UK trade policy post Brexit, PM's view

[odysseus2000]

This is an interesting speech by the PM on his views on the UK's place in the world post Brexit. He makes extensive references to Free Trade, of how it has raised many from poverty and how he sees the UK interacting with the world to maintain free trade. If he follows through with a lot of this there will be many substantial changes to many UK industries, particularly in agriculture and manufacturing with greatly increased export opportunities in these and many other sectors. It stands with me as a very positive speech unlike any that have come from a UK PM in a very long time and looks to me like it will provide very substantial opportunities to investors in UK business:

https://www.youtube.com/watch?v=e0Tg7jFSwQM

Regards,

[Wuffle]

UK has a high cost base.
It all stems from high land and property prices and large, expensive dependent population, though we aren't unique in this (and he isn't going to say so given his core support).
This limits export possibilities and an optimistic speech won't change that.
The two rich blocks to whom exports could be competetive currently have, on the one hand, an 'America First' policy and on the other, a 'sod you for leaving' negotiating stance.
Of the recent success stories, Apple and Amazon rely on cheap labour for margin or volume and the genuine tech companies only employ a handful of very well paid staff, not 65million.
The UK peaked 100years ago, I predict more controlled retreat.
And for absolute clarity, no I don't think a different election result would change any of this.

[odysseus2000]

UK has a high cost base.
It all stems from high land and property prices and large, expensive dependent population, though we aren't unique in this (and he isn't going to say so given his core support).
This limits export possibilities and an optimistic speech won't change that.
The two rich blocks to whom exports could be competetive currently have, on the one hand, an 'America First' policy and on the other, a 'sod you for leaving' negotiating stance.
Of the recent success stories, Apple and Amazon rely on cheap labour for margin or volume and the genuine tech companies only employ a handful of very well paid staff, not 65million.
The UK peaked 100years ago, I predict more controlled retreat.
And for absolute clarity, no I don't think a different election result would change any of this.

I was listening to Sandy Munroe of Munroe associates discussing US & Chinese manufacturing. He was of the opinion that there was now no Labour cost advantage to China, that the costs to make stuff there was similar to the cost of making stuff in the US. One can of course cite all the lower cost countries, but for modern sophisticated manufacture one can't be competitive without both modern factories & a skilled labour force. Elon Musk has said several times that China is a head of the US in several areas & has e.g. a much stronger commitment to lowering carbon than the US.

The arguments that the UK is at a massive cost disadvantage to the rest of the world seems imho to be so 20th century & far less relevant than it was. One can argue that having a nhs system is a massive competive advantage over the US where health insurance is so expensive that many folk don't have it & for those that do, it adds substantial overheads that do not exist for UK folk.

If history is a guide future prosperity depends upon economic growth. Europe has missed out on most of the wealth creation by internet corporations. Almost all the companies that dominate the internet (Apple, Amazon, Google, Netflix, Microsoft...) are American & they have created very substantial wealth for the US. The world is now moving towards revolutions in renewable energy generation, electrical storage, electric transport, robotics, artificial intelligence & towards the establishment of human colonies on the moon & mars. All of these activities will create substantial wealth for the countries that embrace them & it seems possible that a UK no longer run by unelected folk in Europe who have failed to generate wealth from the internet revolution, has a chance to prosper from these new opportunities. The UK has a substantial university system creating a pool of expertise & is at the centre of the global day between the East & West. The UK may fail to take advantage of the opportunities available in the post Brexit world, or it may prosper greatly. The UK went from rationing, blitzed cities, insufficient food & insufficient coal, troops returning in 1945 to the swinging 60's in 15 years. Currently we are starting from a much higher level & if Boris continues as he has set out with a growth & trade orientated PM.

Regards,

[PeterGray]

Currently we are starting from a much higher level & if Boris continues as he has set out with a growth & trade orientated PM.

Unfortunately, his words are not matched by his practice. His reason for being PM was to remove us from the world's largest free trade block. (And that also means all exisiting trade deals with the rest of the world, through the EU, cease to exist at the end of the transition period). The can be renegotiated, but they are complex and take time, and we will be negotiating as on smallish economy, with no existing trade deals, not as the 8 times larger EU, so the omens are not great.

Add to that the insistence that the UK will diverge from the EU - meaning that customs checks, and likely tariffs, become inevitable between us and the block representing nearly 50% of our trade - and also by far the nearest (minimising transport and climate costs). The resurgence of UK car manufacutring was based on Japanese investment due to the friction and tariff free access to the EU. THat will no longer be the case, and Japan now has it's own trade deal with the EU (which we have just torn up). It's hard to see any real future for mass car production in the UK once existing production lines need updating, and the same wil apply to Aerobus wing manufacture if we end up with the sort of fake free trade arrangements that Johnson is talking about.

