Silence Broken
Conventional wisdom says the UK will suffer more in the the event of No Deal.
I never accepted that bit of economic wisdom, noting in particular, Germany would get clobbered.
Silence is now broken.
The Telegraph reports No-deal Brexit nerves grip Wolfsburg, the German home town of Volkswagen
The German carmakers finally broke their silence on Brexit last month. In a rare joint statement with car industry lobby groups from across Europe, they warned that a No Deal Brexit would have “seismic” and “devastating” consequences for the sector.
A German study released earlier this year predicted that No Deal could put as many as 100,000 jobs at risk in Germany – and that Wolfsburg would be among the worst hit cities. Already reeling from the Dieselgate scandal, No Deal is the last thing VW needs.
“We absolutely need a deal with Britain,” Hartwig, Erb, Wolfsburg’s most powerful trade union leader, told the Telegraph.
“There are no winners from a No Deal Brexit. The European economy will be weakened, but “There are no winners from a No Deal Brexit. The European economy will be weakened, but the effects on the British economy will be even worse. Donald Trump is not going to save you.” Donald Trump is not going to save you.”
No Winners
I agree there will be no winners, at least short-term.
Long-term, the UK will be a huge winner.
Brexit Propaganda
But note that myth again: “effects on the British economy will be even worse.”
The second half of that statement, “Donald Trump is not going to save you” is certainly true.
But the myths linger. Those myths are in reality nothing but propaganda.
Trade War Battles
For starters, exporters always get hurt more in trade battles, always. If you understand that key point you come to the correct conclusion without looking further.
The same applies to US vs China trade wars. China is hurting more, but China has far more pain tolerance than the US. And of course, loosing less is not winning, no matter what Trump says.
The EU in general, and Germany in particular depend more on exports than the UK. That’s about all you need to understand, but pain and remedies go well beyond that.
UK vs EU Remedies
- The UK can lower corporate and personal taxes, which I believe it would do. Because of budget rules, the EU will mostly be stuck.
- WTO tariffs will be uniform, but a lower pound will mitigate the UK export damage.
In short, the “UK will get hurt worse” is nothing but purposeful scare tactic propaganda.
Food Scare Tactic
The Guardian comments How a No-Deal Brexit Threatens Your Weekly Food Shop.
UK reliance on EU food imports is a major risk if the country crashes out of the union. Walk into any British supermarket and you will be surrounded by European products, from Italian cheeses to French wines. Around 30% of all food consumed in the UK is imported from the EU, but for some foods, such as spinach and olives, the EU is practically the UK’s sole supplier.
With Boris Johnson claiming he will take Britain out of the EU by 31 October “do or die”, the UK’s reliance on EU food is a major risk. In the event of a no-deal Brexit, the UK would be obliged under World Trade Organization rules to impose average food import tariffs of 22% and conduct product inspections, leading to delays and shortening the shelf-life of products.
OK, 30% of UK food comes from the EU. There are other suppliers for most of that, but not some things like olives.
UK Obligations
The UK is not obliged under WTO rules to impose 22% tariffs on the EU. That is a purposeful Guardian lie. The UK can impose whatever tariff it wants, including zero, as long as it’s uniform.
And it can be one level for lamb or things that the UK produces, and another level for olives which it doesn’t.
Zero Tariff Plan
On March 13, well before the above scare mongering tactic, the Guardian reported UK Will Cut Most Tariffs to Zero in Event of No-Deal Brexit.
One thing the UK cannot do is apply higher tariffs on the EU than it does other countries, but it is well withing the UK’s right to set tariffs at whatever level it wants, not 22%.
It is on this basis that that some UK farmers are afraid of Brexit, but the advantage to the consumer of zero tariffs is obvious.
Lose-Lose
Regardless of which “who is hurt more” story you believe, No Deal Brexit will be a lose-lose proposition in the short run, with some countries clobbered.
The two countries clobbered the hardest are undoubtedly Ireland and Germany, the former estimated at 4% of GDP.
