Kosh wrote:It's clear from these two comments that you don't understand a fundamental aspect or trading within the EU compared to trading without.
Currently there is no duty paid on goods moved between the UK and any other EU nation. Should we leave the EU, this would no longer be the case - i.e. a duty tariff would apply to all goods entering and leaving the UK just as it does presently with all other non-EU countries. At a stroke this would add somewhere between 2 and 10% to the price of all these goods, with the obvious effect of increasing price inflation in the UK (increased cost of imports) and reducing the competitiveness of our exporters.
It would also complicate VAT to a lesser extent..
So you fully understand EU and non EU trading do you? mmm....
1. Consider that "90% of British exports would not face tariffs and even for those that do, average tariff levels are now generally low. They are charged only on trade in goods and not on services or income.
2. Our trade in goods is below 50% of our total trade and the cost of collecting these low tariffs on goods is more than the cost of tariff collected overall. Some notable sectors could in theory be subject to significant tariffs (eg. cars at around 8%) but reciprocal tariffs would damage EU exporters too, so the incentive for the mutual amelioration of tariffs is strong. This does however depend on negotiating a new positive relationship with the EU" which is what the PM is setting out to do.
Since the time we joined the EEC and after several General Agreements on Tariffs and Trade (GATT) tariffs are now generally much lower. Many are negligible, or have been eliminated altogether. So today, customs unions are becoming less and less relevant. There are no substantial customs unions anywhere in the developed world except for the EU, which in global terms looks more and more anachronistic. It is interesting to note that neither ASEAN nor NAFTA are customs unions.
Kosh wrote:In addition to the direct effect on prices, the additional cost and complexity will be a disincentive to overseas companies who use the UK as their bridgehead into Europe. And as we have seen, other EU countries will be only too happy to welcome these companies instead..
Honda recently announced it is making 800 redundancies at its Swindon plant. A Honda spokesman said, "sustained conditions of low demand in European markets make it necessary to realign Honda's business structure."
The Society of Motor Manufacturers and Traders have forecast business to remain flat in 2013. Paul Everitt, the chief executive of the SMM&T said "There are difficulties in Europe, there is no doubt about it. But the market in the UK has held up reasonably well."
In contrast to this position (the Single Market) then, one might look to Jaguar Land Rover, who only two days after the Honda announcement stated that they will be creating 800 new jobs at its factory in Solihull. Why? Because demand for its luxury vehicles from countries such as China, the US and Russia is now so strong, it needed to recruit those additional staff. So, irrespective of the UK’s car-buying activity – which seemed to perform well last year, at least – a focus on the Single Market means job losses; the orientation to the rest of the world means job creation.
Kosh wrote:None of this is 'scare stuff'. It's just factual information that anti-EU types are either ignorant of or, more likely, deliberately ignoring.
Yes it is just scare stuff and none of it based on facts.
Consider: Article 50 of the Treaty on European Union, which provides for a member state to withdraw from the EU, is explicit that “the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.”
Such agreements must conform to the principles set out in Article 3(5) which includes “free and fair trade”. This is why Jacques Delors referred to “a free-trade agreement” as an option for a new UK-EU relationship in his comments in December.