UK-EU trade deficit hits highest level in history-the UK has the leverage(11 Posts)
The trade deficit with the EU hit the highest level in history February-April 2016 at £23.8 billion in the EU's favour (roughly £100 billion a year). The EU simply cannot afford to put tariffs on UK goods because we buy so much of their goods. After Brexit we have the economic leverage to create a great & unique UK trade deal
That's just a fundamental misunderstanding of how trade works.
It's like saying that because I buy more from
Waitrose than it buys from me, it needs me more than I need it.
Mrs B - that is true - you can shop elsewhere, not just Waitrose, so they do need you more than you need them. That is why every supermarket runs deals and offers to try and tempt you away from their competitors.
MrsB that is a terrible example, the UK is the EU's largest export market in the world, the current trade deficit is so big if the EU try to impose tariffs on us their economies (particularly those already in trouble e.g. Spain,Greece,France) would collapse
They really wouldn't. What makes you think they won't prioritise a) selling stuff to each other instead, given they will no longer be barred from doing so? (Right now they have to give equal consideration to UK exporters as ones in their own markets) and b) much larger markets like China?
To take my Waitrose example, if I were to tell Waitrose I'm not shopping there anymore, would they come back and offer me considerably better terms than any of their other customers?
If they only had 178 potential customers and you were the fifth richest of all of them then yes..
At the end of the day everything takes a backseat to making money. German car manufacturers will make sure they can still sell their cars here, they have more to lose.
Europe is a declining market in considerable turmoil, the rest of the world is growing.
Don't get me wrong the 40% of imports consumed by London and the South East might shrink a bit and the 6.5% consumed by Wales, Scotland and Northern Ireland might rise. Exports too but will do so in a more equitable way where the entire country benefits rather than your selfish little clique of rich bankers MrsB.
What makes you think they won't prioritise selling stuff to each other instead?
Are you joking?
Germany needs to sell to us because we are the fifth biggest economy in the world. We buy loads of their stuff!
How can Germany possibly survive by selling to the other EU countries?
Greece? - busted.
Italy? - the economy barely any bigger than when the single currency was introduced.
France? - unemployment double the level of the UK or the US.
Spain? - 45% unemployment in the under 25s
Finland? - one of the most technically advanced countries in Europe and now 7% smaller than it was before the start of the financial crisis.
(These figures come from the Economics Editor of the Guardian, Larry Elliott.)
Now now Milly,
The treasury report clearly states that we will not sign a single trade deal in the next 15 years and that growth will drop from 2% to 1.88%. We have to trust the experts!
Hence there will be no deal with Germany, they would rather lay off 300,000 people who make the 1,000,000 cars per year that they export to us to prevent any of the 200,000 cars we make getting into Europe.
The chairmen of Volkswagen, Mercedes, BMW etc will tell Merkel that they think we smell and we don't deserve to drive their cars.
Also that Hans who works in their plant in Bavaria was once mean about their fashion sense so his entire plant should close.
They will carry on making some cars but give them to Greeks in exchange for 15 olives, or 27 olives for a Merc. They will also retrain some of their workers to make CS and teargas.. Just in case you understand, and use their new found wealth of olives to make up for the food shortages when the French farmers go on strike. Again.
If you were a UK business, would you think it a good use of your time to have to negotiate separate trade deals with every country in the EU, or use recognised trade terms already negotiated and agreed?
Plus what Leavers keep ignoring is the fact that, if we want to negotiate free trade terms with the EU, there would be conditions attached. Most notably, freedom of movement.
Augusta that is wrong, the EU has several trade deals which allow free trade but have no fees or no free movement e.g. Mexico, South Korea, Peru etc. It is spin the remain campaign use
We don't have economic leverage because 15% of our GDP is earned through exports to the EU whereas the rest of of the EU earns less than 5% of it's GDP through it's exports to us. That means if anything the EU has more leverage over the UK.
Proportionally EU countries earn roughly the same % from us as we do they do to them Germany is the exception & exports a lot more to the UK than we do to them. In the last day or so the German finance minister told journalists that being in the single market would not be appropriate for the UK if we vote to leave. That would mean no deal along the Norway?Iceland models .
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