Gove: "Post-Brexit talks: UK prepared to walk away in June if no progress"

[Miljea]

BBC News

Is this the Brexit you voted for, Leavers??

Seriously? Threatening the EU?

Text: "The UK has warned the EU it will walk away from trade talks in June unless there is a "broad outline" of a deal.

Michael Gove told MPs the UK wanted to strike a "comprehensive free trade agreement" in 10 months.

But the government would not accept any alignment with EU laws as the EU is demanding, with Mr Gove adding: "We will not trade away our sovereignty."

The EU has already set out its priorities ahead of the formal start of the talks on Monday."

One would almost think No Deal was precisely what we're heading for....

Maybe someone will come from the other side and tell us, in italics why this is great news.

The EU has trade deals with non-EU countries
And if the UK leaves with no deal it will be worse off than any of those other countries

Yes, Australia does fine on WTO terms with the EU
but there is not much movement of fresh food between the two

apples and pears

The UK won't be worse off. It's not in the EU's economic interests to maintain a no deal position, but it might protect its political project at the expense of its member states economies. It has form for this.

Tariffs inevitably reduce the volume of trade between the UK and the EU, but it's the EU which has a huge trade surplus with the UK to protect and the UK which will be on the right side of the EU tariff barrier. I've never understood why remainers want the majority of UK trade on the wrong side of it?

@Lilyladles The UK won't be worse off.

Says who?

@Jason118

17.4m leave voters.

@Lilyladles thank god for that, no need to worry then.

I love this exchange:

*The UK won't be worse off."

Says who?

17.4m leave voters.

!!!!

It has not demanded a level playing field, access to their natural resources, or free movement of people with them. Trying to use the UK's proximity to the EU as justification for these demands is just laughable.

The difference being that these other countries have never been part of the EU. The UK was. The EU is big enough to find new markets within its own countries. The UK for all its posturing, no longer has that clout. Current trade, which the Government seems to want to choke off, is a bird in the hand; trade with the USA, Korea, wherever, is the two in the bush.

The government are treating this as a media exercise. All about saving face and reputation.

Never mind that this is the biggest trade deal we’ve had to strike as an individual country and will have an impact for a lifetime.

Anyone who thinks this is straight forward and can be sorted with bully boy tactics is an idiot.

Tariffs inevitably reduce the volume of trade between the UK and the EU, but it's the EU which has a huge trade surplus with the UK to protect and the UK which will be on the right side of the EU tariff barrier. I've never understood why remainers want the majority of UK trade on the wrong side of it

Put the other way, we have a trade deficit with the EU.

We have less to sell to the EU than they do to us.

So..... we rely on EU goods more than they rely on ours.

Not sure why people think that puts us in the top dog spot.

Regardless of our relative size positions, we need to be prepared to ‘walk away’ I.e trade under WTO rules.

The idea that we are a small insignificant island in the North Sea is ridiculous. We are the 5th or 7th largest economy in the world (depending upon the chosen measure), have arguably the most important global city (and London certainly has more global importance than any other city in Europe), some of the best universities in the world and are one of two global centres in financial services. In addition, London is the chosen playground for most of the mega wealthy and powerful. Thus, we do have negotiating power.

Clearly we will lose more than the EU if negotiations fail. We may not be equal but we are are very large and imports client. What company would refuse to negotiate terms with one of their biggest clients? This negotiation is not a war and both sides want a favourable outcome. However neither side can just dictate terms and both sides have already compromised.

We are not Great Britannia any more but, equally, we are not a pathetic failure who need to go cap in hand to the EU begging to trade under whatever conditions the EU dictates.

The idea that we are a small insignificant island in the North Sea is ridiculous. We are the 5th or 7th largest economy in the world

because of our EU membership.

That’ll fall away.

We dont make anything in significant quantities and we sold our fishing rights and sold rights to drill for our oil.

Iggly,

No, not because of our membership of the EU, that is merely a hypothesis that people like you shout (not whisper). You have not produced anything to evidence this and you have no idea what our position would have been had we not joined.

It is generally people in financial services (typically bank economists) who spout about us not producing anything. Like most advanced economies, most of what we produce is intellectual and we outsource manufacturing. However, a trip around Cambridge might convince you that we do produce things.

In addition, despite leaving the EU, we received more inward investment in tech startups than the US or China,

www.google.co.uk/amp/s/www.cnbc.com/amp/2020/01/15/uk-tech-investment-outpaced-us-and-china-in-2019-study-says.html

I said we don’t produce anything in significant amounts.

That will explain why our trade position with the EU is in deficit.