That’s one hell of a hit. It would be up to Ireland to put in border controls because Northern Ireland wouldn’t.
It is on this basis I expect a deal, but one never knows in a game of “Chicken”.
Brexit Irony
Meanwhile, I note Brexit Irony: EU Rejects Its Own Proposal.
The second irony in this setup is the “No Deal blockers” actually increased the odds of No Deal.
If Ireland comes on board, there will be a deal.
If not, expect a No Deal outcome with another extension until January 31.
Mike “Mish” Shedlock
I love my daily dose of Avidremainer. Today he asks a question he already know the answer for, but as usual, his facts are wrong. May I refer you to either the Guardian or the Project Fear website – their fallacies are much more superficially believable than your own.
After three years, I can honestly speak for the majority…..we’ve had more than enough of the remoaners and their media cronies. Sick to our stomachs of the sheer duplicity of it.
Mish I take issue with the idea that the UK will lose less than Germany or Ireland, the reason is simple — the interactions and the law of unintended consequences are too important to make such judgment. In the face of it, the UK will suffer the most in short term, on the bright side the UK was never part of the Euro — some of these issues go away.
However, it is far to soon to determine the long term cost if Brexit for the UK and for Europe. There is no doubt that in a hard Brexit the UK will not hand over 50 billion Euro — so that’s a win! But that’s not that much money over the “long term”. It all depends on what the UK does with this freedom? That’s the big unknown — the Brits have a tendency (I am one) to think they still have the Empire…they don’t.
The wonderful thing about the law of unintended consequences is that it swings both ways.
In fact at present, the evidence is that it is swinging against the EU, since all the nonsense about food shortages and lack of medicine has already been baked into the cake by anyone who truly believes it and even by many of us who don’t. We’ve got enough tins of beans in the house to keep a scout troop going for a year, my Mercedes is already up on blocks in the garage for the winter and I have no concerns about availability of spare parts for my Mazda. The fine citizens of Wolfsburg on the other hand have only a faint inkling that their Christmas bonus might be a P45.
Maybe, maybe not…hence the unintended consequences!
Oh dear, I feel so much sympathy for a large, unethical multinational corporation who cheated their customers…
And I changed my mind completely about Brexit too….
Thank you German Carmakers.
Thank you Avid Remainer.
Thank you European Union.
Thank you Corbyn.
I have finally seen the light and from now on, I will obey and comply and bow down to your commands.
Does Germany really sell that many cars in Britain? I know they’ll suffer, but it seems they’re exaggerating a bit.
The German auto industry is having problems, but it’s mainly because of increased competition. The quality gap has shrunk. I know 2 people who leased Mercedes who switched over to Kia. And they’ll never go back. They can get a 7 person SUV with more amenities for less than a 2 seater c class.
As far as the car industry goes the UK is a colony. There are no import substitutes The drop off in German car sales will be at the margin as a result of a 10% import tariff if there is no deal. Car sales in the UK have dropped off a cliff already, but this fall has multiple reasons.
???
Japan, South Korea, China, US, India.
I don’t believe Govt figures. I think we have been in recession for six months.
My comment was in response to your comment that there are no import substitutes. As to whether you’ve been in recession for 6 months I’m clueless. Australia hasn’t had a recession since 1993 according to official figures leaving me to conclude that its amazing what one can do with statistics.
Sorry I should have said no British owned import substitutes. All profits from our car industry go to France, Germany, Japan, India, America and Italy. If we impose 10% tariffs on imported cars then you can bet your bottom dollar that these foreign owners of our car assembly plants will raise their prices 10% to compensate for the tariff imposed on the cars they import. Lose-lose.
Are you saying that Japanese, American, Indian and South Korean vehicles are entering the UK/EU at the moment at tariffs of under 10%?
I think you are wrong to say no one prospers from a trade war, in the political time they do.
Trump is hammering China causing some production to return to the US at a time when we have excess production and need therefore to reduce supply. The Donald is exporting the recession.
