Brexit: The fallout

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You've been taken in by the fish argument Keith. Fish is worth less than pornography to the UK exchequer. It's only of totemic significance. 

 

The question is, when tariffs are applied to British fish (remember most species caught in UK waters are not consumed in the UK but exported to the EU) what will happen? The price will rise in Spanish supermarkets until it is no longer viable and then British fishermen will be looking at reduced profit margins to bring the price back down to a level the Spanish consumer is prepared to pay for some fish that you couldn't force the average Brit to eat at gunpoint.

 

Ultimately a lot of fish will simply go uncaught which is exactly what was happening in Irish and British waters before the common market. Happy days for the fish.

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I would have thought the EU will buy its fish from other EU counties or EEA like Norway and Iceland

 

While fish, contributes a very small amount to the economy,  it was a massive issue for the referendum, if Boris backs down on fish he will probably have to face the public anger. Same for france they are adamant that if there is no deal on fish then there is a no-deal.

 

 Its going to be difficult to square this one, without one side or the other losing face.

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13 minutes ago, murphaph said:

You've been taken in by the fish argument Keith. Fish is worth less than pornography to the UK exchequer. It's only of totemic significance.

 

It was said in jest hence the laughing emoji! Anyway you are forgetting that it all works both ways, British fish is too expensive for the Spanish and Spanish Tomatoes are  too expensive for the British, balance will be found.

 

1 hour ago, murphaph said:

Yes, the CAP provides an artificial floor in prices and works against 3rd world producers but the EU and its predecessor organisations decided in the aftermath of WWII that

Europe should be self sufficient in food production and that is the primary purpose of CAP.

 

If you mean by "its predecessor organisations" the 6 founder nations that signed the treaty of Rome then I think you will find the CAP was much more about protecting small, inefficient and unviable French and German farms from international competition and giving money to the Italian mafia for bogus olive oil production than making Europe self sufficient in food production. I believe it may not be a bad thing for the free market to become a little more involved in farming.

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Just now, keith2011 said:

It was said in jest hence the laughing emoji! Anyway you are forgetting that it all works both ways, British fish is too expensive for the Spanish and Spanish Tomatoes are  too expensive for the British, balance will be found.

With the pound so weak, this isn't always a viable argument nowadays in any case. :)

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51 minutes ago, keith2011 said:

 

It was said in jest hence the laughing emoji! Anyway you are forgetting that it all works both ways, British fish is too expensive for the Spanish and Spanish Tomatoes are  too expensive for the British, balance will be found.

 

 

If you mean by "its predecessor organisations" the 6 founder nations that signed the treaty of Rome then I think you will find the CAP was much more about protecting small, inefficient and unviable French and German farms from international competition and giving money to the Italian mafia for bogus olive oil production than making Europe self sufficient in food production. I believe it may not be a bad thing for the free market to become a little more involved in farming.

Wikipedia is there for all to see and read at their leisure.

 

Indeed CAP does protect the more expensive European farmed food against cheaper imports from lower wage economies but then the EU would not have food security if it let its farmers go to the wall. It's a policy decision.

 

 

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59 minutes ago, lunaCH said:

With the pound so weak, this isn't always a viable argument nowadays in any case. :)

Interestingly fish is one of the few things that benefit from the weak pound as it's a raw material with no inputs. Most industrial or even food goods made in the UK require inputs from outside the UK, which have to be paid for with that same weak pound. Fish is an exception to the rule.

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14 minutes ago, murphaph said:

Indeed CAP does protect the more expensive European farmed food against cheaper imports from lower wage economies but then the EU would not have food security if it let its farmers go to the wall. It's a policy decision.

 

Without those subsidies don't you think EU farming would have become more efficient and commercially viable?

Also is it not hypocritical of the EU to demand a level playing field on industrial subsidies when it provides the agricultural industry with such massive support, why shouldn't the UK decide that their motor industry requires support, is that not also a strategic policy decision?

1 hour ago, lunaCH said:

With the pound so weak, this isn't always a viable argument nowadays in any case. 

Yep that is all  part of the balancing act, bad news for those of us receiving GBP fixed income and in that respect I fear worse is to come.:(

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2 minutes ago, keith2011 said:

Also is it not hypocritical of the EU to demand a level playing field on industrial subsidies when it provides the agricultural industry with such massive support, why shouldn't the UK decide that their motor industry requires support, is that not also a policy decision?

 

Support from whom? They are leaving the EU.

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12 minutes ago, keith2011 said:

Without those subsidies don't you think EU farming would have become more efficient and commercially viable?

Also is it not hypocritical of the EU to demand a level playing field on industrial subsidies when it provides the agricultural industry with such massive support, why shouldn't the UK decide that their motor industry requires support, is that not also a strategic policy decision?

