Brexit

[LuckyNumber7]

a lot of trade with these other markets is thru existing agreements with the EU - they would need to enter into a whole load of new individual agreements...

But what makes you think they somehow won't? The world is not mad at the UK. Only Europe has any reason to "punish" them, and that won't last long when the EU ends up needing fair deals with the UK as much as the UK needs fair deals with the eurozone.

 

[iron yuppie]

a lot of trade with these other markets is thru existing agreements with the EU - they would need to enter into a whole load of new individual agreements...

Are you sure of this? Within the EU I would see why this might be the case, but what incentive would the UK (or any other sovereign state) have to bind themselves to EU regulations when dealing with Singapore, for example?

 

[Popmartijn]

Are you sure of this? Within the EU I would see why this might be the case, but what incentive would the UK (or any other sovereign state) have to bind themselves to EU regulations when dealing with Singapore, for example?

For the outside states a deal with the EU means that it's valid for all the countries in the EU. So they only need to negotiate with one entity. And I believe the EU member states are not allowed to negotiate with those outside states separately. Because of the (huge) internal market you don't want to have one point (country) of entry to be different than another one. That would only lead to confusion and erosion of EU regulatory standards.

So, with the UK leaving the EU they are also leaving all the trade agreements the EU made with outside states. This means they'll have to negotiate new ones for themselves. Now, I'm not saying their own trade agreements will be far worse than the existing EU ones (because, although the UK can't offer access to the internal market of the EU, they're still a pretty big economy on their own). But a new trade agreement will take effort and time. And the UK's resources for these are limited, while many new agreements will have to be made.

 

[iron yuppie]

For the outside states a deal with the EU means that it's valid for all the countries in the EU. So they only need to negotiate with one entity. And I believe the EU member states are not allowed to negotiate with those outside states separately. Because of the (huge) internal market you don't want to have one point (country) of entry to be different than another one. That would only lead to confusion and erosion of EU regulatory standards.

So, with the UK leaving the EU they are also leaving all the trade agreements the EU made with outside states. This means they'll have to negotiate new ones for themselves. Now, I'm not saying their own trade agreements will be far worse than the existing EU ones (because, although the UK can't offer access to the internal market of the EU, they're still a pretty big economy on their own). But a new trade agreement will take effort and time. And the UK's resources for these are limited, while many new agreements will have to be made.

Thanks for the explanation. I guess I just can't imagine why an already developed country like Germany or the UK would want to restrict themselves in such a manner. If anything that is another reason to be wary of the EU's future, if a place like Germany might be hindered financially because Asian investors are seeing the entire EU as volatile.

Just to be clear: do those stipulations about trade also extend to financial matters like buying bonds etc? I imagine the UK must still have a bond market of its own in which it can buy and sell on the international market independent of EU regulations. Or at least I would hope.

 

[mama cass]

But what makes you think they somehow won't? The world is not mad at the UK. Only Europe has any reason to "punish" them, and that won't last long when the EU ends up needing fair deals with the UK as much as the UK needs fair deals with the eurozone.

like i said earlier, sure it's possible, as long as the UK has the time and specialists to spare to bang out the new agreements, while the economy continues to tank in the meantime - these things take years...

 

[mama cass]

Are you sure of this? Within the EU I would see why this might be the case, but what incentive would the UK (or any other sovereign state) have to bind themselves to EU regulations when dealing with Singapore, for example?

because a trade deal with the EU, which automatically opens up access to a market with 28 countries, is much more attractive and feasible than having to draw up multiple agreements with each individual country

 

[mama cass]

For the outside states a deal with the EU means that it's valid for all the countries in the EU. So they only need to negotiate with one entity. And I believe the EU member states are not allowed to negotiate with those outside states separately. Because of the (huge) internal market you don't want to have one point (country) of entry to be different than another one. That would only lead to confusion and erosion of EU regulatory standards.

So, with the UK leaving the EU they are also leaving all the trade agreements the EU made with outside states. This means they'll have to negotiate new ones for themselves. Now, I'm not saying their own trade agreements will be far worse than the existing EU ones (because, although the UK can't offer access to the internal market of the EU, they're still a pretty big economy on their own). But a new trade agreement will take effort and time. And the UK's resources for these are limited, while many new agreements will have to be made.

