The Brexit referendum thread: potential consequences for GB, EU and the Brits in CH

[Tom1234]

	Quote:	Aeneas
	Just like how emptying the water from a sinking ship with a thimble helps?

Obviously it doesn't.

But it does more (however little) than moaning which achieves nothing.

Did you really think that I thought that JH buying a packet of salt and vinegar would solve the U.Ks problems?

Increased exports on a massive scale would.

[Aeneas]

	Quote:	ZuriRollt
	I don‘t really believe that you‘ve grasped the reason behind Tom1234s post

Why don't you explain it to me then? Was he being satirical?

[Aeneas]

	Quote:	Tom1234
	But it does more (however little) than moaning which achieves nothing.

No. It potentially wastes resources and distracts from solutions that can actually achieve something. That can sometimes be worse than 'just moaning'.

[ZuriRollt]

	Quote:	Aeneas
	Why don't you explain it to me then? Was he being satirical?

No. It‘s about being factual.

[greenmount]

	Quote:	Aeneas
	No. It potentially wastes resources and distracts from solutions that can actually achieve something. That can sometimes be worse than 'just moaning'.

How does buying stuff produced in your home country waste resources? Since it has already reached another market, it's here, on some shelves in the supermarket. UK has lost the advantage of attracting cheap labour so their products won't be as competitive as the ones of Germany or Italy for instance. But in principle it's not a bad thing if a country's emigrants buy things made "back home"...oder? However I agree it's not much..
This topic made me smile because we like cheddar cheese and buy quite often, not for the same reasons obviously..

[Aeneas]

	Quote:	greenmount
	How does buying stuff produced in your home country waste resources?

It potentially wastes one basic resource. Good will.

A person is asked to do something for a good cause; donate money, buy a product, boycott a product, or otherwise behave outside of their normal pattern of behaviour. Their reward is that this makes them feel good about themselves, allows them to virtue signal their good deed.

Along comes someone else who tries to get them to do something something else for that cause. All other things being equal the response will be smaller as many others will feel they had done their bit for that cause. That's why there is such a frenetic effort to jump people on the street to sign up for donations, because once they've signed up to donating to one or two, they begin to refuse to sign up to any more - they've done their 'duty', after all.

Good will is, like every thing else, a finite resource and this means if you want people to support your cause you want them to do so in a way that will have the greatest impact. And all this is before one considers that the return on a campaign to get expats to buy more products from the home country could cost more that the tax revenue generated, money that could have been better employed with subsidies, tax breaks or even a marketing campaign for the general foreign market.

Indeed, given the fact that the UK is overwhelmingly a service-based economy, how much benefit would there be to promoting manufactured exports? Would it not benefit the UK more if it focused on increasing the export of services, not goods?

The problem, with Brexit, is that it has been largely directed though a series soundbites offering simple solutions for often complex, nuanced, problems. After all, getting lots of new trade deals will be easy - they'll be clambering at the door - or the UK imports more to the EU than visa versa, so there's no way the EU won't want that to continue, or with all that money saved it'll go and make the NHS so much better. All of those were sold as slam dunk solutions too.

Until they didn't. And all that Tom is suggesting is another potentially ill-considered Hail Mary in a now long list of Hail Marys.

[TonyClifton]

	Quote:	Jim2007
	An economy that has not been a consistent net exporter for decades can't suddenly attribute it's problems to lack of trade deals for a start... No doubt at the micro level certain firms are more impacted than others, but at a macro level it is too small to have such a big impact. But no more than the EU before it BREXIT is now the excuse for not delivering by industry.

Finally see the economic argument for Brexit?

Or rather, explains a lot why Brexit thus far has been an economic non-event.

[NotAllThere]

	Quote:	TonyClifton
	Or rather, explains a lot why Brexit thus far has been an economic non-event.

Oh definitely a non-event.

Brexit Costs UK £100 Billion a Year in Lost Output.

