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Not quite. If as you say, most of the 1.6M cars produced in the UK were exported, then most of the 2.6M cars registered in the UK must have been imported. A little math goes a long way.
There were 2.6M new car registrations in the UK in 2015.
The point I was making is that the UK does have manufacturing capacity for a large number of vehicles. If Brexit does lead to tariffs, which personally I doubt, then that will drive some structural changes in the auto and in other industries as well as changing buying patterns. For example, if BMW feels that the UK market is important and wants to maintain market share by avoiding tariffs then not too hard for them to shift some manufacturing to the UK given that they already have some capacity in the country.
From what I am seeing of the debate, most of the economic arguments - on both sides - tend to be simplistic and speculative. For example, we don't know that the EU will impose tariffs and we don't know if the UK would retaliate. It is all speculation with a hefty dose of scaremongering thrown in.
Your sarcastic response is,if I may say so,an indication of how poor the Remain campaign has been and why it will manage to lose a referendum all the " experts " like yourself predicted it would win easily.
Hubris and arrogance are not the most useful characteristics to employ when attempting to convince people of your argument,as David Cameron is finding to his cost.
Do a search on my posts in this thread, or any other thread for that matter, and you'll find that I rarely say anything without backing it up with linked evidence. I treat my readers with respect, unlike the blowhards here who spout nonsense of the the top of their head, and expect everyone to just take it at face value.
For the record, I don't have a dog in this fight. I hold Irish and US passports.
I have for years lamented on other message boards, that the EU media have, relative to US media, kept EU citizens poorly informed. Boris' piece in the Telegraph is just another example. No respectable US outlet would publish such a piece without a link to supporting documentation. I practice what I preach!
The point I was making is that the UK does have manufacturing capacity for a large number of vehicles. If Brexit does lead to tariffs, which personally I doubt, then that will drive some structural changes in the auto and in other industries as well as changing buying patterns. For example, if BMW feels that the UK market is important and wants to maintain market share by avoiding tariffs then not too hard for them to shift some manufacturing to the UK given that they already have some capacity in the country.
From what I am seeing of the debate, most of the economic arguments - on both sides - tend to be simplistic and speculative. For example, we don't know that the EU will impose tariffs and we don't know if the UK would retaliate. It is all speculation with a hefty dose of scaremongering thrown in.
And it is 'arithmetic', not 'math'.
Sure, I don't think anyone believes it's a simple either/or binary choice. That said, it is equally not possible to turn one spigot off and another on overnight. The UK is still short capacity of a minimum of 1M vehicles a year.
If as you say a majority, say 900,000, of the 1.6M cars produced are exported, it follows that about 1.9M were imported.
If Brexit does lead to tariffs, which personally I doubt, then that will drive some structural changes in the auto and in other industries as well as changing buying patterns.
Actually, that's an interesting topic. Personally, I think it's not an unrealistic scenario that tariffs will get introduced.
Maintaining status quo (no tariffs) would require a preferential trade agreement with the EU that governs "substantially all the trade" between those two economies. Considering that TTIP, CETA and the likes are about to fail it's very unlikely that such an agreement will be agreed upon on time.
The only other option to eliminate all tariffs would be to unilaterally abolish tariffs for all WTO members. While this is an option some free traders seem to flirt with, I don't think that this is going to happen. In any case, it will be interesting to see what's going to happen. Personally, I wouldn't want to be in the UK or the EU during that time.
Actually, that's an interesting topic. Personally, I think it's not an unrealistic scenario that tariffs will get introduced.
Maintaining status quo (no tariffs) would require a preferential trade agreement with the EU that governs "substantially all the trade" between those two economies. Considering that TTIP, CETA and the likes are about to fail it's very unlikely that such an agreement will be agreed upon on time.
The only other option to eliminate all tariffs would be to unilaterally abolish tariffs for all WTO members. While this is an option some free traders seem to flirt with, I don't think that this is going to happen. In any case, it will be interesting to see what's going to happen. Personally, I wouldn't want to be in the UK or the EU during that time.
While tariffs are a fairly blunt instrument, they are no entirely so. Tariffs can be targeted. So, for example, the EU introduces tariffs on British car exports. The UK does not have to do a like for like retaliation. They could, for example, bang big tariffs on French and Spanish agricultural imports while leaving other imports tariff free. Or you target an import where you have other sources of supply. The USA, for example.
Aspects of Porter's Five Forces model include the bargaining power of suppliers and the bargaining power of customers. Start applying that to tariff decisions and you have a very interesting situation.
You also have the dynamics of the EU where you can play one country off against another. So you hit an industry that is important to France in retaliation for a tariff that benefits a German industry.
Again, I don't think it will come to any of this. Trade/tariff wars don't benefit anyone and the UK leaving the EU is bad news for them. My expectation is that a Leave vote will be followed by more serious negotiations and concessions leading to another referendum. Just my opinion.
