by refusing to SELL to us!! Crikey!! Here’s a dilemma! What on earth are we going to do? Now let’s have a think. Japanese cars aren’t bad, neither is eastern technology; other countries rear meat and grow fruit and vegetables, and wines from the US, Australia and South America are quite palatable. Hmmm…. I don’t know about the EU but I suspect we’ll survive quite nicely.
Poor old Jim. Newspeak not working as usual. ;o)
Oh no!! I didn’t think that! God, that is SCARY! They might be happy to damage their own trade by refusing to SELL to us!! Crikey!! Here’s a dilemma! What on earth are we going to do? Now let’s have a think. Japanese cars aren’t bad, neither is eastern technology; other countries rear meat and grow fruit and vegetables, and wines from the US, Australia and South America are quite palatable. Hmmm…. I don’t know about the EU but I suspect we’ll survive quite nicely.
Poor old Jim. Newspeak not working as usual. ;o)
// Interesting comparisons, Krom - but they are from early 2016 - well over two years ago (and based on even older data) - before the improvements in GDP and employment that have scuppered so many of the 'adverse effect' predictions? //
I did want to comment on this, because clearly negative predictions about the UK's economic performance after Brexit also need to be critically evaluated. The best I can do as a summary is below:
1. In the first place, most predictions were based on the assumption that David Cameron would not resign on 24th June 2016, but instead do as he'd promised and trigger Article 50 instantly following a "Leave" vote. Of course this did not happen, and effectively the period from that date until the actual Notification nine months later was not accounted for in these predictions. Hard to see how it could have been.
2. However, that is still better seen as a delay to the models rather than an end to their usefulness. The OECD study of April 2016, for example, assumes that the UK will exit the EU in late 2018, followed by some form of transition period in 2019-2023 during which a new trade arrangement would be reached. In essence, then, this prediction is still reflecting what is going to happen, but one just had to add nine months. Hence, the OECD prediction would expect UK's GDP to drop by somewhere between 2 and 4 per cent (the central figure in their study is 3.3 per cent) by 2020, but this could now be plausibly revised to 3.3% in 2021.
3. It is further worth noting that the OECD study also predicted the impact of Brexit on 2016/2017/2018 economic growth to be relatively modest: a reduction of only 0.5% compared to what was otherwise expected. This is also not actually that far off from what was observed. In 2015 the UK's growth rate was 2.3%, and in the last two years it has been about 0.4% lower each year. How much of that is due to Brexit is hard to say (especially for me), but the basic point is that the OECD prediction was for a shock after the end of the two-year Article 50 period, and that period does not end until March 2019.
4. Moving on, the LSE analysis is similarly based on the assumption that the A50 Notification would begin on June 24th. Nevertheless, it starts by admitting what even Brexit supporters here often point out: "It is highly uncertain what the UK’s future would look like outside the EU, which makes ‘Brexit’ a leap into the unknown." Clearly, this leaves room for some new dynamic approach to Brexit that was not considered, which turns out to be better than all the models analysed therein -- but the conclusion is that all of the options studied, including a "no-deal" WTO scenario, would be harmful to varying degrees to the UK economy by their very nature, regardless of when the UK's exit proper starts.
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Links below:
https:/
http://
The second is a 171-page document that I have not read fully myself, nor do I expect others to read fully, but I figured it was important to have the citations. The second link also analyses and, as I have said before, utterly rejects Minford's analysis.
I did want to comment on this, because clearly negative predictions about the UK's economic performance after Brexit also need to be critically evaluated. The best I can do as a summary is below:
1. In the first place, most predictions were based on the assumption that David Cameron would not resign on 24th June 2016, but instead do as he'd promised and trigger Article 50 instantly following a "Leave" vote. Of course this did not happen, and effectively the period from that date until the actual Notification nine months later was not accounted for in these predictions. Hard to see how it could have been.
2. However, that is still better seen as a delay to the models rather than an end to their usefulness. The OECD study of April 2016, for example, assumes that the UK will exit the EU in late 2018, followed by some form of transition period in 2019-2023 during which a new trade arrangement would be reached. In essence, then, this prediction is still reflecting what is going to happen, but one just had to add nine months. Hence, the OECD prediction would expect UK's GDP to drop by somewhere between 2 and 4 per cent (the central figure in their study is 3.3 per cent) by 2020, but this could now be plausibly revised to 3.3% in 2021.