[Tom1234]

	Quote:	Aeneas
	Indeed, given the fact that the UK is overwhelmingly a service-based economy, how much benefit would there be to promoting manufactured exports? Would it not benefit the UK more if it focused on increasing the export of services, not goods?

Why would it not be feasible to increase both export of goods as well as services?

Apart from financial, much of the service revenue is exporting IP, particularly chip design and solutions. There was talk on the radio this morning about manufacturing chips too (to remove reliance on Taiwan but there would be other benefits).

The US high-tech industry has recently has been returning much manufacturing back from Asia to home shores providing jobs and export revenue.

[TonyClifton]

	Quote:	NotAllThere
	Oh definitely a non-event. Brexit Costs UK £100 Billion a Year in Lost Output.

4% larger?!

Point to a EU country, or any western country that has seen that much extra growth in the last 3 years! How does this stuff even get printed

Funny how none of these inverted puff pieces on the economic impact of Brexit on the third anniversary don't mention how the UK locked down harder and for longer than almost all other developed nations too.

[Biro]

	Quote:	Tom1234
	Why would it not be feasible to increase both export of goods as well as services? Apart from financial, much of the service revenue is exporting IP, particularly chip design and solutions. There was talk on the radio this morning about manufacturing chips too (to remove reliance on Taiwan but there would be other benefits). The US high-tech industry has recently has been returning much manufacturing back from Asia to home shores providing jobs and export revenue.

There is very little serviceable infrastructure left to increase exports of goods !


Services, there are a lot of people doing the same but with a smile and able to communicate in several different languages.

[Aeneas]

	Quote:	Tom1234
	Why would it not be feasible to increase both export of goods as well as services?

Firstly, I was responding to what you suggested where you never mentioned services.

Secondly, the whooshing sound you may be hearing is the point of my last post going over your head. If we all had infinite resources, then absolutely, in your scenario we could ask expats to support both UK goods and services. But what if we can only get them to stretch to one? Did you not understand this point or are you simply ignoring it?

	Quote:
	Apart from financial, much of the service revenue is exporting IP, particularly chip design and solutions. There was talk on the radio this morning about manufacturing chips too (to remove reliance on Taiwan but there would be other benefits).

Do you gave even the vaguest notion of how much investment and time it takes to develop an advanced chip foundry? Decades and tens of billions. So what's going to keep the UK afloat while that's brewing? Remittances?

	Quote:
	The US high-tech industry has recently has been returning much manufacturing back from Asia to home shores providing jobs and export revenue.

Do you have hard facts on what they've brought back? I don't mean anecdotal feel-good stories, I mean bottom line national statistics.

The US is presently attempting to return manufacturing back from Asia, much as it began to lower hydrocarbon dependence on the Middle-East twenty years ago, which they only achieved relatively recently.

You would think that trying to solve the situation using cavalier and ill thought out strategies to this point would have brought home the fact that the cavalier and ill thought approach didn't work very well, but seemingly not.

	Quote:	TonyClifton
	Funny how none of these inverted puff pieces on the economic impact of Brexit on the third anniversary don't mention how the UK locked down harder and for longer than almost all other developed nations too.

The UK locked down harder and for longer than almost all other developed nations? Do you have a source for this claim?

[Ato]

	Quote:	Tom1234
	Apart from financial, much of the service revenue is exporting IP, particularly chip design and solutions. There was talk on the radio this morning about manufacturing chips too (to remove reliance on Taiwan but there would be other benefits).

I think The UK should adapt to the international chip market. I mean salt and vinegar are mostly accepted at this point, but prawn cocktail is still a step too far for most of the European Market. You would have thought that cheese and onion would be a runaway success, but in come the Taiwanese with their exotic flavours.

[Tom1234]

	Quote:	Aeneas
	Secondly, the whooshing sound you may be hearing is the point of my last post going over your head. If we all had infinite resources, then absolutely, in your scenario we could ask expats to support both UK goods and services. But what if we can only get them to stretch to one? Did you not understand this point or are you simply ignoring it?

I think that whoosing sound is actually a plane trying to reach high enough altitude to get over your big head.

