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Steppenpig

Brexitnomics

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Sorry for yet another thread, but thought it would be handy to have a place for more specific financial aspects, without the emotional baggage. And I want to keep track of it, without wading through pages.

I waded through much of the treasury analysis on the costs of Brexit. I was a bit disappointed not to see more breakdown of projected trade/gdp etc, so I could give it a bit of analytical review.

1. I was surprised to discover that they seem to be precicting a fall in trade, not only with the EU, but also with the rest of the world, apparently due to losing the access to the EU Free Trade Agreements with other nations or trading blocs. Unfortunately, the respective declines were not quantified (as far as I could tell). This analysis seems to have been nodded through by the various independent financial experts paraded on TV, so presumably this is the general opinion of the economics profession. It seems odd that no one has explicitely pointed this out, as I believe most brexiteers are assuming growth in world trade, and it would undermine their case.

2, Apparently under WTO rules, you cannot have any favourable treatment with any particular countries or blocs, so if we wanted to trade with (say) the EU, we automatically became subject to their tariff of 10% on motor cars, and if we imposed an equivalent tariff, we would have to apply the same tariff to all WTO countries. I don't understand how this could ever work, unless the WTO countries all have identical tariffs (are effectively a bloc temselves) and never trade with other blocs.

3. Just to mention, that immigration is projected as identical under all 3 scenarios. I don't know what economic impact it has.

Any enlightenment welcome. Ta

(Just to mention, the financial impact is irrelevant to my opinion on brexit, I am just interested in numbery stuff)

edit, oh just noticed the "is osbourne just digging.." thread. i could have posted there. feel free to merge if you want.

Edited by Steppenpig

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Sorry for yet another thread, but thought it would be handy to have a place for more specific financial aspects, without the emotional baggage. And I want to keep track of it, without wading through pages.

I waded through much of the treasury analysis on the costs of Brexit. I was a bit disappointed not to see more breakdown of projected trade/gdp etc, so I could give it a bit of analytical review.

1. I was surprised to discover that they seem to be precicting a fall in trade, not only with the EU, but also with the rest of the world, apparently due to losing the access to the EU Free Trade Agreements with other nations or trading blocs. Unfortunately, the respective declines were not quantified (as far as I could tell). This analysis seems to have been nodded through by the various independent financial experts paraded on TV, so presumably this is the general opinion of the economics profession. It seems odd that no one has explicitely pointed this out, as I believe most brexiteers are assuming growth in world trade, and it would undermine their case.

2, Apparently under WTO rules, you cannot have any favourable treatment with any particular countries or blocs, so if we wanted to trade with (say) the EU, we automatically became subject to their tariff of 10% on motor cars, and if we imposed an equivalent tariff, we would have to apply the same tariff to all WTO countries. I don't understand how this could ever work, unless the WTO countries all have identical tariffs (are effectively a bloc temselves) and never trade with other blocs.

3. Just to mention, that immigration is projected as identical under all 3 scenarios. I don't know what economic impact it has.

Any enlightenment welcome. Ta

(Just to mention, the financial impact is irrelevant to my opinion on brexit, I am just interested in numbery stuff)

edit, oh just noticed the "is osbourne just digging.." thread. i could have posted there. feel free to merge if you want.

well china has a 266% tariff on foreign steel, and they produce(and import) all their gold, and don't sell back into the open market.

makes the EU 8%(soon to be 15%) look rather tame.

EU frankly doesn't have a clue when it comes to protectionism.

they don't realise that while they hate and are jealous of the US, the chinese are WAY more ruthless in business.

if you've ever seen them in action in a casino, you will have notice 2 things

1) they are born gamblers/speculators

2) they will rinse every last drop out of a session, they NEVER let go until the competition has been punished at the poker table.

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well china has a 266% tariff on foreign steel, and they produce(and import) all their gold, and don't sell back into the open market.

makes the EU 8%(soon to be 15%) look rather tame.

EU frankly doesn't have a clue when it comes to protectionism.

they don't realise that while they hate and are jealous of the US, the chinese are WAY more ruthless in business.

if you've ever seen them in action in a casino, you will have notice 2 things

1) they are born gamblers/speculators

2) they will rinse every last drop out of a session, they NEVER let go until the competition has been punished at the poker table.

..thought Cameron signed a Trade deal recently with China...in which case I am sure the Chinese will not mind us charging them a 266% tariff on their steel...who advises this Government on arithmetic and common sense....whoever ..they are way of the mark and should be sacked .. :rolleyes:

Edited by South Lorne

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I'm not sure the OP is correct. You can have a free trade deal with whoever you want. Within that, it's negotiable . . . tariffs, quotas. That is clearly evidenced by the 'no trade' deal the EU made with Ukraine. I don't agree that the EU is hopeless about protectionism either. Any deal with the EU always forces a country to shut out other trading partners.

On the subject of autos, the UK is a very important market. A tariff barrier would actually force some manufacturers to at least assemble kits here. Or we can insist on x percent of locally produced content, as many countries used to do to protect local industry.

A rather bigger question for me is how the EU will manage. We are one of only four net contributors. I think they'll feel the pinch.

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.........A rather bigger question for me is how the EU will manage. We are one of only four net contributors. I think they'll feel the pinch.

...that is the reason for all the German & French (to name two) panic .....and Cameron the failed negotiator sides with the Euro people who have made a fool out of him ....and he sides with Corbyn ....very difficult to understand this man.....and certainly anyone who votes to stay is following the wrong gang IMHO..... :rolleyes:

Edited by South Lorne

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...that is the reason for all the German & French (to name two) panic .....and Cameron the failed negotiator sides with the Euro people who have made a fool out of him ....and he sides with Corbyn ....very difficult to understand this man.....and certainly anyone who votes to stay is following the wrong gang IMHO..... :rolleyes:

If they were that panicked getting a decent deal should've been easy (or they realised what a pushover Cameron was despite their panic).

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If they were that panicked getting a decent deal should've been easy (or they realised what a pushover Cameron was despite their panic).

...ahh...but one panicked group deceives the other ...and Cameron is trying to deceive the British people also.....does anyone know what deal he has agreed ...no...because there isn't a deal which will hold ...just frothy promises ...little straws for Cameron to grab....before he sinks... :rolleyes:

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A rather bigger question for me is how the EU will manage. We are one of only four net contributors. I think they'll feel the pinch.

Good point, if the whole thing falls apart then everything is up for grabs

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