KevinPotts
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Some weeks back I posted the following in the EU Poll we ran within this community and I'd like to extend my observations a little further, but for the sake of completeness, here was my trigger post:
"EU - In or Out + Poll. I've had another round of deep thinking ...well not that deep really... about IN/OUT whilst on hols this week.
So let's say Friday morning at 7AM the decision is OUT...Leave... What does it mean?
I know, I know you all think "Potts has finally lost it, he's gone bonkers" as Leave means exactly what it says in the tin!
Does it?
Leave triggers a 2 years negotiation to fulfil the democratic wishes of the people. Emmmm.
So what will that negotiation involve?
Well it will involve deciding what Leave means...seriously!
Do we step OUT completely and entirely and follow a World Trade Organisation model, negotiating our own trade agreements...maybe.
This is the nearest expression of what most of the population will think of when we say LEAVE.
But of course at the end of the 2 years negotiation with Europe, the negotiated agreement will have to go through our parliament for approval.
So with a Conservative government with a majority of just 13, is it likely that Labour, Lib Dems, SNP and 50% of the Cons (all of whom wanted to Remain) will agree to this definition of Leave....doubtful. So that negotiated version of Leave may very well struggle to be approved.
Or we could end up at the end of 2 years with a multitude of variations upon what Leave means.
Nearly all the rest will include access to the Single Market or a variant... And guess what that will involve...a LARGE financial contribution from the UK to Europe and a commitment to the FREE MOVEMENT of people, but without any say... We will have Left.
How will parliament feel about getting one of those options approved?
Well I think begrudgingly , Labour, SNP, Lib Dems and 50% of Cons will approve it.
But the rest of the electorate, we'll be confused and angry and could there be blood on the streets? I don't know, but I can envisage some irreparable fault lines occurring in party politics.
So my friends... Just chewing the fat ... If we Leave... If we are OUT Friday morning, what does that mean? "
Having broadly seen the position we now find ourselves in, I've been thinking some more and have a few more observations:
1. What will the final model of out look like? It will broadly be one of three options, nuisanced by our specific negotiations:
- access to the EEA (European Economic Area) which is like being part of the Single Market, paying a contribution of similar or more than our existing contribution, abiding by EU laws, observing the 4 freedoms (capital, goods, services & people), non tariff access, no decision making powers within the EU. This is probably what most economists/ finance sector hope for, but in my opinion would be the most unlikely to occur as there would be uproar from the electorate (Leavers).
- access via what is called an Associate Agreement. A watered down version of EEA, with more restrictions and still some form of free movement of people.
- access via WTO (World Trade Organisation) rules. This is likely to satisfy the will of the electorate (Leavers) more than any other options, but would involve tariffs. For example it is on this basis that the USA trades with the EU and they face a 10% tariff on automotive imports from the USA. This would be the most economically disastrous model for the UK.
2. I have 4 observations each of which are critical to our exit and each of which will impact one way or another on these variants:
A. The Financial Services Sector - we are the 500lb gorilla of Europe for this sector and for us to continue to dominate and even continue to operate in a strong position, we absolutely need free and unfettered access to the EEA. But I've explained the costs and social implications above.
So what do we do?
B. Automotive Industry - we have a high level of committed foreign investment in this UK industry (Nissan, Jaguar/Land Rover etc etc), quite literally billions of £s of investment. What happens if WTO rules apply and even modest tariffs of the likes of the USA come into force? Loss of investment, jobs, certainly this entire industry becomes uncompetitive. Listening to the key spokesperson for the German Automotive Industry, he made clear Germany are willing to cut off their nose despite their face in terms of the rigid application of EEA rules.
So what do we do?
C. Pharmaceuticals - as a resident of Cambridge I can tell you that the likes of Astra Zenica are already back peddling on commitments to huge UK investment since the result of the referendum. They are not prepared to stomach WTO rules and of course, the blunting of their competitive edge is unavoidable, should we pursue this ultimate route.
So what do we do?
D. Technology Sector - this is a remarkably nimble area of the U.K. economy and I speak from personal experience when I say that many of these businesses both large and small, can in a matter of days (I'm serious - days) would be able to up and move sticks should the need arise based on the outcome of negotiations.
So what do we do?
Jeremy Hunt has already alluded to a further referendum to approve which ever option we negotiate, be that via a General Election which would be a single issue election, approve or not approve or indeed another referendum, expressly for the same purpose.
So, my friends, the issues are huge and distil down to one big question - What Do We Do?
Do we press on remorselessly with a WTO option and face the prospect of destroying our Financial Services Sector, our foreign automotive investment, Pharma pull back and relocation and mass movement of our Tech sector at a moments notice, but be truly free of the EU?
OR,
Do we negotiate the best we can, substantially protect our economy and services, but accept all the conditions we currently operate under, massive financial contribution and the 4 movements including people with NO say and begrudgingly lick our wounds?
Our options are clear to me and we must make our choice as a unified sovereign state, but the cost either way is exorbitant!
