UK to EU exports go from £235.6bn to £340bn

[papasmurf]

<puts head in hands>

If you really think that, it just illustrates how little you understand the issue

The upcoming 10% tariff that is causing the car makers to worry.....THAT IS THE WTO MFN TARIFF

Precisely.  No trade agreement with the EU, defaults to WTO. 

[BeElBeeBub]

We have a body that does all that, it comes without all the BS that the EU creates. It's called the WTO.

<puts head in hands>

If you really think that, it just illustrates how little you understand the issue

The upcoming 10% tariff that is causing the car makers to worry.....THAT IS THE WTO MFN TARIFF

The issue is (parts of) the waiver that UK car plants had as part of the TCA agreed are coming to an end.  This means that cars that contain less than 45% UK/EU parts will be traded under the hallowed WTO rules. The exact same rules and body you are proposing as an alternative to the TCA.

It's possible an extension to the waivers could be negotiated.  After all, it was pointed out EU carmakers would also have some benefits, but that would just be extending the deal you say was rubbish in the first place.

So we are in the situation where Brexiters are complaining that the deal that they voted for* is the wrong deal because it is defaulting back to the situation (WTO) that they claim they wanted.

*Claims "this isn't the brexit i voted for" are BS - in voting for the Johnson fronted Leave, you were implicitly voting for the brexit that Johnson would negotiate.  Doubly so if you voted for Johnson's Tory party in the last GE. 

[papasmurf]

Strange because 90% of the world is a member. I'd rather that than a corrupt cartel!!

Actually 98% are members, but that is not the same as 98% operating under WTO rules. Operating under WTO rules is very much a fall back position where no other trade agreements are in place.
Frankly with the USA having the whip hand with the WTO there is very little difference. Frankly anyone who thinks Britain should operate exclusively under WTO rules is very badly informed

[Nick]

Trading on WTO rules, a now dysfunctional organisation, the legacy of Trump, is a very bad idea.

Strange because 90% of the world is a member. I'd rather that than a corrupt cartel!!

[papasmurf]

We have a body that does all that, it comes without all the BS that the EU creates. It's called the WTO.

Trading on WTO rules, a now dysfunctional organisation, the legacy of Trump, is a very bad idea.

[Nick]

The Rules of Origin issue was well known, I raised it several times only to be told "PrOjEcT FeAr!!!!"

The basic issue is this:

Say the EU has tariffs of 15% on batterypacks being imported from outside the EU (eg China).
And say the UK decides with it's new brexit freedoms to slash batterypack tariffs to 0% from China.

So a car maker in the EU could make a car using a Chinese battery and they would have to pay 15% tariffs on the battery, but then so would any other car maker in the EU.  So it's a level playing field and an incentive for carmakers to find EU battery suppliers (or battery suppliers from countries who have specific deals with the EU)

But if the EU allowed UK car makers to import cars tariff free regardless of the % of components made in the UK (remember the RoO state at least 45% of the car must be UK or EU made to qualify) then those CN battery packs would effectively be entering the EU without tariffs.

This is exactly why they have RoOin the first place, and yes it will also cause issues for EU car makers, but for them it is a much smaller issue.

Any factory in the UK can build cars and sell them tariff free to a market with around 2 million new cars sold per year but will face tariffs to all other markets


Any factory in the EU can build cars and sell them tariff free to a market with around 12 million new cars sold per year but will face tariffs to all other markets

Added to that there are very few (relatively) UK car models produced so the consumer choice of "Domestic" cars in the UK will be considerably less than in the EU.

So sure, BMW, Fiat etc would love to be able to have less tariffs into the UK market, but it isn't the existential threat that it is to UK factories.

We have a body that does all that, it comes without all the BS that the EU creates. It's called the WTO. 

[BeElBeeBub]

But not apparently to those who voted leave.

Indeed.

"Who could have predicted <thing that Remain predicted>?!" they indignantly cry.

