The E.U.: Hell hath no fury

American Thinker ^ | Nicholas J. Kaster

[dp0622]

Just by the last line alone, I can tell you are much more familiar with this whole situation than me.

I did NOT even know there was a deal/no deal situation or choice.

This is not the Soviet Union (not that anyone could have EVER left).

Why would a sovereign nation need some kind of deal to leave the EU?

Excuse me weakness on the subject matter please.

[Cronos]

I'm familiar with this because I've got a lot of business with companies that are moving branches or whole operations from the UK to Poland :) -- thanks to Brexit uncertainty I've got a lot of business!

You ask Why would a sovereign nation need some kind of deal to leave the EU? -- to that I answer

1. If the US leaves USMCA, it needs to negotiate trade deals with how it will interact trade-wise with Canada and Mexico when it leaves, right? That's what the UK needs to do. It can leave with no-deal and trade on WTO terms, but that leads to
   
   
2. The UK manufacturing and financial services sectors are heavily, heavily integrated with the rest of Europe. It would be like North Carolina leaving the union -- there are factories etc in NC that rely on parts from other parts of the USA, and those are sent across without having to wait at state borders for customs. That screws up Just-in-Time manufacturing plans and would prompt many manufacturers from Nissan to Rolls Royce to just shift everything to the continent
   
   
3. The Irish border situation - that's a killer. The UK agreed to NO borders between NI and RoI. It can't renege on that - and the EU stands by its member Ireland on that topic. The UK should have planned for this, but they didn't. What did they expect would happen? The UK wants a hard border with the EU for people, but agreed not to have that for NI-RoI

[Cronos]

Those percentages were radically different before Britain joined the EU and could well shift back to other markets once Britain leaves.

-- not completely correct. Before Britain joined the EEC in 1973 it did only 25% with the continent. But

1. This was 46 years ago, the world has changed
2. the other trading partners it has have shifted to other partners -- Australia is not going to junk its trade with India and replace it with the UK for instance
3. Those other partners will now see how desperate the UK is for a deal and ask for better terms
4. After Thatcher, Britain de-industrialized. It has less to offer the other parts of the world. Even in financial services, in Asia Singapore, hong Kong and Dubai are far preferable

Its not like Britain was a poor country prior to joining the then European Community -- while it wasn't poor, it was poorer than other european countries -- Britain joined what was then the European Economic Community in 1973 as the sick man of Europe. By the late 1960s, France, West Germany and Italy — the three founder members closest in size to the UK — produced more per person than it did and the gap grew larger every year. Between 1958, when the EEC was set up, and Britain’s entry in 1973, gross domestic product per head rose 95 per cent in these three countries compared with only 50 per cent in Britain.

After becoming an EEC member, Britain slowly began to catch up. Gross domestic product per person has grown faster than Italy, Germany and France in the more than 40 years since. By 2013, Britain became more prosperous than the average of the three other large European economies for the first time since 1965.

The US can only offer something if the UK agrees to changing some of its rules -- and that's difficult. Consider the egg standards differences and you'll see why agreeing on a trade deal will take time

[dp0622]

Well you certainly do know a lot about the situation.

Sounds like you are quite successful too. Good for you :)

The state secession comparison was a good and useful one.

Thanks

[Cronos]

I know a little about the situation, not a lot. I don't particularly like the EU, but I see it has a lot of advantages - it has a lot of flaws as well, but it is not the evil empire portrayed by some of the media (neither is the gateway to heaven)

The problem is that there is so much distortion in the media these days

The British can walk away from the EU, but, like leaving a club you've belonged to for decades, it takes time to wind things down.

The UK could have handled it better -- in any way, leave, stay, half-stay. But it didn't - it's decided nothing and is still waffling.

I, personally, want the UK to have a hard Brexit - no-deal Brexit. I think this will cause pain to both the EU and the UK, but this is the only sensible option besides "cancel Brexit".

[dp0622]

The EU is portrayed as a One World Government, Germany run, tending to lean towards disliking America, group.

Not saying that’s what it is.

That’s what peasants like me who just get our info from the media think it sounds like :)

Is it something like NAFTA?

[bert]

Governments don’t engage in trade. Companies engage in trade.

Companies can continue to trade unabated by the fact the UK is not in the EU

Siemens or Bayer is not going to allow the government of Germany or the EU bureaucrats to demand plants in the UK shut their doors.