3. It is further worth noting that the OECD study also predicted the impact of Brexit on 2016/2017/2018 economic growth to be relatively modest: a reduction of only 0.5% compared to what was otherwise expected. This is also not actually that far off from what was observed. In 2015 the UK's growth rate was 2.3%, and in the last two years it has been about 0.4% lower each year. How much of that is due to Brexit is hard to say (especially for me), but the basic point is that the OECD prediction was for a shock after the end of the two-year Article 50 period, and that period does not end until March 2019.
4. Moving on, the LSE analysis is similarly based on the assumption that the A50 Notification would begin on June 24th. Nevertheless, it starts by admitting what even Brexit supporters here often point out: "It is highly uncertain what the UK’s future would look like outside the EU, which makes ‘Brexit’ a leap into the unknown." Clearly, this leaves room for some new dynamic approach to Brexit that was not considered, which turns out to be better than all the models analysed therein -- but the conclusion is that all of the options studied, including a "no-deal" WTO scenario, would be harmful to varying degrees to the UK economy by their very nature, regardless of when the UK's exit proper starts.
* * * *
Links below:
https:/
http://
The second is a 171-page document that I have not read fully myself, nor do I expect others to read fully, but I figured it was important to have the citations. The second link also analyses and, as I have said before, utterly rejects Minford's analysis.
These three lightweights don't seem to realise that they just have to call their cars prestige and all would be well.
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I cannot see any way to conclude that the EU are "reluctant to let (the UK) go". The UK has said it is leaving, the EU (so far as I am aware) neither tries to prevent the UK from leaving nor does it have any means at all to do so - the UK can/will leave the EU and become a non-member just as anyone else who leaves a club.
What is at issue is that in the immediate future the two will need to interact on a variety of matters, they are still both on the planet. The UK is seeking to tell the EU how it wants/will have those interactions, the EU is saying it will stick to its format and other existing international formats as/when appropriate. The EU says that, in the event of no bilateral EU/UK deal to replace the existing combination of the default formats, the combined formats (EU rules, WTO, etc.) will simply be used to govern any and all interactions. Both the EU and the UK have stated that this scenario is not the ideal they seek.
The UK appears to be taking the attitude that failure to reach a deal soon will by definition be the EU's fault simply because they will then not have accepted the UK's choice of agreement as put forward by the UK. Nobody who has ever tried to agree something with another party would seriously expect anyone to accept that interpretation - the demand is in that case not for an agreement but for acquiescence although the UK would say it is the EU's intransigence. It might so easily have been the reverse, as it so often was between the UK and others in the past, even very recently.
When somebody leaves a club then the club can be expected to continue its existence without the ex-member and in all likelihood without concerning itself as to how the ex-member conducts his/her life unless he/she and it cross paths somewhere, as the UK/EU inevitably will. Until an agreement is made, the two will proceed separately until such time as the two find a way to mutually negotiate all the resulting inconveniences. In fact, for many aspects, especially trade, the procedures already exist and my impression is that the EU is content to follow them but the UK is not. The UK was never settled in the ECM/EU and it appears they are not going to be settled outside it either - so what else is new ?
What is at issue is that in the immediate future the two will need to interact on a variety of matters, they are still both on the planet. The UK is seeking to tell the EU how it wants/will have those interactions, the EU is saying it will stick to its format and other existing international formats as/when appropriate. The EU says that, in the event of no bilateral EU/UK deal to replace the existing combination of the default formats, the combined formats (EU rules, WTO, etc.) will simply be used to govern any and all interactions. Both the EU and the UK have stated that this scenario is not the ideal they seek.
The UK appears to be taking the attitude that failure to reach a deal soon will by definition be the EU's fault simply because they will then not have accepted the UK's choice of agreement as put forward by the UK. Nobody who has ever tried to agree something with another party would seriously expect anyone to accept that interpretation - the demand is in that case not for an agreement but for acquiescence although the UK would say it is the EU's intransigence. It might so easily have been the reverse, as it so often was between the UK and others in the past, even very recently.
