
What to expect from a no-deal Brexit - stoon
https://www.economist.com/briefing/2018/11/24/what-to-expect-from-a-no-deal-brexit
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Findeton
Well, I'm kind of expecting that the no-deal scenario will actually happen.
Then a big economic crisis will follow, making it palatable for politicians to
actually endorse a new referendum. I'm not saying what the question in such
referendum would be, though.

And actually, this is the reason why some remainers are voting no to the
brexit deal, and it's not even a secret.

~~~
jstanley
Why would a big economic crisis follow a no-deal brexit?

~~~
simonh
Let me count the ways.

* All our manufacturing exports to Europe would suffer tariffs. 10% on cars for example.

* All our agricultural exports would be hit by tariffs.

* The legal basis for many of our financial services provided to Europe would disappear. Clearing for example.

* Imports and exports would suddenly be subject to customs inspections, introducing delays. No arrangements are in place for this.

* Many goods manufactured in Europe only count if a certain % of value comes from Europe. Parts made in the UK would not count anymore so European manufacturers using our parts would have to find alternatives. Cars are another big example, but there are many more.

* We would lose access to all the trade deals with non EU countries negotiated through the EU, which is (almost) all of them. E.g. the big new trade deal negotiated with Canada would no longer apply. Some minor trade deals through the commonwealth might survive, but it’s not much.

* We would probably end up defaulting on our €38bn obligations to the EU. Not as bad as a sovereign debt default, but not by much.

* Oh, and we’d probably also be in violation of our treaty obligations under the Good Friday Agreement, with unanticipatable consequences in Northern Ireland, except it wouldn’t be good.

So high end manufacturing and agriculture devastated, remaining trade
(globally) obstructed, financial services crippled, debt default, political
instability in NI. Some of those might be cushioned, but there’s no way it can
all be significantly mitigated in a few months.

My hope is some sort of keep-it-as-it-is-for-now deal could be worked out. But
that’s basically the May plan anyway.

~~~
xbmcuser
Many of the financial services/bank s have already moved out they won't go
back even if the actual brexit doesn't happen

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clarkmoody
_Some Brexiteers favour a radical response: get rid of all tariffs on imports,
as Hong Kong, Macao and Singapore have done. Extravagant assumptions about the
benefits of this explain why some pro-Brexit economists see no deal as much
less damaging than most of their colleagues. But tariff abolition would have
huge effects on agriculture and some types of manufacturing. The government
has no plans for such an extirpation._

Followed by no examination of the experience of Hong Kong, Macao, and
Singapore. Instead bemoans the "huge effects" on protected industries.

One could be forgiven for making the mistake of assuming that a magazine
called _The Economist_ would understand the benefits of free trade beyond the
EU and the harms of corporate welfare.

~~~
CPLX
How's the farming community doing in Hong Kong, Macao, and Singapore?

~~~
jstanley
Imposing tariffs on imports is classic protectionism - are you actually
arguing that that is a net benefit?

Of course the protected industries benefit from protectionism, the argument
against protectionism is that everyone else loses.

There is no reason that a transaction with a counterparty in Shanghai should
incur any more taxes than an equivalent transaction with a counterparty in
Manchester.

~~~
kennywinker
> are you actually arguing that that is a net benefit?

Net benefit to who? Global capital efficiency, people?

Jobs going overeseas to countries with lower wages and less
safty/environmental/etc. regulation has been a net loss for humanity... but it
has been a major win for capitol!

~~~
jstanley
Why is it a net loss to humanity if a person in a poor country does the job
instead of a person in your country? They're people too.

~~~
kennywinker
The lack of safety and environmental regulations, specifically.

Also the wages thing, but I understand that is a more nuanced issue, so let’s
set it aside for a moment.