[Cronos]

Nah, none of the EU leaders even the most fanatical want it as One World government -- europeans like to call Americans racists, but quite a few of the sentiments are far more racist than anything state-side

Anyway, so it isn't One-world government - the EU has no intention of even inviting Ukraine or Turkey to join,leave alone the rest of the world)

It could have been Germany run - which is kinda ironic as originally the EC was used by France as a way to ensnare Germany and then Francois Mitterand agreed to German reunification ONLY if Germany agreed to join the EurO currency zone

The Germans try to lord it, but the Visegrad group have been opposing them - and we are pissed that the UK is leaving as the UK added it's weight to the group pushing against the Franco-German axis.

As to "tending to lean towards disliking America" - there isn't coherent policy on that. The Western Europeans like to thing of themselves as sophisticated etc. and look down on the Americans and Eastern Europeans. But there isn't a consistent policy

Your question about whether it is like NAFTA deserves more detail - in my post below. In short it isn't quite

[Cronos]

the EU is not NAFTA. It's something more than NAFTA but less than the Swiss Confederation and much, much less than the Union of States

The EU is at its heart a free market zone - you can work, sell goods & services and invest anywhere in the EU if you are an EU citizen or EU company.

To keep this free flow, the regulations on goods and services are standardized and that's where it's kinda like the US-lite.

To keep the standards there are tons of regulations - so that say electric goods ranked AA+ are the same whether in Louisiana or New York, oops Estonia or Germany

But for that there is an entire apparatus - the Senate (EU council of ministers -- the elected heads of government of each EU country) where every nation has one vote and decisions must be unanimous and the Congress (EU parliament) which is based on population.

There is the EU commission which is the source of the entire "run by unelected bureaucrats" - but it's not - there is one commissioner per country. These dudes talk a lot, but they can't DECIDE the vote. Their job is to GET the proposed bills from the EU parliament or EU council, WORK on it, create the bill, then send to the Parliament and Council to approve. That's it. They can't approve the bills etc.

I like CGP Grey's description

[Cronos]

Also, to add in, we all see things from the light of our own experiences. The “open borders” in the EU is nothing like open borders between the US and Mexico. Firstly - no one in the EU except extreme leftists wants open borders with the non-EU world. Secondly, this is meant to be between different countries that share stuff in common, again unlike the US and Mexico. Comparing the US and EU they have similarities but a lot of differences - like comparing the UK to the USA..

[FLT-bird]

Cronos: not completely correct. Before Britain joined the EEC in 1973 it did only 25% with the continent. But This was 46 years ago, the world has changed the other trading partners it has have shifted to other partners -- Australia is not going to junk its trade with India and replace it with the UK for instance Those other partners will now see how desperate the UK is for a deal and ask for better terms After Thatcher, Britain de-industrialized. It has less to offer the other parts of the world. Even in financial services, in Asia Singapore, hong Kong and Dubai are far preferable

How is it not correct? Britain's trade was oriented much more toward "the open sea" as Churchill called it than toward the continent. It could be again. It was hardly a catastrophe for Britain when it traded more with the wider world than with the continent.

We will see if Britain's trade offerings are not attractive in today's global marketplace. I suspect they will be. Also, like the higher tariffs President Trump imposed, this move may well bring some industrialization back to Britain.

Cronos: while it wasn't poor, it was poorer than other european countries -- Britain joined what was then the European Economic Community in 1973 as the sick man of Europe. By the late 1960s, France, West Germany and Italy — the three founder members closest in size to the UK — produced more per person than it did and the gap grew larger every year. Between 1958, when the EEC was set up, and Britain’s entry in 1973, gross domestic product per head rose 95 per cent in these three countries compared with only 50 per cent in Britain.

A lot of that was due to unreasonable demands by labor unions and by the British Government nationalizing all sorts of industries in the wake of WWII. Britain would have been a lot more successful had it not gone down the path of socialism and could be much more successful now so long as it does not give socialism another try.

Cronos:After becoming an EEC member, Britain slowly began to catch up. Gross domestic product per person has grown faster than Italy, Germany and France in the more than 40 years since. By 2013, Britain became more prosperous than the average of the three other large European economies for the first time since 1965. Britain started to catch up when Margaret Thatcher deregulated, privatized and broke the back of the labor unions - not because of trade with Europe. Britain continued to sputter in the 70s after joining the EEC so long as it kept trying to go down the road of socialism.

