Even EEA becomes a bit of a minefield for companies due to country of origin rules. For instance you can't get tariff free trade by setting up a trade deal with say the US, importing US goods sans tariff and then selling them on to the EU via the EEA, as the country of origin for those goods is still the US, when a UK company sells those goods on to the EU via an EEA deal it does so under the terms agreed between the EU and the USA.
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The UK votes to leave the European Union |OUT2| Mayday, Mayday, I've lost an ARM
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Even EEA becomes a bit of a minefield for companies due to country of origin rules. For instance you can't get tariff free trade by setting up a trade deal with say the US, importing US goods sans tariff and then selling them on to the EU via the EEA, as the country of origin for those goods is still the US, when a UK company sells those goods on to the EU via an EEA deal it does so under the terms agreed between the EU and the USA.
UcchedavÄda
Member
UK scientists dropped from EU projects because of post-Brexit funding fears
This is not really surprising, but it's probably going to be a bad time for both scientists and students in the UK once you pull the trigger. The EU makes a lot of funding available, but it is typically predicated on the host institute being placed in a EU member state, which will of course no longer include the UK.
So you'll probably see more scientists and students leaving the UK to work abroad, unless the UK itself takes steps to replace the EU funding, but even then you'll still see fewer EU scientists and PhD students coming to the UK, which will serve to weaken your scientific community. But unless the majority of economists are wrong, then there'll probably be less money for science in the UK, going forward.
This is not really surprising, but it's probably going to be a bad time for both scientists and students in the UK once you pull the trigger. The EU makes a lot of funding available, but it is typically predicated on the host institute being placed in a EU member state, which will of course no longer include the UK.
So you'll probably see more scientists and students leaving the UK to work abroad, unless the UK itself takes steps to replace the EU funding, but even then you'll still see fewer EU scientists and PhD students coming to the UK, which will serve to weaken your scientific community. But unless the majority of economists are wrong, then there'll probably be less money for science in the UK, going forward.
CyclopsRock
Member
Presumably the cost of operating these factories - the labour and energy, at least - have gone down too, though.
Funky Papa
FUNK-Y-PPA-4
Many key components used by MINI, Bentley and Rolls-Royce Parts are sourced from abroad. IE, Bentley and Rolls-Royce use VAG and BMW motors and transmissions, while the leather comes from Northern Europe.
Tradesmen may be cheaper, but critical parts have suddenly become hideously expensive and export prospects are looking grim.
JonathanEx
Member
I'm guessing this is partly due to May? I'm still cautious as all her rhetoric suggest she'd be happy to be outside the EEC etc for the sheer fact of having to reduce immigration. Are the "markets" hoping that she'll go back on this and stay in the common market?
It's all to do with a removal of political uncertainty. The bounce will last until the next set of economic indicators. So we'll probably have about two weeks of calm.
SporeCrawler
Member
He certainly looks muslim.. Dat name. Dat beard.
PJV3
Member
And the final nutbag being kept away from office, Gove or Leadsom would have sent the country down the shitter.
It's tough to say with certainty as "what the market thinks" is such a nebulous concept.
The following factors could be said to be involved in the rise:
- The political situation being cleared up in the UK much quicker than was expected (markets don't care too much about Labour as they had no real chance of election anyway).
- May does not want an election.
- US job figures were measurably better than expected a couple of days ago.
- Carney has done a good job of easing the markets.
- Javid and Osborne have started a world tour to drum up trade - showing the UK is not moving towards protectionism and is more towards free trade.
- May was preferred to Leadsome as she is seen as more competent, a better negotiator, calm, and she has a pretty much guaranteed 4 year term which gives a lot of stability.
- May does not want to invoke a50 straight away, it will be around 5 months minimum.
There are other factors too, but those are the main ones.
firehawk12
Subete no aware
So I guess the plan is to try to establish trade relationships with as many other nations as possible before severing ties with the EU via A50 to have some kind of buffer in place?
I think so, yes.
Although severing ties is probably a bit too extreme of a way of putting it.
Linkstrikesback
Member
Ucchedavāda;209750083 said:
This is happening, yes.
A few Professors in my department had grants that informally sounded like they were going to be accepted that were deliberately held back from being granted until the days after the election results, and were rejected in the days following the result.
Everyone here is scrambling to make sure they have an EU citizenship and passport where possible, and there are very few people who aren't considering moving out of the UK now.