Swiftly followed by "Don't blame Brexit for that thing that was a predicted effect of brexit - it was dieselgate/Covid/Ukraine/a bigger boy who ran away"

[BeElBeeBub]

Oh there was a better one but we are stuck with the one we have got . Like maybe listening to percific industries as to their needs rather than lumping them all together under that same rules but Im sure they will eventually work it out but dont hold your breath

Worst case scenario is that Vauxhall will have to set up a Factory in the EU for that market and Mercedes ,BMW,Seat, Volvo,Fiat ,Citreon and Peugeot ect ect will have to do like wise in the UK

Hang on , Its a Brexit bonus !

The better deal was being in the single market/customs union (note not the EU).
There is a direct relationship between the freedom of access and the restrictions of action outside.

In short,  the more we diverge the greater the frictions.

We just have to pick where we wanted to be on that spectrum

The Brexit argument is that the problems are because we haven't diverged enough.

Yet the problems are stemming from the friction and diverging more would increase frictions.  There is no scenario where diverging more reduces frictions.

We could reduce the frictions by moving closer to the EU, but brexiters wouldn't countenance that.

Note that substantial damage to the UK car industry was predicted by Prof Midford, just about the only prominent economist to be pro brexit and widely quoted by brexiters

This is from 2012 when asked about the decline of the car industry

Questioning Vote Leave's economics expert Professor Patrick Minford, the then Tory MP Rory Stewart asked if he was talking about the "collapse of the entire UK car industry" and the "wiping out of the manufacturing industry".

Mr Minford replied: "It is perfectly true that if you remove protection of the sort that has been given particularly to the car industry and other manufacturing industries inside the protective wall, you will have a change in the situation facing that industry, and you are going to have to run it down.

"It will be in your interests to do it, just as in the same way we ran down the coal and steel industries.

"These things happen as evolution takes place in your economy. In the long run they are in your interest, but of course you have to deal with the compensation problems along the route."

You are are getting exactly the brexit you voted for (whether you knew it or not).

[papasmurf]

The Rules of Origin issue was well known, 

But not apparently to those who voted leave.

[BeElBeeBub]

Being tied to EU rules of origin is the issue not Brexit .Brexits happened its the deal that followed that created the problem . Is every problem going to be blamed on brexit because the authors of the deal didn't get it right ?  Even the Europeans are kicking off about not getting the parts for their cars and like Vauxhall want to source the parts from outside the EU and have tarriff free access to the UK

The Rules of Origin issue was well known, I raised it several times only to be told "PrOjEcT FeAr!!!!" 

....
Even getting FTAs isn't going to help much unless we manage to get the rules of origin changed and "diagonal cumulation" because most cars built in the UK don't contain enough UK parts to count for an FTA and we can't realistically build enough components competitively to make a car with enough UK content.

So far no Leaver has managed to explain how we overcome these details.  It's always "you have to believe" or "don't be pessimistic".
....

....
Note thatninnall cases the FTA is worse than SM membership and the absolute increase in trade frictions.  Also note the RoO will constrain UK automotive supplier choice significantly. Previously sourcing from Asia etc was a simple business decision. Now manufacturers will have to factor in RoO into the decision which may constrain choices.
....

The basic issue is this:

Say the EU has tariffs of 15% on batterypacks being imported from outside the EU (eg China).
And say the UK decides with it's new brexit freedoms to slash batterypack tariffs to 0% from China.

So a car maker in the EU could make a car using a Chinese battery and they would have to pay 15% tariffs on the battery, but then so would any other car maker in the EU.  So it's a level playing field and an incentive for carmakers to find EU battery suppliers (or battery suppliers from countries who have specific deals with the EU)

But if the EU allowed UK car makers to import cars tariff free regardless of the % of components made in the UK (remember the RoO state at least 45% of the car must be UK or EU made to qualify) then those CN battery packs would effectively be entering the EU without tariffs.

This is exactly why they have RoOin the first place, and yes it will also cause issues for EU car makers, but for them it is a much smaller issue.

Any factory in the UK can build cars and sell them tariff free to a market with around 2 million new cars sold per year but will face tariffs to all other markets


Any factory in the EU can build cars and sell them tariff free to a market with around 12 million new cars sold per year but will face tariffs to all other markets

Added to that there are very few (relatively) UK car models produced so the consumer choice of "Domestic" cars in the UK will be considerably less than in the EU. 