 

[LuckyNumber7]

like i said earlier, sure it's possible, as long as the UK has the time and specialists to spare to bang out the new agreements, while the economy continues to tank in the meantime - these things take years...

The economy is currently tanking due in large part from speculation. Don't forget, nothing has actually happened yet. These things do take years, and luckily the UK has precisely that. They've years to transition.

Though, I don't want to step away from the EU over Southeast Asia at the moment. The eurozone is still roughly half of the UKs trading. At the end of the day, I just don't see how the Brexit movement actually survives. It unexpectedly made it through, and has sent the economy plunging. Support won't continue if hard times follow, but opposition will arise. And, at the end of the day, it's difficult to see this playing out in any other way than the UK and the EU continuing to be partners.

 

[Popmartijn]

Thanks for the explanation. I guess I just can't imagine why an already developed country like Germany or the UK would want to restrict themselves in such a manner. If anything that is another reason to be wary of the EU's future, if a place like Germany might be hindered financially because Asian investors are seeing the entire EU as volatile.

In which way is this different from, say, California not making agreements on their own with other countries, but restrict themselves to the agreements made by the entire USA? Or Asian investors making financial decisions regarding the US as a whole while looking at developments in Florida?
Though I don't think many would like to see such a strong unification as the USA, the EU does want to act (and be seen) a bit like the United States Of Europe. It may not always succeed in that, but at the same time it does bring advantages due to its sheer size. (And smart investors will always take into account what's going on in an individual country instead of only considering the EU as a whole. And those investors have the most money.)

 

[Popmartijn]

The economy is currently tanking due in large part from speculation. Don't forget, nothing has actually happened yet. These things do take years, and luckily the UK has precisely that. They've years to transition.

Once the UK triggers Article 50 of the EU agreement (that deals in very generic terms with the situation that a country wants to leave the EU) they have 2 years to set up agreements to leave the EU. That's not a long time.

And, at the end of the day, it's difficult to see this playing out in any other way than the UK and the EU continuing to be partners.

I agree, they will remain to be partners. On what level, that we'll see in the coming years. Again typical of the Leave-campaign, they wanted out but they didn't have a plan what they'd want once they get out.

 

[DaveC]

Most people here are not Canadian and therefore probably not aware of the fact that Montreal was Canada's financial capital where nearly all financial services were concentrated in the 50s/60s/70s. Toronto was kind of like a provincial backwater. Then there was a lot of nationalist unrest in Quebec in the 1970s, threats of secession and so on. Well the banks had enough and basically uniformly relocated to Toronto in the late 70s/early 80s. There is now an enormous difference in how the cities have developed, where the wealth is concentrated, etc.

hence why i speak english at work and not french (most of the time, anyways).

 

[iron yuppie]

In which way is this different from, say, California not making agreements on their own with other countries, but restrict themselves to the agreements made by the entire USA? Or Asian investors making financial decisions regarding the US as a whole while looking at developments in Florida?

Well that's a good question, but I would say in the USA the interconnectivity of individual states and ties to the federal government are pretty strong, especially in terms of taxes, infrastructure, and many other federal services.

Seems to me most European countries still have a firm sense of national identity and governmental sovereignty so that culturally the level of resentment toward a country that isn't pulling its weight will be high. If BBC is to be believed there is a good deal of animosity from ordinary Germans toward Greece, for example, whereas in the US you don't often see someone from New York angry with Mississippi or Alabama for being economically underdeveloped.

 

[mama cass]

Don't forget, nothing has actually happened yet.

that's not actually true... there has already been an impact on business, British-based businesses missing out on tenders because they're now classed as a risk, news reports on companies mothballing production facilities in the UK, moving out to mainland Europe, the financial sector reporting job losses in the thousands and bids by mainland Europe to take on the City... uncertainty everywhere - the whole country is basically in limbo and is a risk, and people are planning for the worst-case scenario

on a more personal level, British citizens living in the EU who rely on UK earnings/pensions have instantly lost 17% of their day-to-day income - i have friends in that position and it's very real and happening

everything has been affected instantly - whether it's just due to the shock, limbo or what, and how long it will last, no-one knows... even in my line of work, a huge percentage of my work is for EU regulatory authorities, and instead of around 30 or so emails a day, things have suddenly gone very very quiet, and i'm getting maybe 5-10 work-related emails per day right now - i'm not sure if it's because of Brexit or just the summer holidays, but, whatever, it is a big immediate worry all round

according to Newsnight:

Universities take a knock post-Brexit - BBC News

"European academic bodies are pulling back from research collaboration with UK academics, amid post-Brexit uncertainty about the future of UK higher education.
While post-Brexit Britain might remain inside the European research funding system, academics in other countries are nervous about collaborating with UK institutions.
UK-based academics are being asked to withdraw their applications for future funding by European partners.
BBC Newsnight is aware of concerns raised by academics at Bristol, Oxford, Cambridge, Exeter and Durham.
Chris Husbands, the vice-chancellor at Sheffield Hallam, says that his researchers are already seeing significant effects.
He told Newsnight: "Since the referendum result, of the 12 projects that we have people working on for submission for an end-of-August deadline, on four of those projects researchers in other European countries have said that they no longer feel that the UK should be a partner because they don't have confidence in what the future is going to hold."

He added: "Leaving the EU doesn't necessarily mean being outside the European research network. Norway, Switzerland - they are part of the European research network [despite being out of the EU]. And it may be that there's where we end up.
"But it's not where we are now and in that uncertainty people are making decisions about what might happen - and like all people planning for the future, they're planning on a worst-case scenario."
Three other vice-chancellors, who have asked to remain anonymous, have confirmed similar problems for their researchers.
They also say they are fielding calls from prospective future EU students about their access to student loans and their immigration status.
They also report that staff members and prospective staff members have notified them of their decisions to seek work elsewhere in the EU.
At the moment, the UK and its universities remain full members of the EU. Jo Johnson, the science minister, has asked for academics to report any examples of British academics being discriminated against.
But academics in other countries are quite open that they are concerned about working with people who may become ineligible for future grants. Others have told Newsnight they fear the EU might not fund research in a country on the cusp of leaving the EU.
Stephan Koppe, an academic at University College Dublin, tweeted that he did not invite British academics to join with him recently, even before the referendum, because he feared the outcome.
The higher education sector was fiercely in favour of remaining in the EU.
Across the whole sector, more than 125,000 non-UK EU students are currently studying at UK universities, making up 5% of the entire student body.
At the London School of Economics, they make up 18% of the student body. The EU is also estimated to contribute about 15 per cent of the higher education workforce.

UK universities also won more than £800m in funding from the EU for research.
The critical concern for most vice-chancellors is research collaboration. In any given field where a researcher is hoping to make novel progress, there may only be a few experts on the cutting edge who can help them with their particular problems.
By making it easier for academics to work in other EU countries, and organising cross-border funding, researchers believe the EU enabled European science to do better.
Impediments to accessing the European research network would be keenly felt.
Universities UK, the umbrella body for the sector, estimates that more than 60% of the UK's international research partners are from other EU countries - and collaboration with other EU institutions is growing at a faster rate than relationships with other partners, such as the US or China.
There are also serious concerns about funding shortfalls in particular areas, prioritised by the EU, which - if the UK leaves the European research infrastructure - a future UK government may choose not to back.
Jonathan Adams, chief scientist at Digital Science, which analyses research effectiveness, says: "Leading groups which are critical to economy and society such as nanotechnology and cancer research receive significant amounts of funding from Europe."
So, he said do "smaller universities regionally distributed that are important to the regeneration of industry".

 

[mama cass]

those of you interested in trade agreements outside the EU - here's a question/answer posted by Labour MP David Lammy on Facebook - basically there are none, and any new bilateral agreements would be expected to take at least 10 years to negotiate...

https://www.facebook.com/1912978654...19129786540/10153549574676541/?type=3&theater

 