So the growth and trade orientation is strictly for the press and the public - there's no real sign it will lead to anything of the sort.

[odysseus2000]

Currently we are starting from a much higher level & if Boris continues as he has set out with a growth & trade orientated PM.

Unfortunately, his words are not matched by his practice. His reason for being PM was to remove us from the world's largest free trade block. (And that also means all exisiting trade deals with the rest of the world, through the EU, cease to exist at the end of the transition period). The can be renegotiated, but they are complex and take time, and we will be negotiating as on smallish economy, with no existing trade deals, not as the 8 times larger EU, so the omens are not great.

Add to that the insistence that the UK will diverge from the EU - meaning that customs checks, and likely tariffs, become inevitable between us and the block representing nearly 50% of our trade - and also by far the nearest (minimising transport and climate costs). The resurgence of UK car manufacutring was based on Japanese investment due to the friction and tariff free access to the EU. THat will no longer be the case, and Japan now has it's own trade deal with the EU (which we have just torn up). It's hard to see any real future for mass car production in the UK once existing production lines need updating, and the same wil apply to Aerobus wing manufacture if we end up with the sort of fake free trade arrangements that Johnson is talking about.

So the growth and trade orientation is strictly for the press and the public - there's no real sign it will lead to anything of the sort.

Yes, this is the rhetoric of how great the EU is, but there have been few tangible economic benefits.

Europe has missed out on almost all the wealth created by the Internet economy. Worse is that Europe fast found is dominated by US brands. If the EU was working effectively there should be substantial European internet business and substantial fast food too.

Meanwhile Europe has failed to develop battery cars and now is struggling to come to terms with the new automotive technology and attempt to catch up with Tesla who are now years ahead.

Meanwhile the rest of the world has been growing and there are new huge markets in China and India et al, and populations there hungry for quality UK products and to sell us stuff in return without having to deal with the slow bureaucracy of the EU.

Far from being an insignificant player, the UK is the 6th largest economy in the world:

https://www.investopedia.com/insights/w ... ies-by-gdp

Every year many students from over seas nations choose to come here to study with many returning to their home nations with a good command of the English language and ideas and experience of the way the UK does stuff with the potential for them to implement similar ideas and methods and to buy UK products and services.

I do not see how we will not be able to negotiate many trade deals and to build on the many existing links of good will and trade with the commonwealth.

With Boris as PM and the UK out of the EU I am now more confident and excited about the opportunities in the UK than I have ever before been in my life.

Regards,

[SalvorHardin]

Add to that the insistence that the UK will diverge from the EU - meaning that customs checks, and likely tariffs, become inevitable between us and the block representing nearly 50% of our trade - and also by far the nearest (minimising transport and climate costs). The resurgence of UK car manufacutring was based on Japanese investment due to the friction and tariff free access to the EU. THat will no longer be the case, and Japan now has it's own trade deal with the EU (which we have just torn up). It's hard to see any real future for mass car production in the UK once existing production lines need updating, and the same wil apply to Aerobus wing manufacture if we end up with the sort of fake free trade arrangements that Johnson is talking about.

Presumably you've missed the news about Nissan from yesterday where they're talking about doing the opposite; pulling out of the EU and ramping up production in Britain?

"Nissan has reportedly drawn up contingency plans to pull out of manufacturing in mainland Europe in the event of a hard Brexit in favour of ramping up its production in the UK. If a trade deal is struck between the UK and the EU that leads to tariffs on car exports, the Japanese carmaker would focus on selling more cars in Britain, the Financial Times reported, citing two people involved in the discussions."

https://www.theguardian.com/business/20 ... ard-brexit

Much of the media and most of academia nowadays uses the algorithm "For economy Brexit = Bad but EU = Good." This is what the behavioural economist Daniel Kahneman calls "system 1 thinking" (quick response, stereotypical, instinctive). For those of us who place a bit more emphasis on Kahneman's system 2 when it comes to financial decisions this is great news because it creates a lot of mispriced opportunities. For example, in the days after the Brexit vote the media was stuck in armageddon mode and Central London property was considered to be a sector to avoid. I took this to be a huge buy signal and bought a load of Great Portland Estates at 505p. They're trading at 934p as I type this (up 85%).

https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow#Two_systems

Airbus always threatens to move out of Britain if we don't dance to the EU's tune and then when we don't it doesn't. In this article from last month it seems as if they have changed their tune:

"The chief executive of Airbus has said the future of its British wing plants is "secure" and there is "great potential to expand" post Brexit."

https://www.bbc.co.uk/news/uk-wales-51047264

The media is full of Gove's "experts who always get things wrong" when it comes to the economy. Very few of them put their money where their mouth is (unlike many of us on TLF).

