UK Politics: Unboldy Go There Where No Country Has Gone Before

[mormont]

1 hour ago, SeanF said:

But, it would provide a business opportunity for those wishing to produce such goods and services.

No, it wouldn't. Or at least, it could only do so where, as I said, the UK economy actually has the capacity to produce them. And that is a very limited range of instances.

Modern consumer goods - cars, computers, washing machines - and industrial manufacturing - aircraft, generators, large machinery - isn't done in one location. It's done by manufacturing part A in one place and part B in another and assembling them at location C. This allows a high degree of specialisation and efficiency but it relies on there being smooth import and export of all those bits across borders, since no one country's economy can really specialise in all of the necessary areas to do the whole thing in one country. (Except perhaps countries as large and diverse as the US and China.)

We can't just develop the capacity to do that because it would be convenient for Leavers if we could. It's not viable. We don't have the expertise, the factories, the infrastructure - and if we did, why would large companies want to shift several other bits of the manufacturing process to the UK instead of moving (in most cases) one bit to the EU?

That would only make sense if it were cheaper to do it in the UK, but as noted, moving to the UK for these companies would be massively expensive in terms of developing the capacity. So it would only make sense if the UK were massively cheaper in terms of running costs, ie were offering huge subsidies, significantly lower wages, etc.

Even to hold onto the bits we make now will require subsidies and lower wages to compensate for the increased costs of import and export to the EU.

So no. No such opportunity exists, in most cases. It's a pipe dream.

ETA -  you'll notice I don't discuss services, and this is because even now, the UK government and the EU haven't begun to discuss services. And they probably won't, in any significant way, until 2021. So who the fuck knows what's going to happen there.

 

[Rippounet]

49 minutes ago, Heartofice said:

Do you have any actually have any examples over the last 10-15 years of Western European state’s ( let’s stick to countries with a decent economy yeah) where immigration has been ‘a trickle’.

Maybe the problem is defining a "trickle." In my eyes, figures under 1% (of population per year) are just that. And whatever figures you use, France's immigration numbers are waaay under that.

As for how that was done, that could take time, and be off-topic. Let's just start by re-affirming that ensuring the full application of The Free Movement of Persons Directive 2004/38 EC goes a long way toward controling immigration from EU countries, provided you have a worker registration system.
According to the information I have, the UK never implemented such a system, and May even abolished ID cards as home secretary.
Just to be clear: if you don't have a worker registration system you cannot verify that people who immigrated to the UK are in fact self-sufficient and ask them to leave if they are not.
If you don't have a worker registration system, you are not trying to control immigration.

Generally speaking, a bit of digging reveals information about how immigration is controled by the EU exactly. You'll find a number of directives with numbers (for instance, Directive (EU) 2016/801 or 2003/109/EC (amended in 2011)).
The fun fact about directives is that they are... directives, not laws. So the UK always had leeway to control immigration, it just never really tried.
And now that "Brexit" is happening, it will. Of course, the "official" narrative will be that the EU was preventing that.
The truth will be that it never was.

[Platypus Rex]

10 hours ago, DaveSumm said:

Improvement can only be measured against where it would have been had we stayed, which is a murky question at best.

Yes, I understand.  You can make all the dire predictions you want, but nothing is falsifiable.  You can imagine no future circumstances that would prove your dire forecasts wrong.

[A wilding]

I suppose an analogy might be made between Brexit and the impact of climate change. It is difficult to impossible to show that any single event is caused by climate change, and to this day some people are still asserting that humans are not responsible for it, or that those people who believe in it are just scaremongers with an agenda, or that the effects will never be significant, etc.

Though personally I shall be very relieved if it is still possible to claim with a straight face that Brexit has had no significant negative impact in, say, three years time.

As as said before though, how the goalposts have moved! We have gone from Brexit being "a glorious future of freedom for the UK in which we will be much better off and other countries will be queueing up to make deals with us", to "there will be no absolute proof that we are worse off".

[OldGimletEye]

16 minutes ago, A wilding said:

 some people are still asserting that humans are not responsible for it, or that those people who believe in it are just scaremongers with an agenda, or that the effects will never be significant, etc.

Some people are morons.

[Darryk]

Why so much negativity here? Does Boris Johnson really strike you as the type of person who would take such a significant step without having a solid plan?

[A Horse Named Stranger]

8 hours ago, mormont said:

Even to hold onto the bits we make now will require subsidies and lower wages to compensate for the increased costs of import and export to the EU.

The costs are one thing.

 

8 hours ago, mormont said:

This allows a high degree of specialisation and efficiency but it relies on there being smooth import and export of all those bits across borders,

That's the key bit. Particularly true when you think about aviation and car manufacturing.

