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Brexit Thread VIII: Taking a penalty kick-ing

Discussion in 'Off-Topic' started by tjs282, Nov 1, 2019.

  1. Hrothbern

    Hrothbern Deity

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    For all those who believe that the UK will do fine in a WTO relation with the EU and other countries.

    I mentioned it in several posts on Brexit and Trade War threads: Trump is disassembling the WTO, using as prime stick blocking appointing new judges in the dispute court.
    In 3 weeks, on Dec 10, the WTO will be faced with the situation that it cannot handle disputes anymore as they used to do it.

    From Politico

    https://www.politico.eu/article/the-end-of-world-trade-as-we-know-it/
     
  2. Arakhor

    Arakhor Dremora Courtier Moderator

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    What a surprise that Trump wants to cripple the WTO, given his propensity for throwing around tariffs every time he feels slighted.
     
  3. Hrothbern

    Hrothbern Deity

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    If he likes to use his Art of the Deal techniques the way he wants to, the way the Senate allows him... that is up to him and the US.
    America First in only bilateral negotiations.

    But he is dragging the WTO down and with that the common ground for all the smaller countries to have at least some basic general agreements in place where they add their trade deal specifics in a structured fashion.
    The EU has made FTAs now with so many trading partners, that that WTO vacuum will not hit that hard.
    But the UK will be confronted with that vacuum... it will be cold there.
    The Law of the Jungle.
    Thanks indeed to that buddy of BoJo.
     
  4. innonimatu

    innonimatu Deity

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    What "fair competition for private enterprises"? Today the ECB has its pet ratings corporation rule on the suitability of corporate bonds to be bought into its portfolio. The ECB effectively decides which corporations get cheap (as in zero interest rate policy...) money and which don't. And who does it? What individuals do it, who elected them, and to whom are they accountable?

    I will take 28 countries individually deciding on whom to subsidize within the country and accountable to their citizens, over an opaque bureaucracy doing it.

    "Fair competition" does not exist, never existed and never will exist. It's a political fiction used to justify power grabs within the EU. There is always someone's hand setting up and enforcing the "fair" rules that are anything but fair.

    Good riddance to the WTO. And let's be honest: there are two and only two countries inside the EU that massively benefit from international trade: the Netherlands that set itself up as the trade depot for the center of the region, and Germany that has long nurtured a strategy of being the center of a continent-sized "value-chain", in a position to control it. The gains of these are bought (in trade treaties) at the expense of losses for the others.

    The UK has had net negative impact from the kind of trade deals that the EU has been striking. And from intra-EU trade.
     
    Last edited: Nov 21, 2019
  5. Yeekim

    Yeekim Deity

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    I'm not sure which idea is crazier - the idea that ECB bond purchase program represents primary access to capital markets or that creditworthiness of private corporations should be decided by voters.
     
  6. AmazonQueen

    AmazonQueen Virago

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    And back to the GATT. For all its faults WTO has been fairer to small countries than GATT, one reason why Trump hates it.
     
  7. EnglishEdward

    EnglishEdward Deity

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    Thank you for posting that link. I am not at all worried if the WTO ends.

    Let us be clear. I have not supported the WTO relation because I believe it is the best,
    but merely accepted it as an interim arrangement being the post Brexit legal default.
     
  8. Hrothbern

    Hrothbern Deity

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    WTO does not only protect smaller/weaker countries because there is at least a frame of rules and regulations...

    It also protects smaller companies when trading with bigger companies (when it is international trade).
    Big companies have already the upper hand in the negotiation with pushing strangling trading Terms and Conditions and the dispute settlement in a court of their country, backed with a strong bigger legal department.

    Without WTO international trade is a jungle for big corporate trampling small companies that will be less inclined to engage in that environment.
     
  9. EnglishEdward

    EnglishEdward Deity

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    Small companies can respond to those risks by using limited liability laws and, if
    necessary, going into liquidation and re-constituting themself under a new number.

    The problem is with individuals as purchasers and I know full well that the
    WTO won't help me if I get into a legal dispute with Microsoft or Amazon.
     
  10. Hrothbern

    Hrothbern Deity

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    I did not talk about giants as Microsoft or Amazon. I did not talk about fossil corporate, chemical or pharma.
    I did talk about small companies of typical size 0-100 employees trading B2B with typical size 500+ employee companies (or smaller but with more international coverage). A substantial part of the trade that is also often the crossbreeding part where new techs and products improve the productivity of the buyer and the buyers'country.
    Without WTO much of the B2B trade, the components, the partial services as part of the chain, the niche (and newly innovated) products, exactly that part of the trade that spreads knowledge, is going to be affected.
    What remains is moreover completed or almost completed products and trade between big companies.
    This will be of the advantage of bigger countries and trading blocs who have a domestic market where small trade can move frictionless, also regarding legal liability aspects.
     
