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Hopeful Guy -> RE: The Brexit Referendum: In or Out? (6/27/2016 10:10:23)
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Oliver: I think some of the speculation in your post is perhaps not borne out in fact.
This article is a very interesting insight into the post-Brexit situation in Europe. Der Verband der Automobilindustrie (for those who don't speak German, this is the Association of the Automobile Industry) have called on Merkel, who is the de facto leader of the EU given the extent of German influence there, to offer the UK a favourable trade deal to avoid losing sales in one of the largest markets they have. This is the crucial point: any imposition of tariffs, which you deemed a certainty, Oliver, would be very damaging to European interests.
All of the 5 largest economies left in the EU have the UK as a top 5 export market, and if or when we leave we will become the largest export destination of the EU. Look at the situation from a European perspective. Would you, based on the interests of your country alone, be willing to knowingly reduce your own exports and damage your own economy? Remember, we import 59% more than we export to the EU, and given that any imposition of tariffs would be bilateral, I can't see any tariffs being imposed that would significantly reduce EU trade. It was mentioned before the vote by some EU officials, but that was really only a fear tactic. The prospect, then, is that EU exports
from the UK face the risk of falling from £12 billion a month to, say, £11 billion a month, while the prospect of making deals with China, India and the East, a faster-growing area of exports should easily be enough to counteract this. Then, the pound falling, which might increase costs for manufacturers and tourists, is another thing that will boost exports, since prices for UK goods abroad fall in terms of the local currency, stimulating more demand, and so the net effect on growth and the balance of payments would again be reduced.
Then we have the idea of the US, where there is a very real chance that Trump will become president, making trade deals with us. Obama's "back of the queue" remark is really irrelevant at this point, and indeed he has U-turned on it ( seen here), while Trump I know plans trade deals as a priority with the U.K., and supported Brexit. I don't know Hillary's view, but no doubt someone can enlighten me.
The end result? Trade will not be badly undermined as a result of the vote.
As for environmental and worker's rights regulations, it is a relative certainty that measures will be put in place in this country to that effect. Just because we left the EU, that doesn't mean we won't legislate for ideas which everyone finds important. And the calls for a vote abroad? Those have certainly existed for ages, but they have gained support of late. The minority view has always existed, but thanks to Brexit, they are becoming a much more widely accepted view.
Summary: Trade effects minimal, whereas we don't have to pay our annual contribution of £9 billion, so net economic effect is probably not huge. The economic shock has already been seen to be much worse abroad in the EU than here. Legislation will be put in place to protect workers and the environment. The EU is collapsing, and support for leaving is rising across the continent. And I haven't actually mentioned excessive immigration yet, which was a very important issue for many.
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