It's the Just-In-Time (JIT) production model. So there's very limited capacities to store parts at Location C. At some point if the delivery from point A or point B doesn't arrive at point C in time, production will shut down as in "We are out of part A (or B or Z for all that matters).

Of course in reality things are way more complicated, that part a consists of subparts a1 to a5 and those parts get moved around quite.

The other fun part is the paper work hitting those companies.

[kiko]

1 hour ago, Darryk said:

Why so much negativity here? Does Boris Johnson really strike you as the type of person who would take such a significant step without having a solid plan?

You think he had  a condom on when he drove his bus into the electorate? I hear there are a lot of Boris busses driving around.

[The Anti-Targ]

16 hours ago, SeanF said:

But, it would provide a business opportunity for those wishing to produce such goods and services. IMHO, the Single Market proved a good deal more beneficial for people wanting to sell into this country, than to people wanting to export from this country.  The UK's trading performance with countries that are not part of the Single Market (where we have a trade surplus overall) is a good deal better.

The thing is, in a group of countries that are roughly equal the free market will determine where and how goods and services are most efficiently produced / provided. If it was more efficient to produce something in the UK for the domestic market, then that thing would have been produced in the UK because it would have out-competed imports on price.

You had a trade surplus with the rest of the world because there wasn't all that much you needed from the rest of the world that couldn't be more cheaply obtained from within the EU. Especially with tariffs and quotas on goods coming from outside the EU, but no tariffs at all on intra-EU trade. It's incorrect to just look at trade deficit with the Eu and trade surplus with the rest of the world and conclude that being in the EU is bad from a trade perspective. Also consider the fact that the EU negotiated a lot of trade agreements from which the UK export trade significantly benefits and some of these benefits are now lost to the UK.

Companies that sell their goods all across Europe (and the world) are not going to suddenly build a factory in the UK to service the UK market. Instead of talking hypothetically let's look at examples of goods that could start to be produced in the UK where before they were mostly imported from other EU member states?

The UKs biggest source of imports is Germany, these are the top 10 categories of products that the UK imports from Germany:

Quote

1. Vehicles, Except Railway Or Tramway, And Parts Etc
2. Nuclear Reactors, Boilers, Machinery Etc.; Parts
3. Electric Machinery Etc; Sound Equip; Tv Equip; Pts
4. Pharmaceutical Products
5. Plastics And Articles Thereof
6. Optic, Photo Etc, Medic Or Surgical Instruments Etc
7. Nat Etc Pearls, Prec Etc Stones, Pr Met Etc; Coin
8. Aircraft, Spacecraft, And Parts Thereof
9. Aluminum And Articles Thereof
10. Articles Of Iron Or Steel

Out of ~68Bn GBP of imports these 10 categories ~48Bn GBP. How much of that manufacturing do you realistically think will suddenly move into the UK?

And do you think the USA wants to do a trade deal with the UK so that it can import more from the UK? No, it wants to do a trade deal with the UK so that the UK can start importing industrial stuff from the USA rather than from Germany.

There is only really one way you are going to bring significant amounts of manufacturing into the UK: slash and burn employment and environmental conditions.

[OldGimletEye]

6 hours ago, The Anti-Targ said:

The thing is, in a group of countries that are roughly equal the free market will determine where and how goods and services are most efficiently produced / provided. If it was more efficient to produce something in the UK for the domestic market, then that thing would have been produced in the UK because it would have out-competed imports on price.

Okay just to make clear:

1. "Capacity" has little to do with the gains of trade or what gets traded. Suppose that a nation has a fixed supply of labor and its capital stock is mainly land. In short it has fixed capacity. What it ends up producing in open economy versus a closed economy is likely to be different and it has to due with the the relative opportunity cost of production.

2. You can have absolute advantage in everything and still realize gains from trade.

The gains from trade have to do with relative marginal cost. In short you produce those items where you have the lowest marginal cost and then trade those items for items, that if produced domestically, would have higher opportunity cost.

6 hours ago, The Anti-Targ said:

And do you think the USA wants to do a trade deal with the UK so that it can import more from the UK? No, it wants to do a trade deal with the UK so that the UK can start importing industrial stuff from the USA rather than from Germany.

Mostly comes from the crowd that doesn't understand that the reason why the US runs trade deficits is because the US acts like the world's banker and will probably continue to do so for quite a while.

6 hours ago, The Anti-Targ said:

There is only really one way you are going to bring significant amounts of manufacturing into the UK: slash and burn employment and environmental conditions.

From what I understand most of the damage done to UK manufacturing industry happened as a result of the China shock, not the EU.  So I think blaming the EU for the loss of manufacturing jobs misses the mark.Similar results have played out in the US and other countries, often having similar political effects.

