Free trade agreement.

[Corcory]

People keep going on about the fact that we can't be in the single market without agreeing to freedom of movement but why can't we negotiate a free trade agreement like the other countries in the world that are not in the EU?

[Mistigri]

I should put that 150k in context (actually it's a bit less but rounded figures are good enough here).

Volkswagen sells about 2.5m cars a year in China. Audi over half a million. BMW, Porsche and Mercedes close to a million combined.

Not all of those German cars are made in Germany of course; the big German car companies have transplants in China. The lesson for the UK is that it's probably not possible for, say, JLR, to significantly expand its Chinese sales without making cars locally.

Note that MG recently stopped assembling cars in the UK, it's done in China now.

[Mistigri]

Carol off the top of my head, UK car production is about 1.6 million (of a total world market of 70 million +). Of those, about half are exported to the EU. UK car exports to China are around 150k (rough figures, again) - mostly upmarket brands like JLR.

Brexit isn't going to stop JLR exporting to China, but it's not clear that it will make it significantly easier either. JLR will still have to compete with other luxury brands, and in any case, that's not the segment of the Chinese market that is growing fastest right now.

OTOH, the Japanese car companies, ie Britain's volume car makers, need local markets for their production.

[caroldecker]

Mistigri What do you call any numbers when referring to UK cars in China?

[IAmNotTheMessiah]

...Unless, of course, you're a UKIP MP who believes that the tides are caused by the sun and not the moon...

[Mistigri]

I should summarise that article (for the benefit of those who won't bother to read it):

"Double the distance, halve the trade."

[Mistigri]

topsy if you want to argue about Brexit impacta on the car industry, you need to go and do some proper reading. This superficial stuff about German car manufacturers is just irritating.

The trend is that the developed world makes less and less cars over time

This is very misleading. What time frame are you referring to? Are you forgetting the small matter of the financial crisis and its impact on vehicle sales in major western markets? What do you mean by the "developed world" - are you counting US cars made over the border in Mexico, for example?

One of the big changes in the car industry in the last couple of decades is that production of mass market vehicles now mostly takes place within or close to the market in which the car is sold. A decade or two ago, (within my working career as an economist/ analyst covering this market among others) many of the Japanese vehicles sold in America and Europe were made in Japan. Note that "within or close to" includes vehicles made inside trading blocs - Fords assembled in Mexico for the US market, Toyotas made in the UK for export to the EU, etc.

Cars are mostly made close to where they are sold. It's no surprise that China is now the world's largest car manufacturer, because it's also the world's largest car market in terms of sales - and it makes little sense to ship mass market cars halfway around the world. You can be extremely confident that unless the UK somehow develops a world-beating luxury vehicle manufacturing industry that UK-built cars are never going to be sold in China in any numbers.

For the UK car industry to thrive (and it's not just the foreign-owned car companies that matter: there are lots of UK companies selling materials and components to the car industry), it needs access to the EU market.

This is worth reading, on the subject of NTBs and the gravity model, and is particularly relevant to this thread.

medium.com/@Nightingale_P/ice-cream-selling-in-egg-land-10c4419f89d8#.c67cbye5w

[smallfox2002]

Funny that.

[topsy777]

"confirm your bias all the way"

It doesn't. But it confirms another thing. I really have real work to do.

[smallfox2002]

You don't think the world recovery from the global banking crash has anything to do with those figures? Also the fact that in that time Rover has gone out of business and stopped producing cars probably has something to do with it.

Don't let it stop your narrative that the car industry isn't important, confirm your bias all the way, doesn't make you correct.

[topsy777]

It was a nice headline and it is literally true but if you dig, the numbers are weak. In 2005 UK produced 1.8 million, so 1.68m in 2015 is a 10 years high, but not a 11 years high.

French production has now halved compared to 2005.

For mass market cars, the German aren't doing that well either. If they were sitting comfortable than there was no need to cheat (the emission scandal).

If you look at manufacturing in EE and the newly industrialised counties, there numbers are up by meaningful amount.

en.wikipedia.org/wiki/List_of_countries_by_motor_vehicle_production

[smallfox2002]

www.smmt.co.uk/2016/01/best-year-in-a-decade-for-british-car-manufacturing-as-exports-reach-record-high/

The car industry wouldn't be moving if we were in the EU, you've only changed your mind so you can try to discount the importance of it to the UK.

The tariff only being 10% is really important when you consider the brands manufactured here! Price is not the only determinant of demand for cars, but it is a very important one for the cars mass manufactured here.

[smallfox2002]

Yet we exported more cars from the UK than ever before last year.

Just the headlines from this article about our very important car industry.

UK car manufacturing reaches 10-year high, growing 3.9% to 1,587,677 vehicles.
More cars exported than ever before, up 2.7% on previous year at 1,227,881.
Domestic production surges 8.1% to 359,796 to meet increasing demand for British-built cars.
EU demand grows 11.3%, with 57.5% of exports destined for the continent.
US overtakes China as UK’s largest export destination, with demand up by a quarter.

[topsy777]

I have changed my mind slightly since we last have the conversation about the car industry after researching into reputable reports on the car industry.

The trend is that the developed world makes less and less cars overtime. Germany just about able to hold up and the UK has been on the down trend. Many of German cars are now made via joint venture in China (though not yet exported).