[LuckyNumber7]

that's not actually true... there has already been an impact on business, British-based businesses missing out on tenders because they're now classed as a risk, news reports on companies mothballing production facilities in the UK, moving out to mainland Europe, the financial sector reporting job losses in the thousands and bids by mainland Europe to take on the City... uncertainty everywhere - the whole country is basically in limbo and is a risk, and people are planning for the worst-case scenario

on a more personal level, British citizens living in the EU who rely on UK earnings/pensions have instantly lost 17% of their day-to-day income - i have friends in that position and it's very real and happening

everything has been affected instantly - whether it's just due to the shock, limbo or what, and how long it will last, no-one knows... even in my line of work, a huge percentage of my work is for EU regulatory authorities, and instead of around 30 or so emails a day, things have suddenly gone very very quiet, and i'm getting maybe 5-10 work-related emails per day right now - i'm not sure if it's because of Brexit or just the summer holidays, but, whatever, it is a big immediate worry all round

It is actually true, in the context that it was written. Everything that has happened so far has been speculative. As I know you know, the formal process has not been initiated. Since the referendum, anything that's taken place is based upon speculation.

 

[mama cass]

It is actually true, in the context that it was written. Everything that has happened so far has been speculative. As I know you know, the formal process has not been initiated. Since the referendum, anything that's taken place is based upon speculation.

speculation? you think the UK having no leader since the 24th, multiple resignations and all the political parties in disarray is simple speculation? this situation is unprecedented and no-one knows if or when or how Art. 50 will ever be triggered, so of course it has had very real repercussions on all levels as everyone tries to cover their asse(t)s

you're just messing with words here! i understand you're not in Europe so can only assume from your comments you clearly have limited understanding of the repercussions of this whole sh!tstorm lol

 

[LuckyNumber7]

speculation? you think the UK having no leader since the 24th, multiple resignations and all the political parties in disarray is simple speculation? this situation is unprecedented and no-one knows if or when or how Art. 50 will ever be triggered, so of course it has had very real repercussions as everyone tries to cover their asse(t)s

you're just messing with words here!

Why is this such a surprise? Yes, speculation. Article 50, not yet in action. The UK, still a member of the EU. So far, everything that has happened has been based upon speculation of what the future holds for the UK.

I'm not "messing with words." This is currently the case. It's a black-and-white discussion. Now, please go back and read that in the proper context. Yes, the economic response (and particularly the response of the GBP) has been one of speculation. That's what political instability does.

 

[mama cass]

Why is this such a surprise? Yes, speculation. Article 50, not yet in action. The UK, still a member of the EU. So far, everything that has happened has been based upon speculation of what the future holds for the UK.

I'm not "messing with words." This is currently the case. It's a black-and-white discussion. Now, please go back and read that in the proper context. Yes, the economic response (and particularly the response of the GBP) has been one of speculation. That's what political instability does.

jeesus christ, please... i won't discuss this with you any further - you've made a whole load of sweeping statements about Britain and this situation that show you have no or very little clue what you're talking about...

this is just the tip of the iceberg - if Art. 50 is triggered, then we have 2 years until we're out, and that isn't long enough to rewrite/renegotiate 40 years of legislation and trade agreements = instability; if parliament decides to ignore Art. 50, then we risk massive civil unrest = instability - either way it looks grim; while waiting for Art. 50 to be triggered/rejected = instability - technically on paper nothing may have happened, but in the real world it's a different story

 

[LuckyNumber7]

jeesus christ, please... i won't discuss this with you any further - you've made a whole load of sweeping statements about Britain and this situation that show you have no clue what you're talking about...

What is your problem? What a fucking rude thing to say. If you want to attack my intellect, let's have at your sparkling personality at the moment. I didn't say shit directed at you whatsoever.

 

[iron yuppie]

speculation? you think the UK having no leader since the 24th, multiple resignations and all the political parties in disarray is simple speculation? this situation is unprecedented and no-one knows if or when or how Art. 50 will ever be triggered, so of course it has had very real repercussions on all levels as everyone tries to cover their asse(t)s

you're just messing with words here! i understand you're not in Europe so can only assume from your comments you clearly have limited understanding of the repercussions of this whole sh!tstorm lol

No one is denying there have been immediate repercussions, but you're doing a lot of doomsaying in the last few posts as well. It's not as though the entire world is going to refuse to transact business with one of the largest economies and most spend-happy consumer bases on earth just because they don't have the tag "EU" on them anymore.