The issue here isn't to bring back manufacturing, except maybe those few industries considered vital to national security, but to recognize that there isn't one homogeneous labor market, but many different types of labor markets.  The Econ 101 partial equilibrium model of labor is one of the dumbest econ models ever and I wish it would go away in economic text books. One doesn't just casually switch from being a plumber to a nurse. There are barriers to entry, usually in the form of education and training. Also add geographical frictions. Its been well known that trade policy can have distributional effects. Frictions in the labor market make them worse. Not realizing how labor markets function in reality was one of the biggest screw ups of globalist. 

[SeanF]

8 hours ago, The Anti-Targ said:

The thing is, in a group of countries that are roughly equal the free market will determine where and how goods and services are most efficiently produced / provided. If it was more efficient to produce something in the UK for the domestic market, then that thing would have been produced in the UK because it would have out-competed imports on price.

You had a trade surplus with the rest of the world because there wasn't all that much you needed from the rest of the world that couldn't be more cheaply obtained from within the EU. Especially with tariffs and quotas on goods coming from outside the EU, but no tariffs at all on intra-EU trade. It's incorrect to just look at trade deficit with the Eu and trade surplus with the rest of the world and conclude that being in the EU is bad from a trade perspective. Also consider the fact that the EU negotiated a lot of trade agreements from which the UK export trade significantly benefits and some of these benefits are now lost to the UK.

Companies that sell their goods all across Europe (and the world) are not going to suddenly build a factory in the UK to service the UK market. Instead of talking hypothetically let's look at examples of goods that could start to be produced in the UK where before they were mostly imported from other EU member states?

The UKs biggest source of imports is Germany, these are the top 10 categories of products that the UK imports from Germany:

Out of ~68Bn GBP of imports these 10 categories ~48Bn GBP. How much of that manufacturing do you realistically think will suddenly move into the UK?

And do you think the USA wants to do a trade deal with the UK so that it can import more from the UK? No, it wants to do a trade deal with the UK so that the UK can start importing industrial stuff from the USA rather than from Germany.

There is only really one way you are going to bring significant amounts of manufacturing into the UK: slash and burn employment and environmental conditions.

I don't think the US is expecting much in the way of boosting manufacturing exports to the UK.  I think it's more  about exposing the UK to US agriculture.  It's why I do not actually expect there to be a trade deal with the US, given our attitude towards animal welfare, or if there is, it will be very limited.

The question is not whether changes happen overnight, but over time.  No one is expecting the UK economy to fall off a cliff as a result of leaving the EU.  The arguments are over whether GDP growth will be marginally lower than would otherwise have been the case, as a result.   Similarly, any increases in domestic production to replace imports would be gradual.

[Which Tyler]

1 hour ago, SeanF said:

I don't think the US is expecting much in the way of boosting manufacturing exports to the UK.  I think it's more  about exposing the UK to US agriculture.  It's why I do not actually expect there to be a trade deal with the US, given our attitude towards animal welfare, or if there is, it will be very limited.

And price gouging for pharmaceutical companies, along with unconscionable increase in patent lengths.

[OldGimletEye]

1 hour ago, Which Tyler said:

And price gouging for pharmaceutical companies, along with unconscionable increase in patent lengths.

Yes, its important to keep in mind that some stuff that is touted as "free trade", has nothing to do with reducing tariffs or quotas, and as such is baloney. In some cases, these agreements are about making non US citizens pay through the nose for patented products, as it's not enough to make US citizens pay through the nose for patented products evidently.

And of course the fact that patents exist makes the case for price controls as anybody who is remotely familiar with the theory of monopoly knows.

[A wilding]

30 minutes ago, OldGimletEye said:

Yes, its important to keep in mind that some stuff that is touted as "free trade", has nothing to do with reducing tariffs or quotas, and as such is baloney. In some cases, these agreements are about making non US citizens pay through the nose for patented products, as it's not enough to make US citizens pay through the nose for patented products evidently.

And not forgetting the "free trade" ISDS corporate sovereignty stuff ...

[maarsen]

3 hours ago, OldGimletEye said:

Yes, its important to keep in mind that some stuff that is touted as "free trade", has nothing to do with reducing tariffs or quotas, and as such is baloney. In some cases, these agreements are about making non US citizens pay through the nose for patented products, as it's not enough to make US citizens pay through the nose for patented products evidently.

And of course the fact that patents exist makes the case for price controls as anybody who is remotely familiar with the theory of monopoly knows.

Correct me if I am wrong but is there not a clause in NAFTA that any free trade agreement a member signs with an outside party needs to be approved by the other 2 NAFTA members? The old version had such a clause put in at the insistence of the US  because they did not want Canada or Mexico signing other bilateral agreements and thus giving the EU or China access to the US market through a back door. If so this could put a real crimp in any plans BoJo has of signing any agreement with the US. 