So sure, BMW, Fiat etc would love to be able to have less tariffs into the UK market, but it isn't the existential threat that it is to UK factories.

[Unlucky4Sum]

Being tied to EU rules of origin is the issue not Brexit .Brexits happened its the deal that followed that created the problem . Is every problem going to be blamed on brexit because the authors of the deal didn't get it right ?  Even the Europeans are kicking off about not getting the parts for their cars and like Vauxhall want to source the parts from outside the EU and have tarriff free access to the UK

Its all very well having a trade deal but on this matter it has been proven to not work in practice .

German carmakers lobby to maintain tariff-free access to UK | Financial Times (ft.com)


Oh there was a better one but we are stuck with the one we have got . Like maybe listening to percific industries as to their needs rather than lumping them all together under that same rules but Im sure they will eventually work it out but dont hold your breath

Worst case scenario is that Vauxhall will have to set up a Factory in the EU for that market and Mercedes ,BMW,Seat, Volvo,Fiat ,Citreon and Peugeot ect ect will have to do like wise in the UK

Hang on , Its a Brexit bonus !

And what was this 'better deal' you imagine we could have got?  And just how do you think 27 EU nations would have all backed it?

[Streetwalker]

And why is there a trade deal with the EU instead of the single market access.we used to have?.....

In the alternate universe where brexit never happened, Vauxhall would be facing zero tariffs on exports to the rest of the EU regardless of where the car parts were sourced from.

It is only facing business critical tariffs to the EU because the UK is no longer part of the SM/CU and we are no longer part of the SM/CU because of brexit

It.is.about as because of brexit as you can get

Being tied to EU rules of origin is the issue not Brexit .Brexits happened its the deal that followed that created the problem . Is every problem going to be blamed on brexit because the authors of the deal didn't get it right ?  Even the Europeans are kicking off about not getting the parts for their cars and like Vauxhall want to source the parts from outside the EU and have tarriff free access to the UK

Its all very well having a trade deal but on this matter it has been proven to not work in practice .

German carmakers lobby to maintain tariff-free access to UK | Financial Times (ft.com)

"Oh if we had negotiated a better deal this wouldn't be a problem" - there was no better deal.

We were never going to get the same deal as SM/CU membership without shouldering the obligations of membership. Anyone telling you that we would (cough Leave campaign cough) was lying

Oh there was a better one but we are stuck with the one we have got . Like maybe listening to percific industries as to their needs rather than lumping them all together under that same rules but Im sure they will eventually work it out but dont hold your breath 

Worst case scenario is that Vauxhall will have to set up a Factory in the EU for that market and Mercedes ,BMW,Seat, Volvo,Fiat ,Citreon and Peugeot ect ect will have to do like wise in the UK 

Hang on , Its a Brexit bonus !

[Nick]

Nick I have provided loads of data and information. Cornwall is now a basket case and a disaster, and getting worse by the day.

Please quote one of your posts showing any data, not your personal opinion. You won't. 

[papasmurf]

Absolutely false, and you can provide NO data to prove it.
For once actually back up something you say.
I know you're talking rubbish cause I was there a few years ago and disproved everything you said. 

Nick I have provided loads of data and information. Cornwall is now a basket case and a disaster, and getting worse by the day.

[Unlucky4Sum]

And why is there a trade deal with the EU instead of the single market access.we used to have?.....

In the alternate universe where brexit never happened, Vauxhall would be facing zero tariffs on exports to the rest of the EU regardless of where the car parts were sourced from.

It is only facing business critical tariffs to the EU because the UK is no longer part of the SM/CU and we are no longer part of the SM/CU because of brexit

It.is.about as because of brexit as you can get

"Oh if we had negotiated a better deal this wouldn't be a problem" - there was no better deal.

We were never going to get the same deal as SM/CU membership without shouldering the obligations of membership. Anyone telling you that we would (cough Leave campaign cough) was lying

Exactly