by Suff » 23 Feb 2017, 10:31
I’m also getting heartily sick of hearing about a “better deal” outside the EU than in the EU.
I know these politicians are clueless in the EU but it stands like this. We already do 56% (including goods shipped through Rotterdam to the rest of the world), of our exports outside the EU. We are not in the Euro, not in Schengen, only partially participate in the Schengen police information sharing deal.
We don’t make use of the exchange rate mechanisms and the trade barriers put up by the EU to the rest of the world are more of a hindrance to the UK than anything else.
Yes we would like to trade our goods to the EU without barriers but there is one interesting dynamic that I never see discussed.
After more than 20 years traipsing around the EU I’ve found one thing to be true. Nobody in the EU lusts after our goods. Services, yes, but not goods. People in the EU tend to support their own products then lust after German, French, Italian or Spanish produce. The UK? Ask a European which UK goods they really want to buy and they will look at you rather oddly and say “what you actually produce goods?”.
So where do these billions in trade, that we do with the EU, come from? Pretty much essentials. Things they can’t get either cheaper, or at all, elsewhere in the world, forget just the EU. The EU does not see the UK as a place they buy from, only a place they sell to.
In terms of a trade war, or trade intransigence, the EU has a hell of a lot more to lose. Faced with 35% on top of a BMW, is the customer going to be brand loyal (as the Germans fanatically are), or are they going to buy a Lexus or a Jag or a EU style Chevy brought over from the US? This is the same for Irons, washing machines, fridges and freezers. LG, Samsung and a host of other Asian manufacturers make these too. If they are going to cost less outside the EU and the EU goods cost more, then we’ll buy the cheaper ones. LG and Samsung are generating a much improved brand in white goods.
My take is that the biggest thing we need to fear, in Brexit terms, is fear itself. Because that will drive us to a terrible deal and a worse life.
We made the decision to go out in the world and be our “own man”. So be brave and get on with it.
The UK can be significantly better off outside the EU and we only need a small fraction of the access that the EU currently affords to day in order for our country to continue without negative impact. The rest of the EU, on the other hand, needs much deeper access to the UK and the funds that the UK supplies or they will see a very great negative impact.
Banking is one separate case in point. But it’s 12% of our economy and it won’t just fold up overnight. It might even morph into something much greater and better, the roots are already there and the EU will only be some $13tn of a $77tn global economy, once we have left. If the EU want to shut themselves off from the UK banking services, then that would probably hurt them more than it will hurt us. Only time will tell. But perhaps this is a chance to, finally, reform our banking industry??
There are 10 types of people in the world:
Those who understand Binary and those who do not.