Brexit: New VAT rules see EU cycling brands stop online sales to UK shoppers

A lot of bad losers here, still not over Brexit, which was a long, long time ago, poor diddums.

...it affects some people more than others, and some disproportionately. You must undertand that?

The referendum was a long time ago and in all these years you still haven't understood that it wasn't a football match.

The head office of the company I used to work for has moved to Bruges.  I say "used to work for" as I have been made redundant as a direct consequence of Brexit.  I no longer have a job and a prospective future trade deal isn't going to feed my kids.  This isn't a win for you, me or the UK.

I don't particularly want to 'like' this post, given the nature of your situation, but I do want to thank you for sharing it. Often we're too caught up in hypotheticals and overlook actual people,

Rich_cb wrote:

That seems a pretty biased source but there are some good points nonetheless. The conclusion that the UK will fall behind the EU economically seems directly at odds with the recent forecast from the Centre for Economics and Business Research which predicts the UK pulling ahead of the EU over the next few decades. Sacrificing some trade with the EU for greater trade with the rest of the world seems perfectly reasonable given growth trajectories and our own balances of trade. Now that the EU deal has been finalised we can pursue trade deals worldwide increasing our opportunities for growth further.

hmm I'm not sure the CEBR is entirely unbiased when it comes to brexit forecasting:  https://www.independent.co.uk/news/business/news/brexiteers-favoured-economic-study-shot-down-other-trade-economists-a7519596.html

Rich_cb wrote:

Sacrificing some trade with the EU for greater trade with the rest of the world seems perfectly reasonable given growth trajectories and our own balances of trade.

It's good to see someone who's not involved in international trade/travel, inward investment or cross-channel logistics (and not forgetting N.I. and Ireland) so optimistic about all those benefits we have been promised.

However, since EU countries are geographically nearest to our shores there is some difficulty believing that other more distant countries, with whom we don't have such close ties, will be so eager replace them. And how can they do that for things like perishable food products?

Rich_cb wrote:

Now that the EU deal has been finalised we can pursue trade deals worldwide increasing our opportunities for growth further.

Have we neglected that in the past? I don't think so.

With a global pandemic affecting so many industries and countries it's not easy to see where this magic money tree might be at the moment. But I genuinely admire your determined optimism, which we could all benefit from applying, to all aspects of our lives.

Is trade with the EU growing as a share of our overall trade or falling?

Is the EU's share of global GDP growing or falling?

Is that trend forecast to continue?

Do we run a trade surplus with the EU?

Do we run a trade surplus with the rest of the world?

Prior to Brexit the EU negotiated trade deals on our behalf so we were completely unable to negotiate UK specific trade deals.

We already ship perishable goods from Kenya, Peru and New Zealand to name but three I saw in Tesco's today.

As an EU member the UK it had good trade agreements with the majority of countries (the EU block gives it a very strong negotiating position, much stronger than the UK alone).

Yes the UK is now in a position to negotiate more bespoke deals but these are unlikely to compensate for loss of trade with the EU.

You are correct as well in that the main growth in the world is in countries such as India, Brazil, China, etc so as a world share the EU is getting less.  But the EU is stil the UKs main trading area, and will remain so for many years yet.

Germany does almost double the trade with India that the UK does.  So EU membership is not holding Germany back in trading with the rest of the world.

Germany is not necessarily representative of the whole EU. They benefit from an artificially weak currency so can trade more easily with almost anyone. The converse is true for most of Southern Europe.

The UK also does well in trade outside of the EU, this trade can be boosted by UK specific trade deals.

The UK is, even outside of the EU, a pretty big economy by international standards. 5th largest in the world. Tailoring trade deals to our own needs rather than the diverse needs of 27 other countries should make each trade deal far more beneficial to our economy than those negotiated by the EU.

Belgium has about the same amount of trade with India as the UK does.

Not bad for a country a tenth of the size of the UK.

Again it is not membership of the EU that is holding our world trade back.

That sounds rather like it is being distorted by the port of Antwerp (one half of the Rotterdam-Antwerp effect)...here's a reasonable summary: 

https://www.economicsonline.co.uk/Global_economics/The_Rotterdam_effect....

This is a common error.  

You can't say that definitively as we have only just left the EU.

Once we've been out for a while then you can compare our trade growth with that of similar EU countries both before and after Brexit and draw some slightly more solid conclusions.

The majority of economic analysis shows that leaving the EU hits the UK financially with the damage lasting for the next 10 years, probably longer.

It is happening now.  Good thread here from a Japanese/UK business consultant.  Japanese companies slowly shifting EU operations out of the UK and into the EU.

https://twitter.com/pernilleru/status/1347578900050808839

It is a very gradual drip, drip effect.  Many foreign countries invested in the UK for easy market access to the EU single market.

My previous employer moved a large IT project from the UK to Germany for similar reasons.  Project was part funded by EU grants so it could no longer be done in the UK.  No UK government replacement so the work just went.

Over the past 6 years I have worked for a few international and UK technology firms.  None of them saw any benefit to Brexit, only downsides.

Have those companies all relocated since the deal was announced?

It looks like they left during the transition period which is entirely understandable. No company likes uncertainty.

Brexit was always going to cause a short term increase in uncertainty but that period of uncertainty is now over.