For the UK we do not really care who builds our cars, if Japan and US displace the EU then that it surely a win for them. If the UK gets better access to US/Japanese markets then that is a win for the UK.
Germany’s economy is based on exports. They need PAYING customers — every business does, but especially true for an export economy. Selling goods for IOUs is a long road to self bankruptcy, unless those IOUs are paid within ~30 days (when one’s own suppliers expect to be paid).
Obviously there are some very wealthy people all around the EU, but as a more general statement the EU cannot afford to buy German cars even if they want to. Most of the EU lives paycheck to paycheck, and still “finances” a lot of their life. For a lot of the EU, financing means they borrow and then inflate the debt away — they do not pay ever.
There are more cash (and/or net 30 days) customers in the UK than in the rest of the EU. The percentage of paying customers for German exports is about to nose dive. And its not just car makers.
A similar lesson holds for China. For the last few decades, the US WAS the consumer of last resort. And we used to pay our bills (note the use of past tense). More recently, we have resorted to printing pesos and drachma instead of paying. Our politicians, central bankers and even some morons in the private sector are all laughing at China and suggesting we crank up the printing press and make more pesos and more drachma. If China never wants to get paid, too bad for them.
There is nothing wrong with a business increasing sales with a certain amount of financing, especially if a 3rd party takes the credit risk. But ALL businesses need paying customers in order to keep the lights on.
Germany is now (or will be as of 31-Oct) part of a shopping mall where customers do not expect to pay. Customers get angry when asked to pay.
The EU has no future with or without the UK — but without the UK the EU goes from a mix of consumers (some cash, some credit) to mostly “financing” consumers.
Metaphorically speaking, the EU will soon be a street lined with check cashing stores, pawn shops, lottery ticket sellers, and rent to own stores.
Far as I make out German car production is in decline already, and many markets are saturated. Maybe it just suits them to be able to blame Brexit. Either that or there was some deal where UK got production dumped on it, it’s only a small fraction of EU and developed country population, let alone global population. For that they are going to close down ?
If it’s good for the consumer, it’s good policy.
Tariffs are a tax on consumers.
Eliminating them is good policy no matter what any other county does or doesn’t do.
It also behooves to note that lower prices are not just good for consumers of final goods. They are at least as good, essential even, for consumers of intermediate goods. Who are generally referred to as producers.
Noone who is producing (nor consuming) anything, benefits from their input costs going up. The only ones who benefit from that, are those who are not producing, but rather setting themselves up to rent seek off of those who do. Leeches and parasites, IOW.
Exactly.
Mish: “Eliminating [ tariffs ] is good policy no matter what any other county does or doesn’t do.”
This is one period academic thinking (aka short sighted).
All else equal (that is a HUGE assumption), consumers are better off without tariffs and paying a lower price even if the other country is dumping product.
But that assumption breaks down if the consumer loses his / her job (and INCOME) when the other country is dumping.
You are better off if the other guy figures out a way to sell a good product for less. You are not better off when the other guy sells the same product at a loss to himself (putting both out of business long term).
Any argument about the costs of tariffs, that does not also include equal mention about the costs of lost income, is short sighted. Both costs are real, the question is which cost is less?
The USA has paid for decades with lost jobs and lost income. I agree with Mish that tariffs may not be the best solution, but ignoring the cost of decimated industries is definitely not a good solution.
Instead of whining about tariffs, lets hear some ideas of how to get US industry competitive again. Maybe our labor costs put us out of the running on cars (just example), but we can produce other items better than China and they should be willing to buy them.
Soybeans (or corn) at government determined prices is not free trade. USDA farm subsidies and farm loans and so on are a tax on US consumers (aka taxpayers). When we subsidize our own food costs, its us paying ourselves. When we subsidize China’s food costs with income we no longer have, its shooting ourselves in the foot.
“All else equal (that is a HUGE assumption), consumers are better off without tariffs and paying a lower price even if the other country is dumping product.
But that assumption breaks down if the consumer loses his / her job (and INCOME) when the other country is dumping.”