Cronos:The US can only offer something if the UK agrees to changing some of its rules -- and that's difficult. Consider the egg standards differences and you'll see why agreeing on a trade deal will take time

The US could offer some relatively generous terms for a limited time to give Britain a chance to negotiate more permanent arrangements. I'd certainly be willing to do that and I'd like to see it.

[Sa-teef]

"Governments don’t engage in trade. Companies engage in trade. Companies can continue to trade unabated by the fact the UK is not in the EU....."

Of course the companies can trade. But under WTO rules many high ticket items like German cars and machinery will be subject to UK import tax, making them less competitive than before.

I expect that once the UK is on firm ground as a free nation once again they will likely negotiate a limited free trade agreement, much as Canada negotiated with the EU. It is to the benefit of EU companies to obtain one in the future.

[Cronos]

#1 "How is it not correct" -- I said not completely. Britain's trade WAS oriented toward the open sea, but by the 70s its industries were lagging behind everyone else in quality - they were being trumped by the Americans, Germans, Italians, French even the Japanese.

#2 "it could be again" - remember that this is 46 years later. The world has changed. Britain doesn't have the industrial ecosystem to compete with the manufacturing powers. Britain has some quality makers, but these are tiny and not up to scale. It's financial services are huge, but oriented towards Europe. Asia now looks to singapore and hong kong, Africa and hte ME to Dubai and the Americas to Miami and NYC. It's like a newcomer coming into an established market without a winning product. Not impossible for them to change I agree, but an uphill task that requires strong leadership

#3 Britain's trade offerings are not attractive in today's global marketplace already. can you name any British-made product? Dyson is one, but it's moved to Singapore this month. They CAN change, but they need the leaders which they sorely lack all around.

#4 "a lot of that was.." -- you are correct about the causes. But the problem is that it wants to give socialism, nay communism, a try - look at Corbyn's support and even the Tories are to the left of the Democrats

#5 Not completely - the upturn already started in the late 70s before Maggie came along. Maggie definitely did accelerate it, yes

#6 "The US could.." -- it could, but it hasn't said anything concrete.

[Cronos]

#1 "Under WRO rules..." -- the problem with this is that the UK manufactures so little these days and most of its manufacturing depends on or is part of a Western European manufacturing Just in time ecosystem. Take car manufacturing - you may have the Nissan cars assembled in England, but shipped to Belgium for painting, and getting parts from Germany, poland, france, czechia, attaching seats built in Spain from Italian leather. putting up barriers slows it down.

#2 "they will.." - you are correct. This will be agreed on I expect quickly

The problem is that the UK or rather it's leader don't KNOW what they want. May is fumbling. If she decided one way or the other and prepared, implemented plans, it could work. But she hasn't done a dang thing.

Look at the Irish border problem - she knew about it - that there cannot be a hard border between RoI and NI, that a no-border policy would be against many of the hard Brexit plans. But she didn't think of any idea for the past two years

[Cronos]

Yes, companies and individuals trade. But what if the company has to follow different standards in different countries? And for Siemens or Bayer, they will continue to sell their finished products to the UK under WTO rules. The price for the Brits will be higher, but that’s the rules

[FLT-bird]

I attribute Britain’s economic underperformance though the 70s to stroppy labor unions and socialist economic policies adopted in the wake of Labour’s big electoral victory at the end of WWII. They nationalized damn near everything. No wonder their performance was crappy. Yes, that coincided with a time when Britain’s trade was more oriented away from Europe but the latter fact was not the cause of their economic underperformance.

They did better after joining the EEC, true.....but not because of joining the EEC. They did better because Margaret Thatcher dismantled much of the post war socialism and broke the backs of several of those labor unions.

Britain’s financial services offerings are among the strongest in the world. Its true they don’t manufacture as much as they used to but that is true of most Western countries. I’ll freely admit I don’t know that they will necessarily prosper more by going independent - I do think that a possibility though. I also think there are huge risks in staying in an EU that looks like its headed for the rocks with an unsustainable social welfare state, deathbed demographics, a complete inability to integrate the millions of 3rd world scum pouring in, massive bank debts still on the books from 2008 and increasing political tensions within the union.