JonathanEx
Member
Ta for the context all. And yes, major apologises for invoking the idea of "what the markets think", that's normally something that'd send me yelling THEY CAN'T THINK THEY'RE NOT A PEOPLE OR ONE MASS but it's sort of useful shorthand occasionally i'm sorry
More Fun To Compute
Member
There is some vestigial case for resentment and entitlement when talking about the "German car industry." In terms of high prestige industry the UK has been gutted and has watched Germany thrive as the British government adopts experimental free market policies while Germany sticks to very aggressive mercantile policies that abuse the good will of their neighbours. China has a very similar relationship with both the EU and the US on a larger scale. It's odd that many younger people in England have no real understanding how industry was so important to social cohesion and self esteem in communities in England.
Benjamin1981
Member
BMW sales grew 5,8% in the first half of the year and 9% in June over the same period last year.
Audi first half sales grew 5,6 % and June sales grew 7,4 % over the same period last year.
Mercedes expects sales will exceed their expectations for the whole year also.
Yeah, we are taking some real Ls here.
Mini, Bentley and Rolls Royce will soon be manufactured here in Germany.
That depends where the vehicle is sold....
- when sold in the UK, the cost will tend to increase due to the effect of the exchange rate on component prices.
- when sold in the EU, the cost of that vehicle may decrease. The vehicle is 'assembled in Euros' so the exchange rate makes no difference. However locally source components/labour/energy will be cheaper.
You can have informal discussions you can't sign up to any deals before you actually leave. Not that it would be possible to actually agree a simple bilateral trade deal in the time frames talked about. The mean time for international trade agreements is about 4 years from start to finish (and the UK doesn't really have the negotiators for it)
Though given the simple rule of trade negotiation (the bigger country gets what it wants: which is the whole purpose of trade blocs) I do think people are going to be a bit disappointed with what the likes of Australia, India and Canada end up offering. I'd also think any country would want to see what the UK's relationship with the EU will look like before signing up.
firehawk12
Subete no aware
Yeah, fair enough.
That said, I assume the EU is not amused at having to essentially spend the next half a year waiting.
I assume they'd want to implement some kind of trade deal with someone big like China and offer them something that the EU doesn't because of regulations or other similar restrictions. The UK not being in the EU has to be sold as a competitive advantage, somehow.
Yes, I'd imagine they aren't but I suppose from a UK point of view that's some leverage we have.
The Friendly Monster
Member
The longer a50 goes without it being triggered the further away the prospect is, we aren't going towards it.
Not really, because if we start pre-agreeing free trade deals to be triggered to start upon us leaving the EU, it would actually cause more issues staying than leaving.
Funky Papa
FUNK-Y-PPA-4
In terms of profits coming from the UK, you definitely are. Sales are also going to contract.
That doesn't mean that the big three are going to run into massive problems, but it's not good for its European divisions, which are less profitable than others. Poor UK sales and reduced profits can (and will) absolutely have a negative impact in their European operations. In the short term, we could see some reductions in the EU as a direct consequence. There's not a lot to do when you are getting a reduced number of orders and British profits come in GBP.
As for Bentley and Rolls-Royce being manufactured in Germany... that could be problematic since their halo comes from being built in the UK. What could happen is that both companies turn into screwdriver plants, importing most components from the mainland and then bolting them together. But that would be a post-Brexit situation. It's hard to tell what is going to happen to both companies in the meantime, other than a probable hit in their profits.
Brexit is basically a shit deal for the European automotive industry, although once is everything said and done, the EU will probably profit from it in terms of relocated jobs and investment.
That 'if' is so large it could crush a town, however.
Funky Papa
FUNK-Y-PPA-4
Rolls-Royce and Bentley won't drop their prices unless on the eve of an impeding catastrophe. Commanding absurd prices is in their blood and a huge part of their appeal.
I can see MINI being a bit more agressive in the EU, although that may depend on BMW's beancounters.
.
Can we pretend reports that Brexit won was an elaborate mistake by the press?
Chittagong
Gold Member
Great post.
I must say I'm genuinely impressed how quickly UK has managed to pull its head out of its ass in two weeks. New PM, promise on slashes on corporation tax, likely cut in interest rates, quick trade discussions, all in two weeks. In the post-referendum chaos markets priced in a complete loss of plot, which is now being revised a bit.
Of course doesn't make it any less embarrassing that nobody except for Sturgeon had a fucking plan what to say in case Leave won, or that every single one of the architects of this mess have bailed out.
Thanks.