For one, “dumping”, is literally synonymous with “giving you stuff for, literally, free.” How is it even possible to abuse “getting valuable stuff for, literally, free”; into something negative, of all things…?????
If anyone loses their job due to trade, they do so because people in aggregate have now found a more efficient way of produce what used to take more effort. IOW, they no longer have to work as hard as before, in order to obtain the same stuff they used to have to work full time for. Leaving them with more time do do something else. Ergo, they now have THE SAME STUFF, PLUS whatever they can obtain on their newly freed up spare time. And, no matter how hard one tries to obfuscate things for political ends, THE SAME STUFF, PLUS Something, adds up to more than just the same stuff. And all for the same total effort. And more stuff for same effort, is just another way of saying one is better off.
All economic growth, is solely, 100%, due to improvements in efficiency. Efficiency of converting things of lower value, into things of higher value. No component of economic growth, is a function of arbitrarily drawn political borders. Efficiency is efficiency, regardless of whether some hack decided to draw a line on a map between nominal Manhattan, nominal Brooklyn, nominal Peoria and nominal Mexico.
In practice, the way lower tariffs, all else being equal, most obviously directly benefit a population, is that it reduces the cost of producing things there. Ensuring more things get produced there. It’s cheaper to produce cars if steel tariffs are lower. It’s cheaper to produce the chase scene in Bullit, if cars are cheaper. It’s cheaper to produce other high quality, popular movies, if Bullit lower your cost of talent, by convincing aspiring movie talent that a place able to produce Bullit, is the place they want to work as well. ETc., etc.
IOW, lower tariffs on primary goods, AND ON EVERY HIGHER LEVEL of intermediate goods, make it cheaper to produce the next higher level good.
And “the next higher level of good” is where far and away most value add happens. Anything below, is quickly commoditized. Hence add very little value. Hence support only low wages. Hence, you want to be the/a place where as much cutting edge stuff as possible happens. And that requires as low costs as possible, of every possible (and impossible) thing that just may serve as an input to some future innovation. If you are not such a place, you are simply forever stuck handpicking cotton for a commodity, i.e. near starvation wage.
“Dumping” means the goods are sold for less that what it costs to produce… not necessarily zero. Just because your college prof had a different definition or got off arguing pedantics doesn’t change this.
The rest of what you wrote seems to agree with my comment? I wrote: “Instead of whining about tariffs, lets hear some ideas of how to get US industry competitive again.” Isn’t that what you wrote?
“If the UK set tariffs at 0% across the board what possible incentive is there for any country/trading block to enter into an FTA agreement with the UK?”
Tariffs are a tax on consumers.
If other nations do detrimental stuff, do you follow?
The first nation that abolishes tariffs, regardless of what any other nation does would be a winner.
The first country to abolish tariffs without a quid pro quo would be crucified by the rest of the world dumping on the tariff free country. No tariffs in the UK’s case would mean the end of British agriculture and industry.
This is simply nonsense. Recommend brushing up on economic theory, starting with Bastiat.
Recommend you read up on economic history: Alexander Hamilton Friedrich List etc… Is it true that the British government put 300% tariffs on Indian exports under the Raj? I think it important to realise that whilst preaching free trade the British practised protectionism against India.
The competition for German automaker campaign funds should heat up very quickly.
“For the next time … could you leave 2banana’s comment undeleted for us all to see? I am saying this for 101st time – the censorship on this blog is hurting you”
Waggy ….
1.I have not deleted 2banana’s comment unless they accidentally got caught in a chain with yours
2. It’s my blog and I really do not give damn what you think.
3. I will continue to delete your asinine comments the moment I see them
How long I put up with 2banana is another matter, assuming they are not the same person.
Mish
All the talk about the EU is missing an important point. It’s not the future of the world. Elsewhere is and new tech is disrupting everything. Hundreds of thousands of people in banking – FORGET IT. It’s one of the first sectors to hit the automation/AI brick wall and new heads will be added outside Europe.
Low rates in the EU won’t help. Change is upon us irrespective of Brexit, no-deals or any other stuff.