[PeterGray]

Publicly Nissan have said:

"The Nissan Europe spokesperson said: "We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs.

“We continue to urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”"

Slighty different from the unnamed "sources". We'll see. The argument for them staying in the UK seems to be that they could compete better producing just for the UK market if the UK is protectionist - not quite global Britain.

[TUK020]

Yes, this is the rhetoric of how great the EU is, but there have been few tangible economic benefits.

What have the Romans ever done for us?

[servodude]

Yes, this is the rhetoric of how great the EU is, but there have been few tangible economic benefits.

What have the Romans ever done for us?

They bought the fish we didn't like to eat?

[richfool]

Publicly Nissan have said:

"The Nissan Europe spokesperson said: "We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs.

“We continue to urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”"

Slighty different from the unnamed "sources". We'll see. The argument for them staying in the UK seems to be that they could compete better producing just for the UK market if the UK is protectionist - not quite global Britain.

Noted that during the Brexit referendum in 2016 and subsequently, Remainers in their “Project Fear” campaign, claimed that leaving the EU would bring economic Armageddon, particularly to the UK’s car industry. Yet despite the doomsday predictions, it's nice to note that Nissan announced on Thursday that it would continue to operate its Sunderland plant, while closing down production in Barcelona.

[PeterGray]

Publicly Nissan have said:

"The Nissan Europe spokesperson said: "We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs.

“We continue to urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”"

Slighty different from the unnamed "sources". We'll see. The argument for them staying in the UK seems to be that they could compete better producing just for the UK market if the UK is protectionist - not quite global Britain.

Noted that during the Brexit referendum in 2016 and subsequently, Remainers in their “Project Fear” campaign, claimed that leaving the EU would bring economic Armageddon, particularly to the UK’s car industry. Yet despite the doomsday predictions, it's nice to note that Nissan announced on Thursday that it would continue to operate its Sunderland plant, while closing down production in Barcelona.

Perhaps you should read this: Nissan: UK factory still under threat from no-deal Brexit https://www.bbc.co.uk/news/business-52900528

Simple statement of the obvious truth, that Brexiteers chose to sweep under the carpet as project fear that We are committed. Having said that, if we are not getting the current tariffs, it's not our intention but the business will not be sustainable. That's what everybody has to understand

Currrently we are heading for No Deal and Johnson is more concerned to do posturing than worry about the future of the British economy and consider an extension, so Nissan workers job relief may prove to be short lived.

[richfool]

Yes, I also noticed it was from our left wing BBC and Guardian websites.

I'll have to leave it to our trade deal negotiators, who fortunately aren't remainers..

[Arborbridge]

Publicly Nissan have said:

"The Nissan Europe spokesperson said: "We’ve modelled every possible ramification of Brexit and the fact remains that our entire business both in the UK and in Europe is not sustainable in the event of WTO tariffs.

“We continue to urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade.”"

Slighty different from the unnamed "sources". We'll see. The argument for them staying in the UK seems to be that they could compete better producing just for the UK market if the UK is protectionist - not quite global Britain.

Noted that during the Brexit referendum in 2016 and subsequently, Remainers in their “Project Fear” campaign, claimed that leaving the EU would bring economic Armageddon, particularly to the UK’s car industry. Yet despite the doomsday predictions, it's nice to note that Nissan announced on Thursday that it would continue to operate its Sunderland plant, while closing down production in Barcelona.

Perhaps you should read this: Nissan: UK factory still under threat from no-deal Brexit https://www.bbc.co.uk/news/business-52900528

Simple statement of the obvious truth, that Brexiteers chose to sweep under the carpet as project fear that We are committed. Having said that, if we are not getting the current tariffs, it's not our intention but the business will not be sustainable. That's what everybody has to understand

Currrently we are heading for No Deal and Johnson is more concerned to do posturing than worry about the future of the British economy and consider an extension, so Nissan workers job relief may prove to be short lived.

The comments from Nissan this morning reminded me of the Great Irony of 2016: that the North East voted to leave despite being one of the biggest beneficiaries of being within the EU. A grand example of shooting oneself in the foot.