As for my “hypothesis” - our economy is measured on GDP which, according to many esteemed economists, will fall due to Brexit. We are still bound by the EU rules before you tell me it’s all fine.

So if it is likely to fall due to Brexit, then is that got nothing to do with being a member of the EU?

I don’t want this to turn out badly. I want it all to be fine.

But at the same time, I understand that the UK government needs to stop being dicks and acting like this is some sort of high school debating society and get real.

The analogy for me is that we all need to be grown up about this. The EU is being sensible, sticking to the agreements set out with the UK government.

The UK on the other hand is having a massive hissy fit and as soon as you start digging, it’s obvious they’re being massively unreasonable.

It’s obvious that they know No Deal would be a disaster and if it ends up that way, they can blame the EU when they actively have taken that choice.

Iggly,

To me we either remain and continue the status quo ante or we leave and compete. The former option has gone.

I am afraid I just don’t view economists as experts in the same way as I view real scientists. Esteemed economists can do brilliant theory with all variables tightly controlled. In the real world their predictions are worse than mine.

The bet we are making is being a lightly regulated tech economy. Will it work? I have no idea but nor do you.

A lightly regulated tech economy sounds a disaster to me.

I would rather listen to an economist than some random poster who thinks they’re able to forecast what will happen.

Remaining in the EU didn’t mean maintaining a status quo.

Also we always had the freedom to trade with countries outside the EU 🤷🏻‍♀️

But I know that leaving the EU will take care and consideration. I see none of that from our current government.

Iggly,

Why would you rather listen to an economist? They are like astrologers, they have lots of equations (which do work) but the inputs are totally random (and biased). Have you ever read Naseem Taleb or back tested their forecasts? One thing they forecast every year is the following year’s GDP. It has been shown that just using the previous years actual GDP as a forecast is a better predictor than the consensus economic forecast, showing economist’s adding zero value for their large incomes.

Son,

I have tried to answer that question before but it is really hard to backtest any economic/political decision. What would convince you it was a ‘good’ Brexit?

Well for a start because an economist will understand the implications of things like trade deficits/surpluses and the complications of the relationship with the EU.

Economist don’t just make “predictions”.

🤷🏻‍♀️

A good Brexit would be achieved if the UK government stopped acting like immature teenagers.

Iggly,

That is just confused!

An implication is a prediction under constraints. As I said, economists cannot make meaningful predictions.

And, you cannot judge good or bad based on behaviour, it needs to be based on a combination of utility and economic success post Brexit.

No, not because of our membership of the EU, that is merely a hypothesis that people like you shout (not whisper). You have not produced anything to evidence this and you have no idea what our position would have been had we not joined

Of course we don't, there isn't a parallel universe to compare with, however, all of europe, inc the UK was on its knees after WW2, London certainly wasn't a global financial centre and it wasn't in the 60s or 70s either.
The EEC/EU took away trading barriers and by the 60s the UK applied to join, after previously poo hooing the idea.

As an economy, we've done extremely well in recent years but UK domestic policy wasn't to reduce inequality, in fact the opposite - thats not the EUs fault.

Walking away from a trading relationship into a world economic climate that could easily be in recession or even a depression because of Coronavirus, isn't a great idea.

Wealthy crooks treat london as their playground as the UK doesn't look too hard at the origins of their wealth nor do we tax property as we should, compare London with N.York?

Jasjas,

I don’t disagree with the above and it does not contradict anything that I have posted.

The financial centre came about because of the Big Bang and our light touch regulation. It has nothing to do with the EU. It occurrred in 1987.

The financial centre came about because of the Big Bang and our light touch regulation. It has nothing to do with the EU. It occurred in 1987

Of course, (i worked in the city from 89 to 92) the changes were enormous, but the SM and free movement of peoples, capital and services plus the introduction of the euro has all enabled the 'city to grow perhaps more than it would have otherwise.

ATM London is the financial centre for the EU but next year and in future years, what does London offer the world that any other financial centre can not? why exactly would London stay as the EUs no 1 choice?
Being in competition with the EU works both ways.

What is confused? It’s not confusing to understand that economists do more than predict.

In order to predict, they have to understand how economics work, which means understanding trading relationships and other structures.

So if an economist tells us that the nature of the relationship with the EU is complicated and has an impact on so many things, then yes I’ll absolutely listen to them as opposed to some random on the street.

The best way to “Brexit” is to understand, to compromise and be respectful. I’ve seen plenty of that from the EU and none from the UK.

Threatening No Deal is foolish. Why would you do that when no one wants a No Deal scenario? Why doesn’t the UK come up with sensible options for the basis of a relationship instead of idle threats.