HSBC – “We’ve known for years that we need to do something about our cost base, the largest component of which is people – now we are finally grasping the nettle.”
“There’s some very hard modelling going on. We are asking why we have so many people in Europe when we’ve got double-digit returns in parts of Asia.”
Caradoc, this is why I don’t get why people are so hung up about the EU. I don’t rate the EU. They’re a long way behind China and the US in terms of real power with an increasingly old and grey population. Which is why I imagine they’re desperately trying to strike FTA’s everywhere because a “rules ordered market” is their only way of staying relevant.
Demographics is destiny as they say.
so let s breed ourselves into destruction too ….yiiiihaaa !
Well there is a bit of a medium ground between Nigers 7 children per mother and Italy’s 1.3 kids. Thats a figure of around 2.1 which is roughly replacement rate. Either extreme is undesirable in my opinion.
Looking at Italy its obvious that without high migration they won’t be able to pay pensions and balance the budget in the future. Niger on the other hand is likely to become a breeding ground for religious extremists as poverty and starvation becomes even more problematic than it is today.
But back to the EU. The demographics of the EU mean that without massive inwards migration that the EU will no longer be able to compete technically or industrially with the US and China. The same fate awaits China, but China does have neighbours who are still growing.
despite some short term problems mankind and the planet in general would be better of with less specimen ….From 2bln to almost 8bln in ONE century is INSANE ! …Btw, do take into account unstoppable AI development…..
Some of the examples are completely besides the point. There is nothing to prevent the UK from importing spinach or olives from the EU after a no-Deal Brexit, or for that matter, (German) automobiles. There is also nothing to prevent exporters from selling into the British market. Especially for products that are entirely imported now, there is no reason not to have a zero percent tariff. For products where the UK wants/needs to protect its domestic products from being washed away by cheap foreign imports, it may levy tariffs (and under WTO rules, need to levy the same tariff for all similar imports). German car imports may become somewhat more expensive (depending on the import tariffs) and less competitive, but that is all. On the other hand, German cars may be sold for less to compensate any import tariffs.
I suspect that longer term, the exchange of services will be impacted more than commodities and manufactures.
Services will be more impacted, yes.
Some of the banks are very concerned, Citi etc.
It’s also where No Deal could really screwed-up.
Personnel transfer needed and around half EU companies using London banks could be cut-off.
Frankfurt doesn’t have enough office space nor depth of capital.
UK end has said existing arrangements can continue but Brussells has not reciprocated.
This is where a real mess can occur as should the UK follow No Deal protocol there will be extreme stress in the sector that will impact the EU. As is usually the case the UK has been pragmatic.
French have been touting for business to move there.
You are bang on regarding services. Our auto industry is exclusively foreign owned and in the UK because we are members of the EU.
Strangely:
Nissan global re-org and Sunderland not touched.
BMW considering the Honda site. Honda moved out due to costs of EV developments.
Jaguar opening new global distribution centre – 2029 – link to thebusinessdesk.com
Bentley, Rolls-Royce not moving out as British marque.
Let’s see see what happens. EU is about 5% of global population and shrinking whilst the other 95% is working to increase in wealth and grow with better demographics. Get the product right and it will sell especially if we help them develop and invest.
Really lastly, I’m seeing many more Hyundai EV and Tesla now.
I’m not seeing many VW EV at all. Substantial Hyundai on the roads I travel. If this is mirrored across the country VW better start competing as they have bet the house on EV going forward.
As general EV reliability us supposed to be higher than ICE the old VW reliability card they played will be eroded. It will come down to price (not good for VW) and range (where is there a VW advantage?).
Whomever improves battery technology will win. Korea is strong in that area.
“Korea is strong in that area”
And Japan is stronger still. Which is exactly why they collectively roll their eyes and bet on hydrogen, out of all crazy long shots, instead……
My guess is that US/Chinese EV’s will eventually dominate the market. I know that some weeks ago strong arguments were mounted for the continuing dominance of ICE cars — most of which I agree with, as its hard for me to see EV’s replacing ICE cars in the near future without the necessary infrastructure being deployed practically everywhere first. However when it is and the developed world becomes awash with cheap renewable energy, they will be a reality.