As for the US, I think they’re not going to announce anything publicly or even let on that they’ve talked much about it so long as negotiations are ongoing with the EU.

[Cronos]

I attribute Britain’s economic underperformance though the 70s to stroppy labor unions and socialist economic policies adopted in the wake of Labour’s big electoral victory at the end of WWII. They nationalized damn near everything. No wonder their performance was crappy. -- and in my opinion you are correct

Yes, that coincided with a time when Britain’s trade was more oriented away from Europe but the latter fact was not the cause of their economic underperformance. -- I didn't say that. what i did say was that the UK was underperforming before it joined.

The political situation now is similar -- socialist leftist idiots all around.

They did better after joining the EEC, true.....but not because of joining the EEC. They did better because Margaret Thatcher dismantled much of the post war socialism and broke the backs of several of those labor unions. -- and this is where I partially disagree with you -- I believe it was both that helped them perform

Britain’s financial services offerings are among the strongest in the world. -- that was true until recently. now NYC, Singapore are pulling slightly ahead. A Financial center works best when it is connected to large markets -- case in point NYC-USA and Miami-Latin America and HK-China. The UK is cutting itself off from EU which is bad for its financial companies

but that is true of most Western countries. -- not really. Germany, Italy, France, even the USA manufacture a lot -- jobs may be lower due to automation, but the total value of their manufacturing is as robust as ever

They COULD prosper post a hard brexit IF, IF, they have strong, capitalist, open leaders.

.

They don't

.

May is pathetic and Corbyn is worse. The British public want socialism and the youth want even more Corbynism

[Cronos]

I also think there are huge risks in staying in an EU that looks like its headed for the rocks with an unsustainable social welfare state, deathbed demographics, a complete inability to integrate the millions of 3rd world scum pouring in, massive bank debts still on the books from 2008 and increasing political tensions within the union.

But the EU doesn't have a social welfare state. Different countries in the EU have social welfare states and one of the largest social welfare programs was/is run by the UK

Deathbed demographics. I don't see this as deathbed. The growth has reduced, but the job requirements are reducing as well -- when I look at the high levels of automation in Italy and others, it is no doubt there are far fewer jobs -- the migrants with no skills end up selling tourist junk and looking to get to GErmany (as Germany has a welfare state) --

Now this isn't that dire both in comparison to job availability and to other areas of the world. The EU doesn't need more immigrants for filling jobs - we are automating more and more.

"Inability to integrate" -- that's Germany's problem. Germany has tons of welfare which is why, even when Poland took in a few dozen syrians, they all went to Germany within months.

[FLT-bird]

As for the inability to integrate.....its not just Germany. Look at France and Belgium and Sweden and Italy and the Netherlands and Denmark too. They don’t integrate, live off the public dole and then act aggrieved and demand the locals conform to them.

As for Britain, I hope your pessimism will prove unfounded. Younger naive idealistic people often have a fondness for socialism. They tend to become far less enamored of it as they grow older, get jobs and start paying taxes. I hope the same thing happens in the UK and happens again in the US like it did before.

[Sa-teef]

"Yes, companies and individuals trade. But what if the company has to follow different standards in different countries? And for Siemens or Bayer, they will continue to sell their finished products to the UK under WTO rules. The price for the Brits will be higher, but that’s the rules"

Differing standards between countries has been an issue forever. It's not a new phenomenon and companies like Bayer are well versed and skilled at overcoming these issues. In the very short term consumers will pay more while the government collects import duties. In the intermediate term companies within the UK will innovate and produce products which are attractive to the consumer. In the short term in America consumers pay a higher price for the imported Chinese steel and in the mean time US steel mills are re-opening.

I have an older brother who was a chemist working for 3M back in the 60's when I was in high school. They expanded aggressively into the European markets when they still had differing packaging and labeling standards. Sometimes they built local manufacturing facilities or contracted with local companies to product their products. These issues aren't a major hurdle for innovative companies who are looking to sell their products.

=================

While their were differing opinions on the wisdom of standardizing within the EU, the Brits will be a free nation once again after Brexit and setting their own immigration rules and be making their own social welfare decisions.

Free trade in products and services was a great idea within the spirit of the Common Market. The all powerful social welfare notions of the globalist led EU will be their ultimate destruction.