    Last edited: Nov 25, 2019
  11. EnglishEdward

    EnglishEdward Deity

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    Thank you for your explanation.

    I dare say there may be some impact on those sorts of trades.

    But from my perspective WTO limits what governments can do to offset
    the power of the larger corporates, so it is very much a double edged sword.
     
  12. Hrothbern

    Hrothbern Deity

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    yes
    it is a double edged sword

    That's always the problem with logic talking
    "How do you add up the upsides and the downsides ?"... How do you quantify effects ?

    My reference on the effects is roughly 4,000 Dutch companies in the metal industry. Most of them in that 0-100 employee range. Customers of the company where I started my first real job. Always contact about technical advice and the quotes. Many visits. Lots of talking on the prospects of their products incl export (a lot was niche). When that family company was taken over by a multinational, my area widened to many more countries, but the way of thinking of customers there was mostly the same.
    If that hurdle gets too high from too many unknowns, from too much time-consuming negotiations and uncertainty, there is lower hanging fruit elsewhere.
     
    Last edited: Nov 25, 2019
  13. innonimatu

    innonimatu Deity

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    Extended international value chains and not a good in itself. You favour greater ease of doing business internationally, and argue that whomever makes it easy wins.

    But there is a reverse to that. Those who choose to work for international value chains inevitably get intertwined with what happens abroad. The more they do so, the greater the dependence on both suppliers and customers, the greater the exposure to changes thy had nothing to do with. "International shocks".

    Some trade is necessary always, this exposure cannot be avoided. But it can be managed: encouraged or discouraged. More or less of it. What the trade agreements favour is more of it. The arguments for that are old, they go down to Smith and Ricardo. Some are good arguments, others were dishonest even then. My point here is that this increased exposure is a balance between advantages and disadvantages, a political choice. The business owner probably wants it: more business or more profitable, otherwise that owner wouldn't do it. But it can lead to change of focus for the business, change future investments to satisfy the newfound market. New employment is created but other creative investments foregone in order to make those that satisfy the needs of the international value chain.
    The same foreign clients who procure this business are quire able to shift it elsewhere if conditions change. The foreign same suppliers will supply someone elsewhere. "if the hurdle gets too high"... There are also disadvantages, risks, to this bet on more trade. Exposure to uncontrollable policy change of foreign governments, to direction changes of foreign corporations. Isn't that what the Netherlands fears now, regarding its trade with the UK? I get what @EnglishEdward means.

    The UK is historically a "free-trader". It has pushed first the "free trade" in goods, then (but for a brief episode of imperial preference) the "free trade" in services and finance. I don't think they need lessons about how good free trade is, they invented those lessons. Perhaps their problem is that they had too much of it already. They don't lack either capital or population and could do with a shift towards focusing on national needs and years of under-investment on those.
     
  14. Hrothbern

    Hrothbern Deity

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    Trade for the sake of trade is no good, just like GDP growth for the sake of GDP growth is an addiction.

    But considering the overwhelming desire of consumers to have access to more goods and more choice between goods we are on that rollercoaster.

    Scale size of the country, as I mentioned so often, a paramount factor in the amount of international trade as % of GDP.
    The international trade of the US is around 30% of GDP, but if you add interstate trade to it you get roughly 100% of GDP, similar to the 100% of the EU.
    A small country like Czech Republic is at a trade of 150% of GDP. The Netherlands, bigger but also the continental port (Rotterdam) to the Rhineland area, also at 150%.
    If Lisbon would be at the mouth of a big river that would cover logistically most of Spain, the trade as % of GDP for Portugal would have been much higher than the current 80%.

    Small countries do not have their own car industry and have to import. Consumers in a country will not restrict their freedom of choice to only that brand of car that is being produced in their own country. Some manufacturing chains are such that whole economic sectors have become inter-continental trade: TV sets are imports out of Asia.

    What happened in the past decades is an explosion of material prosperity for consumers who seek as well personal identity by a wider choice of goods and services.
    The freedom of choice for example in a supermarket a big multiple of the original choice in a grocery of 50 years ago. Dozens of types of bottled water imported from many regionsand countries.
    Madness indeed with detrimental effects on climate and capital flows.

    Like with so many things: the genius is out of the bottle.
    What is left over to do is control-regulate the sharp edges away with governing efforts.
    But to really change it, you need to change the mindset of the consumers and voters
    (or could you already say that voters are not only already treated by politicians as consumers of the democracy as product, but have allowed themselves to transgress into those consumers ?)

    Any supranational agreement will BTW be nothing more than a formalisation of the status quo powers after the usual bargaining.
    All the charters of medieval time, the proto constitutions and later the constitutions are nothing more than that: the formalisation of the power status quo.
    But never the less they protected the weak because the abusive arbritariness of the ones with the most power was controlled.