And regardless of whether I like Tesla or not, Tesla is going to give the US a leg up on its competitors.
…cheap renewable energy…hahahaha
your cheap mom! hahahahaha
Its a reality already where I live. Fact of the matter is that if you live in the right climate its very hard to beat the cheapness of solar farms.
Lastly, if there is an extension it’s likely there will be a ruckus in Brussells as it has been made clear there will be vetoes wherever the UK can use a veto – passing the budget being one example.
On top if that it has been suggested the UK Commissioner will be selected as a particularly awkward character that doesn’t give a monkey’s what people think of him.
God only knows where this leads but change is coming like it or not. Theres little pleasure in any of this and a period of substantial adjustment and stress awaits.
Strip it back to basics.
Everyone needs customers and the more enlightened want prosperous customers as they are able to buy more stuff.
Theres no shortage of sources of supply for stuff and right now every region of the planet is searching for customers.
The only reason the EU wants the UK in is as a customer. They’ve never really liked us, we never wanted the full integration malarkey and we just a convenient customer.
As a side note, Helena Morrissey is supposed to have her hat in the ring as next BoE governor. Pro-Brexit.
Well educated, capable and with a big stake in the future – lots of kids. Her Brexit support from early kn encouraged me to investigate it.
She fits so well for post-Brexit I guess the establishment will block her chance.
” If there was any fairness – you should be forced to live it in it instead of infecting more sane areas with your political foolishness.”
Asinine comment of the year – and obviously false too
I support reduced government and government spending. Trump ought to try it.
I am against public unions and have been all my life. Never once voted for a union candidate which makes 2banana a liar.
Trump did nothing on that score. Nor did he propose bankruptcy reform which easily would have passed.
For that, 2banana exposes his anti-Mish bias to the nth degree.
He is clearly a delusional “Trump can do no wrong kind of idiot” hiding behind a TDS accusing mask.
And on top of it, he proposes a policy that amounts to once you are born in a blue state you cannot leave it.
2banana you are really pathetic.
Thanks for exposing yourself
I believe this replay belonged on the “leaving Illinois” thread.
here on purpose to make sure he sees it
Copying to all new threads until I am sure he does
The UK is already part of the WTO.
It just does not have a lot of its own trade deals, and can’t right now, because it ceded 100% control to the EU.
But it can set its own tariffs and do so to its advantage.
I propose 0% across the board.
UK consumers would be a huge winner.
If the UK set tariffs at 0% across the board what possible incentive is there for any country/trading block to enter into an FTA agreement with the UK?
If we have the right products there’s much less need.
Dyson has traded with the EU on WTO for years out of Malaysia, very successfully.
Typically the EU places more emphasis on producer interests than consumers – take oranges as just one example for Spain.
From th UK Food & Drink Federation.
“• We can surely design a better system of agricultural support than CAP.
• The UK is a significant economic player and many countries will want to strike trade deals with us.
• Many EU businesses sell to the UK and will want that to continue unhindered.
• Business people are resilient and adaptable and will always make the best of prevailing circumstances.
• Brexit has brought the UK food chain closer together and raised its profile.”
Mish suggests 0% tariffs across the board. What do you think the consequences are? Do you know anything about Trade deals and the WTO? You are the most fact free zone in the universe.
In a true free trade world all tariffs should be zero.
Some sectors will shrink/die and others grow.
Raw materials input costs to manufacture can fall and if a manufacturer designs a compelling product it will find a market irrespective so long as it meets the relevant standards.
The future will be competing against India and China not the EU and if we want to help developing economies we should encourage their trade with us – which would be commodities. Not protect uncompetitive sectors. Free trade with Africa, where they meet the standards, will do more to help them than hand outs will.
We have to wait and see what comes out of the chute.