I was being facetious about asking Jackie to buy more cheddar, OK?

Regarding the U.S, reshoring of manufacturing is a thing. As for semiconductor foundries - a massive one is currently being built in Arizona.

[Jim2007]

	Quote:	greenmount
	UK has lost the advantage of attracting cheap labour so their products won't be as competitive as the ones of Germany or Italy for instance.

I think you have indirectly identified the true problem of the UK - it’s a low value added economy and while cheap labour has been a distinct advantage for individual companies that government policy has disadvantaged the country as a whole. You can’t compete against third countries in the market with a European cost base.

If you look at the consistent net exporters in Europe - Germany, Switzerland, Ireland and so on, the thing they all have in common is that they are producing high value added products. Stuff you are willing to pay for because of its quality or you just can’t do without it.

And at the end of the day that comes down to government policy. For me the UK and Ireland are very much the same, clammed out economics joining the EEC in 1973, same language, legal system, similar education system and so on. And yet today Ireland’s GDP per capita is about $83k in-line with Switzerland while the UK comes in at around $42k. I believe the difference comes down to economic policy and the interest groups that are in a position to influence it.

[marton]

	Quote:	Tom1234
	I think that whoosing sound is actually a plane trying to reach high enough altitude to get over your big head. I was being facetious about asking Jackie to buy more cheddar, OK? Regarding the U.S, reshoring of manufacturing is a thing. As for semiconductor foundries - a massive one is currently being built in Arizona.

In your link, they are counting "foreign direct investment (FDI) job announcements" as reshoring which is a bit of a stretch, take that out and they are claiming reshoring of 100,000 jobs per year which is OK but compared with the 166 Million employed in the US it is well under 1%. Compare this with the 300,000 US jobs outsourced every year.

[TonyClifton]

	Quote:	Jim2007
	And at the end of the day that comes down to government policy. For me the UK and Ireland are very much the same, clammed out economics joining the EEC in 1973, same language, legal system, similar education system and so on. And yet today Ireland’s GDP per capita is about $83k in-line with Switzerland while the UK comes in at around $42k. I believe the difference comes down to economic policy and the interest groups that are in a position to influence it.

What a great country Ireland is, booming GDP that has had zero effect on living standards. What's going wrong, Jim?

[Tom1234]

	Quote:	marton
	In your link, they are counting "foreign direct investment (FDI) job announcements" as reshoring which is a bit of a stretch, take that out and they are claiming reshoring of 100,000 jobs per year which is OK but compared with the 166 Million employed in the US it is well under 1%. Compare this with the 300,000 US jobs outsourced every year.

I haven't got the time to find decent stats. The rest is anecdotal from personal experience.

Most investment in industry seems to be with foreign investment - not just in the U.S. The chip foundry in Arizona is with Taiwanese money but worth 40 billion.

[Tom1234]

	Quote:	Jim2007
	If you look at the consistent net exporters in Europe - Germany, Switzerland, Ireland and so on, the thing they all have in common is that they are producing high value added products. Stuff you are willing to pay for because of its quality or you just can’t do without it.

The U.K. does a lot of that. But it's classed as a service even though it's practically more linked to hi-tech manufacturing being IP and technical expertise.

[greenmount]

	Quote:	Jim2007
	And yet today Ireland’s GDP per capita is about $83k in-line with Switzerland while the UK comes in at around $42k. I believe the difference comes down to economic policy and the interest groups that are in a position to influence it.

Yes, Ireland seems to have adopted very good economic policies in the past 20 years or so. Thinking of European Union it can work in your favour if you have good politicians who would fight tooth and nail for their country's interests in Bruxelles...not all countries have those people though. In some countries like mine there's even a counter-selection in politics, inheritance from communism. The interest of EU would be that each country should be given the chance to develop a few competitive even niche sectors so we'll be all doing better than alone or than third countries and the disparities between countries wouldn't be so big. Especially when there is huge natural and human potential but ended up serving the needs and interests of other countries.