EU referendum, brexit and the aftermath

The Germans have a €50bn trade surplus with the UK. Do you think that they will be keen to exclude us from trading with them? We are their 2nd largest trading partner by surplus, 2nd to the USA.

If it comes down to the wire over free movement of labour (I think free movement of people is easier to achieve) do you think the Germans will want to lose €50bn euros, or at least have their products take a hit on €50bn euros worth of import duty. Say we implement 10% import tax on German products and they implement the same on ours. Our exchequer collects €5bn more than theirs, assuming their products still sell at the same rate (that's enough to pay for Scotland if they stay).

So I think we can accept that there will be a desire to negotiate trade deals at least with the most powerful economic power in Europe. The bluster about exclusion from the single market is fine and expected but there's too much at stake for the economies of the countries involved to leave the politicians to enforce their idealism.

However the battle will be over which countries want which industries and jobs. In this case the latest EU attack on Ireland regarding Apple should help the UK. We could remain popular by pricing ourselves just below the competition which might have to effectively apply a flat tax across Europe.

We can't negotiate a trade deal with Germany- it's part of the EU, we have to negotiate a deal with all 27 members as a single entity. Yes, Germany will be a loud voice, but...

...we're unlikely to get a better deal out of the club than in it.

Also, trade deals don't happen quickly. Canada has been in negotiations with the EU for 8 years and the deal is still not ratified. One of the big issues still to be resolved? Romania and Bulgaria demanding visa free travel.

Is John Redwood really this clueless?

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I heard him say this too in Brexit: The Leavocrats - 31/08/2016 - @bbcradio4 http://www.bbc.co.uk/programmes/b07qbcb6

I thought it was an interesting take, and I wondered whether it was technically that simple. And if not, why not?

I guess you mean more autonomy?

Was your point that autonomy is a relatively term, rather than an absolute one? Ie we can only ever have more autonomy rather than "autonomy".

Do you think the other member states of the EU will let us leave and keep all the benefits of the single market whilst restricting the free movement of people and stopping contributions to the EU budget, i.e. having our cake and eating it?

I'm no expert, but I think I know the answer to that one.

And that's taking the proposal seriously. The breathtaking arrogance of such a position is astonishing.

Wanting all the good bits and not the bad bits after exiting eh

The brexit meme of divorcing but still wanting full access to the car and house to shag your new partner in comes to mind... :)

Basically keep thing as it is, but without that EU sticker on it.

Why would we want to rush into a deal that preserves our 50 billion euro trade deficit with Germany? Don't you think that imbalance is a bit of a problem?

You do acknowledge that tariffs would change the trade that goes on, but you begin your analysis of their effects from the assumption that they wouldn't, which i think is nuts. The Germans won't much adjust their prices to adsorb the tariffs, so the extra will be paid by UK purchasers, making us all feel poorer. As we export so little to them, they'll barely notice paying extra for our stuff, and our devaluing currency will soften that further.

Actually the trade imbalance has been causing Germany problems too, leading to too much saving - driving down the interest rates for pensions, inflating asset bubbles and generally destabilising their banks and the the weaker eurozone economies. It would be much better for everyone if their trade surplus could be recycled into productive capital investments in the deficit economies. But we've voted ourselves out of the possibility of any such rational arrangements.

Actually the trade imbalance has been causing Germany problems too

Very true. In fact, it is the outcome of desperate attempts by successive governments to correct the effects of increasing domestic injustice.

Agreed about the points above, I think the whole thing will be unsolved even following 2 years of negotiations. However, a shell company buying/selling products in Europe through Canada (as an example of a commonwealth country that's prepared to work with us) would probably succeed in solving some trade blocks. We have some skill working around the rules and will probably end up with a number of years of grey area post article 51.

My point about Germany is that they will have to convince the rest of the EU not to cut their throats.

I do wish it wasn't happening but I don't believe in the rules or the politicians to the extent that I can't see alternative routes to market existing.

I don't want to rush into that deal, I prefer a country that produces more of the product it requires and I don't mind if BMW's cost 40% more. BMW however will do. I deliberately avoided the potential for a shift in trade following tariffs because it's too complex to calculate and nothing you or I could say here would accurately predict the effect it might have.

I don't agree with your last paragraph, the problem is not that of a trade surplus in Germany but what they do with it within the EU. A trade deficit of that size is a problem I'd like the UK to have.

Cha Canada and the USA may work with the UK, but don't forget ttip originated in the USA, and Canada has something similar it is trying to negotiate.

It may worsen things for small companies and employees even more.

Do you think the other member states of the EU will let us leave and keep all the benefits.... [etc. ?]

In a word, no.

But I am curious about the concept of not doing anything other than evoking Art. 50.

Is that a technical possibility?

However, a shell company buying/selling products in Europe through Canada (as an example of a commonwealth country that's prepared to work with us) would probably succeed in solving some trade blocks.

Except that would not be allowed under Ceta:

Canadian exporters will have to prove that their goods are entirely "made in Canada", which imposes extra costs, to prevent imports entering the EU through a "back door".

http://www.bbc.co.uk/news/uk-politics-eu-referendum-36639261

Initially I thought that would just result in WTO trade rules coming into effect after two years (which by many is seen as a worst case scenario). However, turns out that even that isn't so simple: https://www.ft.com/content/5741129a-4510-11e6-b22f-79eb4891c97d

This is an interesting proposal that was doing the rounds earlier in the week
http://bruegel.org/wp-content/uploads/2016/08/EU-UK-20160829-final-1.pdf

Adding more complexity, there may also be issues for WTO members making agreements with non WTO members (so, pretty much every state in the world with the UK).

http://m.jiel.oxfordjournals.org/content/8/4/825.short

And:

There is no reason for WTO members to give the UK an easy ride – quite the opposite, in fact. As part of the EU, the UK demanded a pound of flesh from African, Caribbean and Pacific countries in the recent Economic Partnership Agreements; these countries may now seek payback.

Then there are late WTO joiners such as China and Russia who were required to make far greater concessions than existing members; they too may now seek to extract additional concessions from the UK in return. Desperate to cement its position in the WTO and no longer able to rely on the combined power of the EU, the UK lacks significant bargaining leverage.

https://theconversation.com/why-uk-could-be-doomed-to-years-without-proper-access-to-world-trade-61782

It's all ok though. We've got our country back.

It'll only be a few years and then we'll start rebuilding the British Empire.

That's the spirit. Time to roll our sleeves up and make Britain great again.

hey guise! check out all my sovereigntys!

Oh the UK didn't just give the finger to the EU?

Equal treatment then :P