Tariffs to protect uncompetitive sectors are a very blunt tool to be used carefully.
Fact free zone, welcome back. If we give everybody 0% tariffs then they take us to the cleaners because we will still have to deal with their tariffs. Do you get it yet?
If you have a non-commoditised end product with a USP it will sell. Reducing input material costs also helps reduce manufacture costs to counter tariffs.
Consumers also save with low tariffs.
If the UK can’t compete then we put tariffs in place and recycle the income to UK consumers and PLCs to partly compensate. It’s no different to what Japan did post WW2 and some would argue we need to do that to get UK manufacture up off its knees.
I dont profess to know how this will play out, but it will.
The consequences of no tariffs is that UK consumers, AND UK producers, have access to cheaper goods than anyone else. Making them more competitive.
And also that UK producers can redirect resources otherwise spent on negative-value-add lobbying, positioning and other purely value-destroying legal and regulatory maneuvering to exploit arbitrary tariffs, in a more productive direction. Again, boosting competitiveness.
IOW, the result will be access to cheaper goods and services for the UKs current and budding productive people; as well as fewer deadweight leeches acting as boat anchors around the ankles of said productives. And that’s about it as far as consequences go.
Australia trades with an average tariff of 1.2% so the question might be, why does anyone want an FTA with Australia? Well there are other ways (failed customs checks/consumer health concerns etc) for keeping a rival countries products out of your market.
If the UK left the European Union without a deal, it would automatically fall back on World Trade Organization (WTO) rules. I believe that implies “third” country in the absence of another deal. Seems to have nothing to do with Argentina and etc. all collectively having to agree to something.
It’s important to remember that, under the WTO’s “most favoured nation” rules, the UK couldn’t just lower tariffs for the EU, or any specific country, unless it had agreed a trade deal. It has to treat every WTO member around the world with which it does not have a trade deal in the same way.
Not much unique in foodstuffs.
Protected Designation of Origin (PDO) can only be sourced from the legitimate location (proper Parmesan cheese etc) but there are alternatives to nearly everything else and it can be a help to developing countries.
There is also a very serious uptick in vertical farming developments in the UK right now. Irrespective if Brexit some food chains will change in the next 3-5 sponsored by large supermarket chains. The idea is to cut food miles and have more control of supply locally.
Until all WTO members agree to this country’s Tariff schedules then the UK will be a third country to all other WTO members and WTO mandated schedules will be applied to the UK. This will continue until the UK either gains an agreement from every member or signs an FTA.
Just a small point….although olives predominantly come from Spain, Italy, and Greece, there are a multitude of other countries in Mediterranean and Middle East countries that produce olives and olive oil.
It is my understanding that until Argentina, Russia, Australia,New Zealand etc… remove their objections to the UK’s WTO schedules the UK will be treated as a third country by all members of the WTO. Is this interpretation incorrect?
I believe, as a signatory to EU deals such deals can be transposed in the interim to the UK that has an independent seat at the WTO.
I stand to be corrected on that but it’s my current understanding.
All treaties cease if it is no deal. All rollovers depend on the outcome of UK-EU talks.
These are not treaties.
Yes they are.
If you say so, wait and see. UK has independent WTO seat it kept open and co-signatory. At the very least they form the basis of new arrangements.
Interesting times.
I assume you are referring to EU trade agreements. If you bother to look at one you will discover that most – if not all – are ‘mixed agreements’ and that the UK is a signatory in her own right. That is because such agreements cover areas which are competences of the Nation States within EU Law. Thus such agreements do not cease if there is ‘no deal’ because the UK is specifically a party to those agreements as is the EU itself.
I think Australia has a continuity deal which will kick in on the 1st Nov, but the Australian and New Zealand governments are trying to fast track FTA’s with the UK. Probably the case with Argentina and Russia too.
Oh dear, no they are signed by the EU on behalf of all members.
Thanks – Fixed
Re: “The UK is not obliged under WTO rules to impose 22% tariffs on the UK.”
Based on the subsequent discussion, I believe that the second UK should be EU.