Arb.

[Arborbridge]

Yes, I also noticed it was from our left wing BBC and Guardian websites.

I'll have to leave it to our trade deal negotiators, who fortunately aren't remainers..

Actually, it wasn't the BBC commenting - it was Nissan itself stating the obvious. They'll leave unless we get a deal which continues to keep business viable, otherwise why wouldn't they decamp eventually? At present, no deal looks more likely and Nissan's factory more precarious. That isn't being left wing, just being realistic about the current prospects.

Whether refusing to extend the trade talks deadline due to the stasis caused by C19 (anyone ever heard of injury time?) is some sort of genius negotiating tactic, remains to be seen. To most of us mere mortals, it just seems to defy commonsense not to extend - unless you have the sort of bias which welcomes crashing out without a deal.

Arb.

[kiloran]

Yes, I also noticed it was from our left wing BBC and Guardian websites.

I'll have to leave it to our trade deal negotiators, who fortunately aren't remainers..

It is also on the left-wing Telegraph website

[Bagger46]

Noted that during the Brexit referendum in 2016 and subsequently, Remainers in their “Project Fear” campaign, claimed that leaving the EU would bring economic Armageddon, particularly to the UK’s car industry. Yet despite the doomsday predictions, it's nice to note that Nissan announced on Thursday that it would continue to operate its Sunderland plant, while closing down production in Barcelona.

Perhaps you should read this: Nissan: UK factory still under threat from no-deal Brexit https://www.bbc.co.uk/news/business-52900528

Simple statement of the obvious truth, that Brexiteers chose to sweep under the carpet as project fear that We are committed. Having said that, if we are not getting the current tariffs, it's not our intention but the business will not be sustainable. That's what everybody has to understand

Currrently we are heading for No Deal and Johnson is more concerned to do posturing than worry about the future of the British economy and consider an extension, so Nissan workers job relief may prove to be short lived.

The comments from Nissan this morning reminded me of the Great Irony of 2016: that the North East voted to leave despite being one of the biggest beneficiaries of being within the EU. A grand example of shooting oneself in the foot.

Arb.

Arb,

I think that UK PLC has shot itself in the foot, not just the North, or Welsh hill farmers for that matter. The trouble is that this awful truth will dawn in decades to come, deeply affecting our grandkids futures. Of course the EU has lots of bad faults(as if we don't anyway), but in the end the EU will reform itself, will have to and would have done it a little quicker with us in imho, but I have always thought that leaving a massive trading block where we were a major partner, and proposing to negotiate with this giant to our benefit was madness, and no deal (which we seem to be heading to) would be a disaster. The world is an increasingly dangerous and unstable place, and yet again being within a strong block, belonging to our historical heritage, would gave been safer in the long run. We remainers will just have to lump it with the rest, and carry on getting abused more than occasionally. My belief in the benefits of so called democracy have been very shaken during this whole process, because so many clearly voted without considering the issues at all, it only took a few fat lies swallowed by masses(the statistical analysis of voting patterns make stark reading which prove my point beyond the slightest doubt anyway). What many called 'project fear' was 'project common sense'.

Bagger

[PeterGray]

Yes, I also noticed it was from our left wing BBC and Guardian websites.

I'll have to leave it to our trade deal negotiators, who fortunately aren't remainers..

Good grief! It was a direct quote from Ashwani Gupta, the global chief of operations. The reason it was on the BBC and Guardian website is that they are sources of news! Perhaps there's a lesson for you there.

[Howard]

Yes, I also noticed it was from our left wing BBC and Guardian websites.

I'll have to leave it to our trade deal negotiators, who fortunately aren't remainers..

Would you suggest a news website covering this statement from the company which you believe to be unbiased.

It will be interesting to read their coverage.

regards

Howard

[richfool]

I realise that Nissan want to bring pressure to bear to get the best outcome for them; as of course will the UK's Brexit negotiators in their negotiations with the EU.

It will be interesting to see what the outcome is at 23.59 on the 31st December. No doubt it won't suite the BBC, nor the remainers on LF, whatever it is.

[mao44]

I realise that Nissan want to bring pressure to bear to get the best outcome for them; as of course will the UK's Brexit negotiators in their negotiations with the EU.

It will be interesting to see what the outcome is at 23.59 on the 31st December. No doubt it won't suite the BBC, nor the remainers on LF, whatever it is.

Surely the best outcome for everyone would be a deal as opposed to no deal!!!!