When somebody leaves a club then the club can be expected to continue its existence without the ex-member and in all likelihood without concerning itself as to how the ex-member conducts his/her life unless he/she and it cross paths somewhere, as the UK/EU inevitably will. Until an agreement is made, the two will proceed separately until such time as the two find a way to mutually negotiate all the resulting inconveniences. In fact, for many aspects, especially trade, the procedures already exist and my impression is that the EU is content to follow them but the UK is not. The UK was never settled in the ECM/EU and it appears they are not going to be settled outside it either - so what else is new ?
I don't know why being out of the Euro has proved good - unless it was to allow the Pound, and UK purchasing power, to fall in value. Conversely, it of course reduces the international price of UK products, so maybe that trumps everything - until UK inflation brings it up again (sometime, as it has).
No, dannyk13, if anything I am implying the exact opposite - contrary to the article quoted in the OP which, incidentally, was from January this year; hardly news. The EU will continue to sell us stuff quite happily. But where possible, rather than continue to buy stuff from us, they’ll buy it from within their own club.
The article talks in fervent terms of most of the EU’s losses being through tariffs imposed by the UK. The point the author was missing was that, in most cases, what the EU buys from us can be substituted by a product from a remaining EU country. So, in all likelihood, no tariffs for them and our balance of trade deficit is going to get much larger. This is especially the case if the pound suffers another big drop on a No Deal outcome, as is likely to happen.
The article talks in fervent terms of most of the EU’s losses being through tariffs imposed by the UK. The point the author was missing was that, in most cases, what the EU buys from us can be substituted by a product from a remaining EU country. So, in all likelihood, no tariffs for them and our balance of trade deficit is going to get much larger. This is especially the case if the pound suffers another big drop on a No Deal outcome, as is likely to happen.
//So if David Cameron had not resigned the country would have gone tits up?
Thank goodness he did.//
I am not aware of anyone saying that, but your comment does seem to be the stock response to any question regarding how we will handle affairs post Brexit. I am interested to know what people expect to happen to businesses that depend on EU trade. The car business which I used as an example where companies are in the UK mainly to produce goods for the EU market. A Japanese car company manufacturing in the UK will buy some parts from Europe, assemble their cars in the UK and sell them to the EU. How do you expect that to be affected with a no deal, and what would be your solution for any affect it has?
Thank goodness he did.//
I am not aware of anyone saying that, but your comment does seem to be the stock response to any question regarding how we will handle affairs post Brexit. I am interested to know what people expect to happen to businesses that depend on EU trade. The car business which I used as an example where companies are in the UK mainly to produce goods for the EU market. A Japanese car company manufacturing in the UK will buy some parts from Europe, assemble their cars in the UK and sell them to the EU. How do you expect that to be affected with a no deal, and what would be your solution for any affect it has?
“The one stumbling block to a clean break as I see it is the border between Eire & Northern Ireland.”
It’s not a stumbling block at all, Ron. It is a Red Herring presented by the EU to queer the pitch. Millions of £££s worth of goods enter and leave the EU (by way of the UK) every day by sea and air. Similarly goods cross the EU’s borders by land in eastern Europe. The EU does not have men and women with clipboards checking the cargo of every aircraft that lands at Heathrow or every ship that docks in Felixstowe. The piffling amount (relatively speaking) of goods that cross the Irish border pale into insignificance by comparison.
Neither the UK nor Ireland has any intention of imposing a hard border on the island of Ireland and since the EU has no resources of its own nor any authority to do so, there’s no chance of them setting one up. The issue is being used to screw ever more concessions from the pathetic UK "negotiators" who seem intent on making leaving look more like remaining than remaining would.
It’s not a stumbling block at all, Ron. It is a Red Herring presented by the EU to queer the pitch. Millions of £££s worth of goods enter and leave the EU (by way of the UK) every day by sea and air. Similarly goods cross the EU’s borders by land in eastern Europe. The EU does not have men and women with clipboards checking the cargo of every aircraft that lands at Heathrow or every ship that docks in Felixstowe. The piffling amount (relatively speaking) of goods that cross the Irish border pale into insignificance by comparison.
Neither the UK nor Ireland has any intention of imposing a hard border on the island of Ireland and since the EU has no resources of its own nor any authority to do so, there’s no chance of them setting one up. The issue is being used to screw ever more concessions from the pathetic UK "negotiators" who seem intent on making leaving look more like remaining than remaining would.
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