Trade With Europe

[cassa333]

I have been reading a bit on an Euro exit and trade barriers etc.

Why would we, or any other nation, have to negotiate an agreement? Surely anyone wanting to do business with another business just, sort of, does the business!!

I just don't get it.

[bhg481]

A simple example. Each country in the EC has its own tax rules and currently if you buy goods in one EC country all the other countries accept that tax has been paid (even if not at the same rate as your own country) and the goods can be moved round freely with no interference from the tax people. This would stop, unless some agreement were reached with the EC. Going back to the days before the EC, if you took your car to Europe and had an accident there which wrote it off the car was classed as a permanent import to the country where the accident was, so import duties had to be paid. If you've ever tried to drive from Gibralta into Spain or Andorra into Spain or France, even in a private car, you might have had hassle at the border (particularly with the Spanish), Gibralta and Andorra not being in the EU. I don't know anything about the rules for businesses trading with EU countries but I'm sure there are concessions in place currently which could disappear if we left the EU; these could probably be re-negotiated but it all adds to the complication of leaving.

[Buenchico]

As an example, try ordering cotton-based clothing from the USA. When the postman delivers it, you'll get charged 27% Import Tax (as well as 20% VAT and an £8 administration fee).

If you order a similar item from China, you'll pay 12% Import Duty (plus the VAT and admin fee).

However if you import it from France, Germany, Italy or anywhere else within the EU you won't pay a penny in Import Duty. (VAT will have been included in the purchase price anyway).

Basically, all countries tax imports of most items unless they've entered into agreements with other countries (either on a bilateral basis or, more commonly, as part of a 'free trade' area). The USA, Canada and Mexico have such an agreement (NAFTA), so that most goods and services can be traded freely across their borders. India, Bangladesh, Sri Lanka, China, South Korea and Laos have a broadly similar agreement (APTA). Such agreements show that even major trading powers (such as the USA and China) are reluctant to 'go it alone', believing that they're better off working in partnership with other nations.

The UK is in the European Economic Area, which provides 'barrier-free' trade across all 31 member countries, 28 of which are within the European Union.

If the UK was to leave to EU it could still remain within the EEA, so the UK could still benefit from free trade across the whole of the area. (Norway already holds such a status, as a member of the EEA but not of the EU). The disadvantage though would be that the UK would still be bound by nearly all EU rules, since they apply throughout the EEA, (which wouldn't please Eurosceptics) but with no say whatsoever as to what those rules should be (which wouldn't please the Europhiles).

If the UK was to leave both the EU and the EEA, treading with other European countries would be much, much harder and overseas investors (such as Japanese car manufacturers with plants in the UK) would almost certainly pull their operations out of this country.

[mikey4444]

cassa...you've got two good replies here !

[-SharonA-]

And a good reason to vote to stay in!!!! :-)

[Khandro]

Chris; So instead of buying Volkswagens with the new higher duty, Brits could buy Hondas, now more competitively priced, (and better) and save British jobs at Swindon?

[bhg481]

I think we take a lot of things about the EU for granted and only notice the things which have an adverse effect on us. The grass is always greener etc and I feel there are lots of things that we will sorely miss if we leave.

[bhg481]

True Khandro, until Honda pulls out of the UK.

[Old_Geezer]

And an utterly abominable reason to affect a decision on whether to stay in or leave the EU. There is no reason trade contracts can't be made without one's country being swallowed by some conglomerate mass, and your nation's right to rule itself lost. It's in everyone's interest to agree such contracts.

[Khandro]

bhg;//until Honda pulls out of the UK.//

But if home manufactured products become comparatively cheaper, won't more people buy them, saving jobs and allowing the manufacturers to remain and prosper?

But I don't think we should only be looking at fiscal matters, as the market has a way of sorting itself out, and when I see the financiers of the 'stay' campaign are Goldman Sachs and Morgan Stanley, I sure as hell smell a rat, - these are the people who led Greece up the creek without a paddle.