Debate Magazine

"Impact of Brexit on Businesses in the UK" NOT

Posted on the 04 May 2017 by Markwadsworth @Mark_Wadsworth

A delightfully misinformed and illogical bit of fear-mongering from Market Inspector:
There are Brexit campaigners who have optimistic predictions for Britain and its businesses. But there are still many sceptics who predict that this has been a big mistake for Britain, and that it will be seriously impacted by multiple factors.
So, how can Brexit affect businesses in the UK? You may be doing business in the UK, but most of your raw materials come from, let’s say Germany, for example. Since free trade between UK and EU will no longer be prevalent, the costs of your supplies hike up...

Only if the UK imposes tariffs, and let's hope it doesn't. Germany doesn't sell much in the way of raw materials, it sells high-end and finished products so that's a non-example. Of course, even with low-ish tariffs, the cost of goods from the rest of the world will go down, so that's a win for manufacturers overall.
According to statistics, in 2015, the UK exported £133 billion worth of goods to the rest of the EU, which is almost equal to half of global goods exports. It is predicted that the UK will experience a loss of at least £4.5 billion a year, if they leave the EU without negotiating a new trade agreement with the EU.
Let's go with that estimate, will UK exports to EU fall by three or four percent? Seem plausible. The key is to make up the difference be selling more to the rest of the world, GBP has fallen since last year which will help UK exporters achieve that.
This could take a major hit on export businesses in the UK, as their costs will hike up with the increased tariffs.
It is up to the UK to impose import tariffs, which would be pretty stupid (i.e. the UK government will probably do it, but we can't blame that on the EU).
It will result in UK businesses being less competitive in the EU markets and globally, as well.
Where does that come from? It's difficult to criticize something that is wrong on so many levels, first of all we'd have to guess what his trail of logic is. Surely, our trade with the rest of the world will not be affected in the slightest? Imagine Malaysia left ASEAN, would we even notice?
The European Free Trade Association (EFTA) was formed in 1960, which the UK was a founding member. If the EU decides to change policies after brexit, it could mean that the UK will lose its access to the single market.
Not sure what EFTA has to do with it. What's all this about losing "access to the Single Market"? A bit like the Chinese, Japanese and all those other major economies with whom the EU has no 'free trade agreements' (yes. it's an oxymoron)?
In a period of 2 years between the Brexit decision and the actual exit of the UK from the EU, the UK must negotiate free trade agreements with the EU and other countries globally.
No it doesn't have to, it's not going to happen in two years if it ever does, we don't need 'free trade agreements' to trade with people, look at the bloody map! And FWIW under normal grandfathering rules, the UK will almost automatically enter into new free trade agreements with South Africa, Mexico and Chile (the only ones of note, Greenland, FFS) on the same terms and conditions.

Economists estimate that Britain will be at a loss equating £75 billion, if they are excluded from the single market.
The first estimate of £4.5 billion lost trade seems uncontentious, the French will see to that. All of a sudden, they've multiplied it up by a factor of twenty. How? Why?

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