One of the strangest - & yet oft uncontested - arguments that brexiters make in favour of UKs power over EU is our trade deficit with EU.
But the argument that UKs trade deficit is so big we can dictate to the EU collapses as soon as you seriously examine it.
A thread.
But the argument that UKs trade deficit is so big we can dictate to the EU collapses as soon as you seriously examine it.
A thread.
2/
Firstly imports are financed by money UK can spend as a function of money it earns/flows from elsewhere. It’s a measure of quality of life.
Thats why it’s curious why people seem to want to risk this.
Secondly many of the imports are impossible or very costly to substitute.
Firstly imports are financed by money UK can spend as a function of money it earns/flows from elsewhere. It’s a measure of quality of life.
Thats why it’s curious why people seem to want to risk this.
Secondly many of the imports are impossible or very costly to substitute.
3/
What does the UK import from EU?
High quality cars
Food/wine
Precious metals/gems
Industrial equipment
Medical equip
Medicines
Many of these are essentially impossible/costly to substitute for home made products.
But even those that are, like cars...
What does the UK import from EU?
High quality cars
Food/wine
Precious metals/gems
Industrial equipment
Medical equip
Medicines
Many of these are essentially impossible/costly to substitute for home made products.
But even those that are, like cars...
4/
UK may make cars but it is one of the most intrinsically interlinked on supply chain basis within the EU.
Are (European & Japanese) car makers in UK really going to turn their backs on 50 years of integration to make 100% “British cars for British people” again?
In fact...
UK may make cars but it is one of the most intrinsically interlinked on supply chain basis within the EU.
Are (European & Japanese) car makers in UK really going to turn their backs on 50 years of integration to make 100% “British cars for British people” again?
In fact...
5/
In fact since the referendum, car companies are mostly disinvesting from UK.
In other words it is possible that post Brexit the UK might end up purchasing more EU made cars relative to those made in UK than before - depending on trade deal.
In fact since the referendum, car companies are mostly disinvesting from UK.
In other words it is possible that post Brexit the UK might end up purchasing more EU made cars relative to those made in UK than before - depending on trade deal.
6/
In food terms are we really going to be eating Welsh tomatoes or Wiltshire oranges?
UK imports £2billion+ of red wine from EU - are we really going to give this up or drink red wine from the Pennines?
In fact recent data shows companies stockpiling - it’s increased imports!
In food terms are we really going to be eating Welsh tomatoes or Wiltshire oranges?
UK imports £2billion+ of red wine from EU - are we really going to give this up or drink red wine from the Pennines?
In fact recent data shows companies stockpiling - it’s increased imports!
7/
Germany’s (oft overlooked) key export is not cars but industrial/machine tools.
The you need for industry or infrastructure like HS2.
Are we really going to deindustrialise to spite the Germans?
Much of this simply isn’t made in UK - you can’t instantly magic these up.
Germany’s (oft overlooked) key export is not cars but industrial/machine tools.
The you need for industry or infrastructure like HS2.
Are we really going to deindustrialise to spite the Germans?
Much of this simply isn’t made in UK - you can’t instantly magic these up.
8/
If you follow German media their greatest worry about Brexit is not any competition from suddenly sprouting UK machine tools industry - but that UK will simply get poorer so will buy less imports.
What kind of negotiating tactic is it to threaten...to impoverish yourself?
If you follow German media their greatest worry about Brexit is not any competition from suddenly sprouting UK machine tools industry - but that UK will simply get poorer so will buy less imports.
What kind of negotiating tactic is it to threaten...to impoverish yourself?
9/
Now think about how we pay for imports. Through selling services in the worlds only (not even US!) continental internal market in services (if not quite complete yet).
...which we’re about to leave.
Now think about how we pay for imports. Through selling services in the worlds only (not even US!) continental internal market in services (if not quite complete yet).
...which we’re about to leave.
10/
Tourism, business travel etc also a massive earner..
....which continental freedom of movement makes easier....
But it’s not all grim news - there are some imports that we can substitute...
Tourism, business travel etc also a massive earner..
....which continental freedom of movement makes easier....
But it’s not all grim news - there are some imports that we can substitute...
11/
The lower technology/skill of a product the easier to start.
Also farm goods suited to UKs climate easier to substitute.
So if you’re looking to expand into cheap simple goods or cabbages.
Brexit might just be your thing.
I’ll drink to your success with a primitivo.
/Ends
The lower technology/skill of a product the easier to start.
Also farm goods suited to UKs climate easier to substitute.
So if you’re looking to expand into cheap simple goods or cabbages.
Brexit might just be your thing.
I’ll drink to your success with a primitivo.
/Ends