 

[mama cass]

No one is denying there have been immediate repercussions, but you're doing a lot of doomsaying in the last few posts as well. It's not as though the entire world is going to refuse to transact business with one of the largest economies and most spend-happy consumer bases on earth just because they don't have the tag "EU" on them anymore.

the worry is the amount of time it will take to draw up and enter into new agreements - businesses can't hang around for years waiting to see how things will pan out

 

[mama cass]

What is your problem? What a fucking rude thing to say. If you want to attack my intellect, let's have at your sparkling personality at the moment. I didn't say shit directed at you whatsoever.

probably about as rude as you were patronising

 

[LuckyNumber7]

probably about as rude as you were patronising

Why don't you bother to explain? I'm not patronizing you whatsoever. Sorry you feel that way.

 

[Popmartijn]

No one is denying there have been immediate repercussions, but you're doing a lot of doomsaying in the last few posts as well. It's not as though the entire world is going to refuse to transact business with one of the largest economies and most spend-happy consumer bases on earth just because they don't have the tag "EU" on them anymore.

The (uncertain) situation is not whether or not a country is refusing to transact business with the UK, but under which conditions. Consider the following example: The UK has left the EU and is on its own. You have a US business manufacturing (and selling) electronics and want to supply retailers in the UK. Will you have to pay custom duties (and/or other taxes) when the products enter the UK? If so, how much? Are there other regulations your product has to comply with? And of course vice versa, what will the situation be for a UK manufacturer exporting to the USA?
In the end there will likely be some kind of trade agreement between the UK and the USA. But how long it will take and what it will cover is uncertain for now. And until that agreement is there the trade will likely be restricted by the WTO standards (and tariffs). Whose conditions/restrictions are worse than what's covered in current EU-US trade agreements.

 

[Salome]

It's not as though the entire world is going to refuse to transact business with one of the largest economies and most spend-happy consumer bases on earth just because they don't have the tag "EU" on them anymore.

Of course not, but will countries be willing to enter in a trade agreement as beneficial to the UK as the current EU agreements are?
I am sure the US will be trying to get a better deal with the UK than they have with the EU. I think most countries will.

 

[Salome]

It is actually true, in the context that it was written. Everything that has happened so far has been speculative. As I know you know, the formal process has not been initiated. Since the referendum, anything that's taken place is based upon speculation.

As mama cass pointed out, the current standing of the GBP and British stock exchange is the result of the political unrest caused by the referendum, not by a pending Brexit.
The break on foreign investments in the UK also won't help the situation in the short term.

 

[LuckyNumber7]

As mama cass pointed out, the current standing of the GBP and British stock exchange is the result of the political unrest caused by the referendum, not by a pending Brexit.

The break on foreign investments in the UK also won't help the situation in the short term.

I never disagreed with any of this. It's the very point I've made. The markets respond to the politics first. That's what we are seeing now. The actual consequence, short term (1-2 years) will start unfolding once you the action unfolds. And long term, it's uncertain how the UK will recover from the looming economic downfall. A lot of that rests upon politics, and what decisions are made both in the UK and in the EU.

 

[trojanchick99]

Boris Johnson is the new Foreign Minister. Did PM May think she needed to appoint someone who can relate to Donald Trump on a blowhard to bloward basis?

 

[Bluer White]

The (uncertain) situation is not whether or not a country is refusing to transact business with the UK, but under which conditions. Consider the following example: The UK has left the EU and is on its own. You have a US business manufacturing (and selling) electronics and want to supply retailers in the UK. Will you have to pay custom duties (and/or other taxes) when the products enter the UK? If so, how much? Are there other regulations your product has to comply with? And of course vice versa, what will the situation be for a UK manufacturer exporting to the USA?
In the end there will likely be some kind of trade agreement between the UK and the USA. But how long it will take and what it will cover is uncertain for now. And until that agreement is there the trade will likely be restricted by the WTO standards (and tariffs). Whose conditions/restrictions are worse than what's covered in current EU-US trade agreements.

Those are certainly good questions, and it's likely going to take plenty of time (and fancy meetings) to hammer out the details. Same goes for the UK and EU.

U.S. markets seem to have recovered from the initial shock.

For perspective, the UK is somewhere between the fifth and seventh largest trading partner with the U.S., depending on the year and source you choose.

 

[mama cass]

Boris Johnson is the new Foreign Minister. Did PM May think she needed to appoint someone who can relate to Donald Trump on a blowhard to bloward basis?

it's like a cruel cruel joke