You realise that if you unilaterally refrain from imposing tariffs on certain goods from the EU you'd have to grant that benefits to all the other WTO members? I'm not sure, if that's what the UK would want. Only if you'd agree with the EU on a Preferential Trade Agreement you could pick and choose obligations as you seem to have it in mind for the UK. Without that you'd be stuck with the UK's WTO commitments.
And yes, it's absolutely certain that there will be tariffs. At least for a while. I just don't see how the UK and the EU will agree on a Preferential Trade Agreement governing substantially all trade within two years. The environment is too toxic, Gove and Johnson (and Cameron as it seems) promised to leave the single market and there is a general unwillingness to compromise.
I mean, tariffs aren't even your biggest problem. What are you planning to do about trade in services regulations?
You realise that if you unilaterally refrain from imposing tariffs on certain goods from the EU you'd have to grant that benefits to all the other WTO members? I'm not sure, if that's what the UK would want. Only if you'd agree with the EU on a Preferential Trade Agreement you could pick and choose obligations as you seem to have it in mind for the UK. Without that you'd be stuck with the UK's WTO commitments.
And yes, it's absolutely certain that there will be tariffs. At least for a while. I just don't see how the UK and the EU will agree on a Preferential Trade Agreement governing substantially all trade within two years. The environment is too toxic, Gove and Johnson (and Cameron as it seems) promised to leave the single market and there is a general unwillingness to compromise.
I mean, tariffs aren't even your biggest problem. What are you planning to do about trade in services regulations?
For a start, I don't think that there will be tariffs because the EU would be the big losers due to their very healthy trade surplus with the UK. However, if tariffs are imposed then the UK will retaliate. It would be political suicide not to do so.
I don't know the ins and outs of the WTO agreements but I do know that the USA regularly targets certain countries with tariffs so I don't see why the UK could not. Furthermore, there are plenty of non-tariff barriers that could be used. I recall a time when the French made all Japanese video recorders go to a facility in Poitiers to be 'tested'.
But, in any event, trade agreements are a huge red herring. You do not need a trade agreement to do business whether it be goods or services. What you need are the right skills or the right product at a competitive price.
The other question is why has it got to this point? The EU risks losing the fifth biggest economy in the world and the second biggest contributor to their budget and why? Because they were unwilling to sit around a table and make some serious concessions? The EU is in need of reform. Too many back-room politicians like Junckers playing games, too many countries like Greece or Spain with their hands out for free money and too many new entrants too quick. Don't imagine that Germany are going to be happy to pick up the tab for everyone else.
The EU needs an existential crisis because it is still a 1960s solution to a 1930s problem. It needs some serious reform but it doesn't have the institutions to make that happen. So you get Brexit.
WTO members agreed to reduce or eliminate tariffs and other barriers to trade. Every member agreed on a minimum standard granted to all the other members. To ensure that there is no discrimination, the WTO introduced a principle called most favoured nation (MFN) principle.
It means that countries generally can't discriminate between their trading partners, even though various exceptions exist. One of those exceptions are preferential trade agreements. The EU is one of those preferential trade agreements. This exception allows the UK to discriminate other WTO member states (those that have to pay tariffs) in favour of EU member states that don't have to pay tariffs.
If the UK decides to leave the EU there is no legal basis for discriminating all the other WTO members. The UK would be legally obliged to introduce tariffs for products from the EU. Just like the EU would be obliged to introduce tariffs for British products. Otherwise they are subject to dispute settlement.
Now, both the UK and the EU could decide that they still want to be on good terms and unilaterally remove all tariffs. At this point MFN would kick in again and would require them to eliminate all tariffs for all the other WTO members.
As you can see, it's not about the UK and the EU willingly starting a tariff war. It would happen automatically when the British people decide to leave the EU.
As to why the whole ordeal started? Well, I'm a bit tired of that discussion. It's a chicken or the egg causality dilemma. I could easily say that the EU doesn't care since the UK wouldn't remain the world's fifth biggest economy after Brexit and that EU budget contributions are not really relevant considering their relatively low amount compared to domestic budget contributions. Why is it always the remaining 27 remaining member states that have to sit around a table and make some serious concessions? Why not the UK? Why is it only the UK that is unwilling to bring their benefits system in line with ECJ judgments? Why is it the UK that is maintaining one of the biggest lobbies in Brussels encouraging such backroom deals?
Frankly, I can't see any good reasons for leaving the EU besides some vague Trump-esque "Make Great Britain Great Again" slogans. Do we need change for the better? Sure, that's always good. But at this point I'm still struggling to understand or even make out the proposals of Brexit politicians. There doesn't seem to be a plan besides "You'll see, it will all be better afterwards".
But, in any event, trade agreements are a huge red herring. You do not need a trade agreement to do business whether it be goods or services. What you need are the right skills or the right product at a competitive price.
It's funny how you bring up Porter in one post and then say that the elimination of trade barriers doesn't facilitate trade. That makes zero sense.
It's funny how you bring up Porter in one post and then say that the elimination of trade barriers doesn't facilitate trade. That makes zero sense.
I didn't say that. The point is that you don't need trade agreements to trade. The EU has been trading with the USA for years and there is no trade agreement (yet).
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