Sent from my iPad using DCUK Forum
"EU - In or Out + Poll. I've had another round of deep thinking ...well not that deep really... about IN/OUT whilst on hols this week.
So let's say Friday morning at 7AM the decision is OUT...Leave... What does it mean?
I know, I know you all think "Potts has finally lost it, he's gone bonkers" as Leave means exactly what it says in the tin!
Does it?
Leave triggers a 2 years negotiation to fulfil the democratic wishes of the people. Emmmm.
So what will that negotiation involve?
Well it will involve deciding what Leave means...seriously!
Do we step OUT completely and entirely and follow a World Trade Organisation model, negotiating our own trade agreements...maybe.
This is the nearest expression of what most of the population will think of when we say LEAVE.
But of course at the end of the 2 years negotiation with Europe, the negotiated agreement will have to go through our parliament for approval.
So with a Conservative government with a majority of just 13, is it likely that Labour, Lib Dems, SNP and 50% of the Cons (all of whom wanted to Remain) will agree to this definition of Leave....doubtful. So that negotiated version of Leave may very well struggle to be approved.
Or we could end up at the end of 2 years with a multitude of variations upon what Leave means.
Nearly all the rest will include access to the Single Market or a variant... And guess what that will involve...a LARGE financial contribution from the UK to Europe and a commitment to the FREE MOVEMENT of people, but without any say... We will have Left.
How will parliament feel about getting one of those options approved?
Well I think begrudgingly , Labour, SNP, Lib Dems and 50% of Cons will approve it.
But the rest of the electorate, we'll be confused and angry and could there be blood on the streets? I don't know, but I can envisage some irreparable fault lines occurring in party politics.
So my friends... Just chewing the fat ... If we Leave... If we are OUT Friday morning, what does that mean? "
Having broadly seen the position we now find ourselves in, I've been thinking some more and have a few more observations:
1. What will the final model of out look like? It will broadly be one of three options, nuisanced by our specific negotiations:
- access to the EEA (European Economic Area) which is like being part of the Single Market, paying a contribution of similar or more than our existing contribution, abiding by EU laws, observing the 4 freedoms (capital, goods, services & people), non tariff access, no decision making powers within the EU. This is probably what most economists/ finance sector hope for, but in my opinion would be the most unlikely to occur as there would be uproar from the electorate (Leavers).
- access via what is called an Associate Agreement. A watered down version of EEA, with more restrictions and still some form of free movement of people.
- access via WTO (World Trade Organisation) rules. This is likely to satisfy the will of the electorate (Leavers) more than any other options, but would involve tariffs. For example it is on this basis that the USA trades with the EU and they face a 10% tariff on automotive imports from the USA. This would be the most economically disastrous model for the UK.
2. I have 4 observations each of which are critical to our exit and each of which will impact one way or another on these variants:
A. The Financial Services Sector - we are the 500lb gorilla of Europe for this sector and for us to continue to dominate and even continue to operate in a strong position, we absolutely need free and unfettered access to the EEA. But I've explained the costs and social implications above.
So what do we do?
B. Automotive Industry - we have a high level of committed foreign investment in this UK industry (Nissan, Jaguar/Land Rover etc etc), quite literally billions of £s of investment. What happens if WTO rules apply and even modest tariffs of the likes of the USA come into force? Loss of investment, jobs, certainly this entire industry becomes uncompetitive. Listening to the key spokesperson for the German Automotive Industry, he made clear Germany are willing to cut off their nose despite their face in terms of the rigid application of EEA rules.
So what do we do?
C. Pharmaceuticals - as a resident of Cambridge I can tell you that the likes of Astra Zenica are already back peddling on commitments to huge UK investment since the result of the referendum. They are not prepared to stomach WTO rules and of course, the blunting of their competitive edge is unavoidable, should we pursue this ultimate route.
So what do we do?
D. Technology Sector - this is a remarkably nimble area of the U.K. economy and I speak from personal experience when I say that many of these businesses both large and small, can in a matter of days (I'm serious - days) would be able to up and move sticks should the need arise based on the outcome of negotiations.
So what do we do?
Jeremy Hunt has already alluded to a further referendum to approve which ever option we negotiate, be that via a General Election which would be a single issue election, approve or not approve or indeed another referendum, expressly for the same purpose.
So, my friends, the issues are huge and distil down to one big question - What Do We Do?
Do we press on remorselessly with a WTO option and face the prospect of destroying our Financial Services Sector, our foreign automotive investment, Pharma pull back and relocation and mass movement of our Tech sector at a moments notice, but be truly free of the EU?
OR,
Do we negotiate the best we can, substantially protect our economy and services, but accept all the conditions we currently operate under, massive financial contribution and the 4 movements including people with NO say and begrudgingly lick our wounds?
Our options are clear to me and we must make our choice as a unified sovereign state, but the cost either way is exorbitant!
Sent from my iPad using DCUK Forum
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