[The Anti-Targ]

On 2/2/2020 at 8:31 AM, Darryk said:

Why so much negativity here? Does Boris Johnson really strike you as the type of person who would take such a significant step without having a solid plan?

I think the plan is to use this year to propagandise the notion that Brexit got done on 31 Jan 2020, and nothing bad happened. And then when Brexit actually happens on 31 Jan 2021, if anything bad happens the propaganda machine will get busy telling people that the bad thing isn't about Brexit, because that happened a year ago, this is just the  being mean.

 

[Alarich II]

On 2/1/2020 at 12:30 PM, mormont said:

No, it wouldn't. Or at least, it could only do so where, as I said, the UK economy actually has the capacity to produce them. And that is a very limited range of instances.

Anecdotal evidence to support this:

I have a client who invents, builds and exports specialized sewer-robots. One of his bigger export markets is the UK. When we discussed the Brexit-impact on his business, he was pretty relaxed. He said that basically, the worst is the bureaucracy of the the transition but in the end his UK customers bought his robots because for the task at hand there is no viable alternative, so in case of tariffs his customers are just going to pay that on top of his normal price and the most likely way to compensate for these increased costs would be in cutting personnel costs, because his robots will save about 1/3 of the operative staff and instead of translating this into lower prices for consumers, it will be mainly used to compensate for increased costs of aquisition and maintenance of the machinery. We'll see how that till turn out.

[Derfel Cadarn]

Don’t know how accurate, but accordig to huff Post, Downing St is trying Trump-style press bannings. Everyobe walked out in protest.

https://m.huffingtonpost.co.uk/entry/no10-walkout-journalists-lee-cain-trump_uk_5e384359c5b6f262332d9603?guce_referrer=aHR0cHM6Ly90LmNvL1ZlQm85ZzFHNmE_YW1wPTE&guce_referrer_sig=AQAAAAuPYPYP7oxfkvDQDJT4Nd05GoTzRdfTk2FKd6WTR_1-tSCVZVh6txA6QL-Z4oD9w3iOy_YzLRr3A6ucDefKckezmSYUg1Lu-iVEZQ5rUfc2EHWtTRR3TqOMab6FWyympO5OM94cNTRbQlEUUEF6lq_i6K4f7HFOC9BqNtAvW9yr&guccounter=2

[Heartofice]

34 minutes ago, Derfel Cadarn said:

Don’t know how accurate, but accordig to huff Post, Downing St is trying Trump-style press bannings. Everyobe walked out in protest.

https://m.huffingtonpost.co.uk/entry/no10-walkout-journalists-lee-cain-trump_uk_5e384359c5b6f262332d9603?guce_referrer=aHR0cHM6Ly90LmNvL1ZlQm85ZzFHNmE_YW1wPTE&guce_referrer_sig=AQAAAAuPYPYP7oxfkvDQDJT4Nd05GoTzRdfTk2FKd6WTR_1-tSCVZVh6txA6QL-Z4oD9w3iOy_YzLRr3A6ucDefKckezmSYUg1Lu-iVEZQ5rUfc2EHWtTRR3TqOMab6FWyympO5OM94cNTRbQlEUUEF6lq_i6K4f7HFOC9BqNtAvW9yr&guccounter=2

Disturbing at face value but interesting that the smaller selected group of journalists wasn’t made up of publications that would be pro government. The Guardian got in seemingly.

[Which Tyler]

1 hour ago, Derfel Cadarn said:

Don’t know how accurate, but accordig to huff Post, Downing St is trying Trump-style press bannings. Everyobe walked out in protest.

https://m.huffingtonpost.co.uk/entry/no10-walkout-journalists-lee-cain-trump_uk_5e384359c5b6f262332d9603?guce_referrer=aHR0cHM6Ly90LmNvL1ZlQm85ZzFHNmE_YW1wPTE&guce_referrer_sig=AQAAAAuPYPYP7oxfkvDQDJT4Nd05GoTzRdfTk2FKd6WTR_1-tSCVZVh6txA6QL-Z4oD9w3iOy_YzLRr3A6ucDefKckezmSYUg1Lu-iVEZQ5rUfc2EHWtTRR3TqOMab6FWyympO5OM94cNTRbQlEUUEF6lq_i6K4f7HFOC9BqNtAvW9yr&guccounter=2

Confirmed by the independent

https://www.independent.co.uk/news/uk/politics/boris-johnson-brexit-news-journalists-walk-out-no-10-briefing-a9314996.html

ETA: and the mirror, guardian, BBC and presumably many others