UK 1.8m units (2003) 1.68m (2015) (this is into a backdrop of a much larger automotive market world wide)
DEU 5.5m (2003) 6.03m (2015)

US was at the top spot with 12m unit in 2003 and China is the top producer in 2015 with 21m unit.

MG (a rather weak and unique case) has shipped their production back to China just a few days ago.

Unless we 'upgrade' our production capabilities massively, the car factories for mass market cars over time will not be here whether we are in the EU or out of the EU. The EU MFN WTO tariff on cars is just 10% and the EE parts of the EU are catching up fast.

[smallfox2002]

"No. The very reason there are here is to make money, not to be part of EU or part of anything.W

Yes the money they make by having full access to the EU single market is why they are here.

If we don't have access they'll leave they have said that.

Tariffs will have far more of an impact on Nissan and Toyota than they will on BMW, Mercedes and VW.

[topsy777]

Swiss - It is actually unclear.

If it is fake preferences, i.e. advertise jobs in a Swiss job centres in French/German/Italian/Romansh for 3 days before they go online, then clearly it will not have the intended effect and in that case, the Swiss blinked. Such action is probably unconstitutional and we shall see.

If it involves real discriminations against EU nationals that would be crossing an EU red line. If EU accepts that, then EU blinks.

Further, the EU (seems to be behaving a little bit like the EIC nowadays) demands a raft of other conditions (such as acceptance of EU court jurisdiction) as part of the 'deal'. If the Swiss accepts that, the Swiss has not just blinked, but capitulated.

We will have to wait and see.

[RedToothBrush]

Robert Peston has written a very good article about the customs union and the mere existence of Liam Fox and the International Development Department on his Facebook today.

//facebook.com/pestonitv/posts/1697230203935051

Well worth a read.

[Peregrina]

www.theguardian.com/world/2016/sep/22/switzerland-votes-for-compromise-to-preserve-relations-with-eu Looks as though the Swiss did blink first, although it's only at the debate in Parliament stage so far.

[topsy777]

I see.

That is on a different thread and I thought we have moved on from that?

[whatwouldrondo]

Topsy I was addressing your endless posts on how Europe is on a trajectory to become a superstate, not just the post on that document.

[topsy777]

Wwrondo

You are over reacting but as you said you / familt are affected I can see why.

You are looking for clear transgression and I am looking for clear limits. Neither present in the document.

As I said, there is nothing sinister in the document and yet you managed to relate that to conspriracy.

Have a good trip.

[whatwouldrondo]

Topsy I am not getting mired in discussion of your conspiracy theories again. I see nothing in that document that undermines why I voted to remain. Maybe it is because I see it from the point of view of the world looking in rather than from the UK out but all the global issues it highlights and the role the EU plays and can play in achieving a fairer world was one of my prime reasons for voting remain. I am a pragmatist and concepts like sovereignty have little meaning in a connected world, certainly not worth damaging the UK economy and bequeathing a divided and diminished UK to the young adults just making their way in the world. The future of my children and not betraying their aspirations as young Europeans was another of my prime reasons for voting. I suspect you can spout all this speculation with ease because it will not directly affect you, as it is affecting my family already. There was enough that set us apart to ensure that there was never going to be a superstate, in any case the US and China are examples of how even where there is a notional superstate the reality is that it doesn't work and regional difference make true centralised government very difficult, practically paralysed in the US, now resorting to hardline brutality in China.

Anyway I have to pack and will be beyond wifi from tonight but no doubt repeating that endless conversation about why the UK is being so idiotic. I have had it twice with overseas visitors this week, sigh.......

[whatwouldrondo]

I might add that though it is a little overblown the Chinese people have with some justification (Opium Wars, Hong Kong, Sacking of the Summer Palace, national humiliation) been led to believe that Great Britain was not a "good thing". The difficulty of the visa requirements for the UK specifically vary, like those of no other country, depending on what percieved slight we have delivered. It was one thing to have been able to relay coverage of all the kowtowing to Xi during the state visit. I do not see it even being possible politically for the government to agree a financial passport at the expense of Hong Kong, even if it were practical.

[topsy777]

wwrondo,

You are intellectually smart enough to deal with proper policy documents so here we go:

eeas.europa.eu/top_stories/pdf/eugs_review_web.pdf

There is nothing sinister in the draft, but clear limits are not drawn either.

There is a section that says Athena funded organisation will act independently of NATO if necessary.

Of course there is no 'agreed plan'. There is a proposal that keeps coming back. I cannot guarantee it will become reality but neither can you guarantee that it will not stray anything further from say a 10 people team in a small room to just 'coordinate existing arrangements'.

[whatwouldrondo]

Plus there is a long and rather tedious separate thread on the reality behind the spin on the EU military HQ. There is no agreed plan for an EU army, just a lot of different hot air from EU members, none of which would gain agreement from even the remaining 27. The military plan was agreed by the UK and comprises some common sense and cost effective measures on co ordination and procurement. Since security is one of the few areas in which we have a clear strong hand in negotiations it is very likely the UK will continue to take part in the military plan since it is beneficial and effectively compliments NATO.

[GloriaGaynor]

Historically Canada and USA are more our friends than the EU

Bollocks. I don't get Leave voters obsession with English speaking countries. Other than that some Brits weird xenophobic fear of countries with a different language is deep, paranoid and pervasive.

Culturally we have more in common with Europe, we have an ancient shared history.

China will extract a very high price for further access to its markets.

The US has made it very clear deals with the EU and the Pacific are their priority.