Thread by @nicktolhurst

So this might confuse a few people...but as a remainer I confidently predict there'll be no "7 000 lorry parks in Kent" or "40km tailbacks" to enter the County's ports as suggested in the media.

Why am I so confident in this prediction?

Simple.
"Market forces".

A short thread.

1st point - "low margin exports"

Imagine you're a solid but low tech business. You have no "niche advantage" & compete on price & delivery. Your margin for exports is enough to make a profit but thats it. Higher delivery times, costs wipe this out.

Result?
You stop exporting.

2nd point - "animal/perishable exports/imports"

If there arent enough vets/checks on these sensitive goods EITHER SIDE of UK-EU border come 1st Jan then trade in these will decline thru cost & "time sensitive" factors.

Even if there are - the increased costs will reduce demand.

This is further increased by fact that Tariffs are highest on farming produce.

If there's no deal then things like UK lamb immediately become far more expensive for EUers - as lamb farming is low margin at the best of times the result will be to simply make exporting pointless.

3rd point - "single market supply chains"

Without boring people - exporting is more profitable if you dont just compete on price. Time, regulation, inertia all play a role.

As EU a large, diverse single market this encourages business to focus on a complete single market.

4th point . "Uncertainty avoidance"

As business dont know just how bad things will be come 1st Jan they will do several things:

1. Stock up prior to 1st Jan
2. Delay trade till situation clearer
3. Prioritise "important" trade over merely "useful"

5th point - "logistics"

UK hauliers simply now dont have access to EU after 1st Jan in enough numbers.
Can this be mitigated completely & fast?
No.

Even if theoretically possible - it would cost more than now.
It also create disincentive to trade with UK as it "europeanises".

6th point - "Business lobbies"

For various reasons large retailers & drug companies are strong politically in UK. These are also crucial & sensitive imports.

The govt will thus prioritise this trade.
Result?
Other industries aware of this will have less influence/access.

7th point - "Trade accelerator effect"

For many reasons, exports stimulate imports & vice versa.
Even for simple reasons like goods containers going to a country increases incentive/supply for use for export from the country.

Thus a decrease in one...feeds a decrease in other.

So what happens to UK?

On 1st Jan EU-UK trade hugely reduced but govt will prioritise 2 types of goods: food & medecine to be traded.

Anything else cost or time sentive will be delayed, cancelled, stocked up on.

Result:
Biggest trade decline outside of war/pandemic.

/ends