 

Keith, the UK has left the EU and is now the by far weaker party in the trade negotiations. The UK is effectively asking the EU for the deal as it has far more to gain from it than the EU.

 

The UK can effectively take it or leave it. 

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1 hour ago, keith2011 said:

I believe it may not be a bad thing for the free market to become a little more involved in farming.

I do. Not only because food security is important but also because it would open the flood gates to imports from countries where there are much less environmental restrictions. You can´t expect farmers who are restricted e. g. by limiting the amount of insecticieds they can use to be as economically efficient as those whose hands aren´t tied behind their backs in that way. Just as you can´t improve animal welfare conditions without being prepared to pay higher prices.

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54 minutes ago, murphaph said:

Keith, the UK has left the EU and is now the by far weaker party in the trade negotiations. The UK is effectively asking the EU for the deal as it has far more to gain from it than the EU.

 

The UK can effectively take it or leave it. 

Murph at the moment it looks like they are going to leave it so it can't that good a deal. The Brexiteers have always said no deal is better than a bad deal, which just goes to show what a disaster Brexit is, even if I don't believe it is as totally negative as you do.

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3 hours ago, keith2011 said:

bad news for those of us receiving GBP fixed income and in that respect I fear worse is to come.:(

But what percentage of your income is in GBP? It's a bit risky to have a different currency as your main income which you rely on to that of your country of residence. Having said that I'm in that position too, but only partially and with CHF. a far safer currency, plus a good lot of my outgoings are in CHF anyway, so if there are heavy changes I've still some protection - which is especially important where property is concerned.

That aside, you (and other people) think GBP could drop further still? :ph34r: It's already crazy-low as it is. 

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6 minutes ago, lunaCH said:

But what percentage of your income is in GBP?

I my case just over a quarter.  Pensions.  No influence over that.

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19 minutes ago, HEM said:

I my case just over a quarter.  Pensions.  No influence over that.

A quarter, well unless your budget is tight, that's still alright. With pensions I guess it all depends which currencies they are in and where you choose to live. Brexit, general uncertainty, corona, the very weak pound etc. is all enough in some cases to hurt so much that people change their plans.

I know of people who have had most of their income in GBP and moved and/or retired in another country, but the pound is now worth so little that some have moved back to the UK or at the very least had to sell property. 

On the other hand when the pound is so low and you have a lot of your income in another (currently stronger) currency, it makes purchases of just about anything in the UK look really interesting.

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4 hours ago, murphaph said:

Wikipedia is there for all to see and read at their leisure.

 

Did you gloss over this part?

 

The CAP is often explained as the result of a political compromise between France and Germany: German industry would have access to the French market; in exchange, Germany would help pay for France's farmers

4 hours ago, murphaph said:

 

Indeed CAP does protect the more expensive European farmed food against cheaper imports from lower wage economies but then the EU would not have food security if it let its farmers go to the wall. It's a policy decision.

 

Excess production is dumped on markets of developing countries wreaking havoc on their farmers or simply plowed under.    

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7 minutes ago, balticus said:

Excess production is dumped on markets of developing countries wreaking havoc on their farmers or simply plowed under.    

https://www.theguardian.com/commentisfree/2018/oct/10/brexit-leaving-eu-farming-agriculture

Came across this purely by accident in google pasting the wrong search item and happened to see what it was about. 

From the comments: 

CAP has devastated Africa too, because it encourages overproduction in Europe, so European farmers (or the larger corporations who basically own them) have been dumping the mountains and lakes on African nations, selling the produce for below cost price, completely undermining local agriculture, which just can't compete.

CAP has destroyed self-sufficiency in these countries, and while we pride ourselves on our generosity in the financial aid we're sending them, we're basically giving them money to give it back to us.

The 2013 reforms coming into full effect from 2020 take with one hand and give with another. The change in the subsidisation (so that the most productive farms receive proportionally less) will have a negligible effect on overall production, and the dumping will continue - on Africa.

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Anyway the UK has left now so the British need not complain about CAP anymore as they won't be paying for it.

They can go WTO and subsidise whatever they like themselves or nothing if they deem so fit.

The overproduction of the past is long gone by the way. The EEC introduced quotas to prevent wine lakes and butter mountains. Nowadays any excess isn't likely to be dumped in Africa but sold to China!

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35 minutes ago, murphaph said:

The overproduction of the past is long gone by the way. The EEC introduced quotas to prevent wine lakes and butter mountains. Nowadays any excess isn't likely to be dumped in Africa but sold to China!

 

China is a much bigger market, but the dumping still has a detrimental effect on poor countries.

 

https://www.euractiv.com/section/agriculture-food/news/the-cap-has-devastating-effects-on-developing-countries-report-says/

 

Euroserfs will simply look the other or dismiss any criticism of their masters.  

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