I agree with you on the point that it was shambolic nobody (apart from the Bank of England) had a plan apart from Sturgeon, but I must say the establishment has sorted its shit out pretty quickly.
edit: Curveball, I'm one of May's new "FORUM THOUGHT LEADERS" that is trying to make you more sympathetic to the establishment.
OBEY
The Friendly Monster
Member
Project Fantasy.
What makes you think bilateral free trade deals can be negotiated informally, in under a year, by a country lacking skilled negotiators, which has proven itself difficult to cooperate with, while they are preparing to negoiate their exit from another union?
My point was that it's disingenuous to say that we are moving towards triggering article 50, even if we had a date set. The more time passes the less likely it is to be triggered at all.
Siemens will continue to invest in the UK, because it's a "good place to do business" whether it was inside or outside the EU."
http://www.bbc.co.uk/news/business-36771595
The UK government slashing corporate tax and cutting regulations is going to help take the edge of Brexit it seems.
http://www.bbc.co.uk/news/business-36771595
The UK government slashing corporate tax and cutting regulations is going to help take the edge of Brexit it seems.
Funky Papa
FUNK-Y-PPA-4
This bit is particularly important. Investment for local demand (which was probably already scheduled) while warning about potential issues with exports. This is consistent with their previous position:
Which means that any investment that Siemens UK could receive in order to drum up its exports could be diverted elsewhere.
Either case, good luck trying to fund the NHS and social assistance programmes with reduced corporate taxes across the board.
Right now, the UK doesn't even have the manpower to negotiate the Brexit, with one trade lawyer suggesting the UK needs 20 times as many negotiators. I'm not sure how these poor fellows would pull off negotiating with the EU and China while not committing suicide on the spot.
Under EU law, the UK can neither negotiate nor "pre-agree" trade relationships with other countries as long as it is a member of the EU.
anonymous_abc
Member
No, it would just end before the courts with stiff penalties for the UK....
Hey now, no need to get heated, I've been enjoying both sides of the debate, let's keep things chilled! This has been one of the best threads I've been involved in, it's actually made me post on GAF again after a couple of years, so let's keep it civil
I think that the UK will probably find it a lot easier to deal with the Singapores, Taiwans, Chinas, USAs and Australias of the world rather than the EU, which is a bit more complex.
We lack negotiators, true, but it's worth noting we have the 2nd biggest network of diplomats in the world, which can be leveraged to investigate trade possibilities.
It won't be easy but I think the UK has a good shot, especially after kind offers of help from Oz and NZ.
It will be interesting anyway! Let's see what happens, Osborne/Javid have USA, India, South Korea, China and Singapore on their visit list for the next couple of weeks so we should get some signals then.
Hilariously Osborne might keep his job because he's in front of so many big-names in the next few weeks it would be embarrassing to fire him before he gets it done.
Pressure's on George!
Most companies avoid paying it all together anyway, and it makes up a small percentage of the tax receipts in the UK. It's more important to have companies over here employing people and paying them salaries than for them to leave the UK.
It can't negotiate with the EU, but it can with the rest of the world..."unofficially".
15% of something is better than 40% of nothing.
They cannot do that. No member of the EU can negotiate in any form any trade relationship on their own.
We have some pretty mean negotiators here in Australia, we've been able to do free trade agreements with China, and Japan and Korea (ongoing) and were able to balance them in a way that didn't upset any of those countries, even the US was shocked to learn how close our ties were to China, Japan and Korea at the same time. We were able to negotiate a free trade deal with the US within about a year...
Palculator
Unconfirmed Member
"How can you be inspired out of poverty?"
Bananajama
Banned
So glad to be getting out of the EU with bullcrap like this
The whole systems designed to keep you in a Federal Europe
Quote this post if A50 ever gets triggered, I will perform a forfeit of Meadows choosing.
I don't see May having the balls to do it, put it off, let the masses get distracted and then change the nature of the debate (GE? based on her pitching Labour voters, Ref on the nature of the deal with 60% needed etc...). It's clear as day parliament will need to vote.
I don't care what she says now, politicians know timing is everything when it comes to message changes.
I don't see May having the balls to do it, put it off, let the masses get distracted and then change the nature of the debate (GE? based on her pitching Labour voters, Ref on the nature of the deal with 60% needed etc...). It's clear as day parliament will need to vote.
I don't care what she says now, politicians know timing is everything when it comes to message changes.
Can't wait to see the first ad with a bowl hat british man saying "DEUTSCHE QUALITAT" when selling a Mini (which already feels more like BMW at heart now anyway)
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