Let's see how investment in the UK fares now that we have certainty.

Brexit is a long term change, to judge its success or failure after one week is a tad premature.

This is largely missing the point. Brexit was never about trade, otherwise we wouldn't have left the world's largest single market. Whether the EU is shrinking a bit as a share of the global economy is largely irrelevant when it makes up the majority of our international trade. You don't swap clear and present benefits with your largest partner for possible benefits in the future with some small partners if more trade is your aim.

Of course it was about trade.

Arguments about the single market were about trade.

Arguments about the customs union were about trade.

You don't think that adding a bit of paperwork and friction in one declining market is worth increased opportunities in multiple rapidly expanding markets?

I would disagree.

Trade with the EU is not going to power growth in the UK over the next half century, free trade with the rest of the world can.

Rich_cb wrote:

Of course it was about trade. Arguments about the single market were about trade. Arguments about the customs union were about trade. You don't think that adding a bit of paperwork and friction in one declining market is worth increased opportunities in multiple rapidly expanding markets? I would disagree. Trade with the EU is not going to power growth in the UK over the next half century, free trade with the rest of the world can.

Using comparative terms like 'declining' and 'expanding' is a bit disingenuous without including the relative magnitudes.

e.g. I could set up a business (selling tasty treats made from acorns) and 'sell' some to a family member. The next day, I could maybe give some away to a YouTube influencer and they'd make a video about how my customer base has doubled in a day. That wouldn't make investing in acorn snacks a necessarily wise choice based just on 'rapidly expanding'.

I think that's a bit unfair.

Should I have listed the GDP, average growth rate etc for every non EU country, the EU itself, the Eurozone?

The EU is a very large market but its share of world GDP is declining rapidly and large parts of the EU are essentially stagnant in terms of GDP growth. Add in demographics and the EU is not a good bet for the medium term and beyond.

Rich_cb wrote:

I think that's a bit unfair. Should I have listed the GDP, average growth rate etc for every non EU country, the EU itself, the Eurozone? The EU is a very large market but its share of world GDP is declining rapidly and large parts of the EU are essentially stagnant in terms of GDP growth. Add in demographics and the EU is not a good bet for the medium term and beyond.

Possibly. Using GDP is the easiest way to compare size of economies (and thus the approximate benefit of trade) whereas percentage growth is more commonly used for investments. Obviously, future trends should be taken into account, but doing lots of trade with a stagnant partner is still worthwhile compared to doing a bit of trade with a growing partner. I appreciate the benefit of getting a 'foot in the door' with growing economies, though.

I think 'foot in the door' is an appropriate phrase.

If we can establish better trading terms with multiple fast growing economies we can benefit from that rapid growth.

Our trade with the EU is likely to stagnate regardless of Brexit as the growth rates of those economies slow down (as is likely in advanced economies with ageing populations).

Sorry, to be more precise it was never about *improving* trade. You don't win a race by shooting yourself in one foot and telling yourself you'll be stronger for it in the long term.

What matters are the absolutes. We have added friction with over 50% of our trade. I hope I'm proved wrong, but I don't believe there's a hope in hell in making that lost trade up with marginal improvements in trade deals with the rest of the world (assuming we can manage that at all, which is far from given).

If we weren't interested in improving trade terms then insisting on reopening the withdrawal agreement to ensure the ability to negotiate our own trade deals was a bit of a waste of time.

I think a better, and far more appropriate, analogy is that of a bike change in a TT.

When you first slow down, stop, dismount, remount and accelerate you lose a lot of time to an identical rider who does not change bikes.

If your bike change goes well and the different bike gives you a sufficient advantage you will find yourself making up that lost time and more.

Brexit may be slightly disadvantageous in the immediate term but if the advantages are as large as many believe they will be then in the long term we'll be glad we changed.

I presume that these many believers include a majority of economists? The OBR? The IMF? The OECD? The Bank of England?

I'm not sure how they could have analysed the effects of trade deals that have not even begun negotiations yet?

Let's see how the trade negotiations pan out over the next few years. Then we can have an actual discussion rather than waste our time on speculation.

But your unnamed experts are allowed to believe there are large advantages?

You asked if a specific group of organisations had produced opinions on things that had not happened yet.

We know that free trade deals with countries outside the EU will boost the UK economy. That's what free trade deals do. It is therefore perfectly reasonable to believe that there are potential scenarios in which new free trade deals deliver significant advantages.

Until the deals are negotiated we will not know what degree of benefit there will be.

We also do not know exactly what impact our new trading arrangements with the EU will have.

We can speculate that the benefits of new trade arrangements will outweigh the impact on trade with the EU.

We can speculate that they will not.

We will be speculating in either case.

Your specualtion is no more valid than mine.

Yes, I'm asking for a specific group of organisations had produced opinions on things that had not happened yet. They're called projections and they're done all the time by serious economists and organisations such as the ones I listed.

They even have the foresight to do projections for a range of different scenarios, so that we can come up sensible policy decisions.

I'm not asking for *your* speculations, which are no more valid than mine.

And what specific projections are you asking for?

Anything that backs up your argument?

TBH, we should probably stop this now - I think we've both got better things to do and we aren't going to put the world to rights in a comments section of a cycling forum