    The UK is indeed a champion of the free trade ideology... even more so than the US.
    But the UK is not as strong anymore as in the time of Queen Elisabeth I and Queen Victoria to benefit from that roque position.



    Here BTW a nice lecture of Sir Ivan Rogers of November 25 onthe Glasgow university where he trashes the statements of BoJo that it will be easy to realise a trade agreement with the EU before December 2020.

     
  15. innonimatu

    innonimatu Deity

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    I understand your arguments about trade and scale, and more controlled trade of course cannot mean the pursuit of autarky. Not even in the larger countries.

    But how much of this increased trade, this increased choose, was really pushed by the consumers of stuff on the market? How much would be sold without the bombardment of advertising? Either businesses are irrationally spending increasingly huge amounts of money on unnecessary advertising, or this "consumer demand" is really an unnatural product of psychological manipulation? Shouldn't it be opposed?

    I never really got consumerism, it kind of bypassed me. The level of stuff I had in the 1980s is quite enough for me. Bloody convening to have my clothes washed automatically, but I can handle the dishes... I don't need a wall-sized TV, I can simply watch it closer. The internet is convening but I don't get the huge demand for real-time video and always-on chat. The variety of food along the seasons is better than the same stuff continuously, imported from the other hemisphere. "Nutrition" fads are just that. Tap water is very much convenient and safe, no need to carry around bottles - that is going backwards. Public transportation lets me think about other things instead of paying attention to the road. Etc.

    What the hell do all the new choice of goods and services offer that supposedly could make my life so much better? Experiences? I have hundreds of thousands of people nearby, each a treasure trove of experiences if I but take the trouble to get to know them, I don't need to travel a few thousand miles for experiences.
    Lets be honest, consumerism of both goods and experiences, services, is all about the dick-measuring contests with peers. That is what I have seen around: do this or have this, photograph it and post it for the world to see. See what others have posted and copy it. Spend your life either feeling inadequate or trying to make others feel inadequate. This is supposed to be a better life through increased choice of goods and services?

    The absurdity of it was noticed and discussed some 50 years ago in Europe, starting in the most prosperous countries. You know it, you're old enough to remember it probably. Sterile needs, mounting damage for nothing. It it worth defending? Why not simply downsize it? Allow trade to be reduced in these "Veblen goods for the middle classes" and see what happens. No one will starve or suffer damaged health. Hell, many people are confused and stressed due to excess of "choices" already, it'll probably improve mental health overall! Perhaps people will notice that they have neighbors if they don't sod off to distant cities every holidays they get. Perhaps they'll bother doing new "experiences" (art, whatever) in their own cities instead of seeking it abroad.

    Was the present really a result of conscious choices by voters? I don't recall any of the foreign "trade deals" done by the EU being put to referendums. The EU itself was several times, with... mixed results.

    Perhaps some of the people who voted for Brexit in the UK are as skeptical as I am of the alleged benefits of increased trade. Not deceived, not ignorant, but making a conscious choice that less is more. That in order to have more done locally, in order to be able to do more in their own lives, they need less long-distance dependence relations.
     
    Last edited: Nov 29, 2019
  16. uppi

    uppi Deity

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    So the House of Commons has finally ratified the exit agreement. This means that the UK will be out of the EU end of January - technically at least. After that there will be 11 months of a transition period in which the UK must negotiate some kind of trade agreement or face a hard Brexit after all (while still having to fulfill the obligations from the exit agreement). The UK government has (once again) sabotaged their own negotiation position by excluding an extension of the transition period by law. Which means that there is a good chance of another drama in one year.
     
  17. Hrothbern

    Hrothbern Deity

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    Whereby noted that Big Finance does believe that a further extension of the transition period after Dec 2020 is still a real possibility.
    After all... Bojo can have his law to outlaw extension passed now, but just as easily make a new law in 2020 to allow extension again.
    Just imagine... a strong and stable government just making laws to satisfy the tabloids, to make smoke and mirrors for negotiations with the EU...
     
  18. Senethro

    Senethro Overlord

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    So basically, regardless of the January 31st date, nothing happens until it all happens and we could still be here in 3 years?
     
  19. Arakhor

    Arakhor Dremora Courtier Moderator

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    And this time I think that even the Fail and the Excess will struggle to cast the ensuing chaos as yet another devious Remainer plot. (I'm mean, I'll be surprised if they don't try, but...)
     
  20. Hrothbern

    Hrothbern Deity

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    Estimated likelyhoods are not high but between 10-30% according to financial specialists.

    And yes
    Just as during that long May period... nothing really happens and happened regarding that uncertainty of cliff edge or extension and perhaps perhaps a deal.
     

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