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jdlyga
So, why do it? Should a razor thin majority in a public vote 2 years ago
decide the UK's policy forever?

~~~
Zigurd
The real problem is not majoritarianism, or democracy. The problem is that the
referendum should have been framed as "Start exit negotiations."

If it's not framed that way, it amounts to buying the outcome of a risky
multi-year process with a lot of downside risk and tens of billions in costs
sight unseen.

It is not antidemocratic to have a referendum on "Were the negotiations a
success?"

Nor does it make sense that if the UK parliament rejects the exit deal that
"no deal Brexit" is the only outcome. The UK can withdraw the notification
they will exit and remain and continue to negotiate. It adds some lead-time to
an eventual exit if that ever makes sense and can be negotiated before the
earliest date the UK can leave. But, in no way is it antidemocratic.

~~~
tomp
> The UK can withdraw the notification they will exit and remain and continue
> to negotiate.

Some EU leaders have eliminated that as an option.

~~~
jimnotgym
Actually this was being discussed in the ECJ today. The UK most certainly can
withdraw article 50 and remain

There is some dispute over whether they can do it unilaterally, but we will
find out when the ruling from todays case comes out.

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lifeisstillgood
One thing that recently struck me about Brexit was how much it represents a
"States Rights" problem.

Apart from the "ever closer union" of the EU (which frankly has to have fiscal
union once it has monetary union), Brexit has highlighted the unresolved
"states" or kingdoms of the UK - an English majority of voters is driving a
decision that every other state chose not to do. We don't have a balancing
Senate to defend smaller states (hell we don't have an elected second chamber
- in fact we have more unelected members of parliament than we do elected!!)

We do have a need to look at a constitution and upper chamber again - we have
a lot of things to sort out whatever happens with brexit

(basically brexit vote was the bit in the awkward family gathering where one
person shouts out "i never liked your ex husband" and suddenly all the
disagreements come tumbling out.

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hackeraccount
I expect a no deal brexit would create barriers for trade between Europe and
the EU. This would hurt people on both sides of the trade.

It's not like one side benefits - say the EU has a tariff on UK goods, who
wins? Neither. People in the EU pay more for UK goods and people in the UK
can't sell things to the EU. Same thing for the movement of peopole -
Europeans "lose" because they can't visit the UK - the UK "loses" because they
don't have people from the EU visiting.

The real action on this to my point of mind isn't economic that, in my view,
is simple. The action is political - in terms of how much sovereignty the UK
wants to hold on to and how eager the EU is to discourage other members from
leaving.

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sys_64738
Theresa May has actually found the straight line through this brexit chaos.
She knows in her head that the UK Parliament will vote it down and that
provides her with the platform to say she got the best deal possible but it
was rejected by the UK Parliament. She can then resign with her head held
high.

I think this is her exist strategy from the PM role in the UK.

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cletus
I think at this point we can safely say that the Brexit was a protest vote
against immigration that got out of hand (in that it got >50% of the vote) and
the UK is now left to pick up the pieces.

Look into this for even a few minutes and you'll come to a conclusion that
leaving the EU is a ridiculous idea.

\- The Good Friday agreement gives the UK the obligation to maintain an open
border with the Republic of Ireland

\- An open border with Ireland brings the UK into the EU customs union

\- The only compromise solution here is to include Northern Ireland in the EU
customs union but not the rest of the UK. In essence this puts a border
between the UK and Northern Ireland.

\- The DUP, who are now an essential part of the Conservative majority in
Westminster will fight tooth and nail any separation from the UK as they see
this as leading to an inevitable (and undesired, by the Protestants at least)
reunification with Ireland.

\- The UK wants to have their cake and eat it too when it comes to freedom of
movement in that they want UK citizens to have freedom of movement but not
have to allow EU citizens freedom of the movement in the UK. The EU has made
it pretty clear that they don't want to set this precedent and that any
freedom of movement needs to be reciprocal.

\- The UK wants a deal like Norway or Switzerland. The EU, who wants to not
encourage further separation, will fight against this. The UK will get a deal
but it won't be as good.

\- Being a non-voting member of the EU in the Norway/Switzerland model will
give the UK all of the negatives (primarily the outflow of money to fund the
EU) with none of the benefits (they lose voting rights). This is really a
worst of both worlds type scenario.

Honestly I see a hard exit as probably being the best outcome (short of
calling this whole thing off, which I don't think will happen).

Sadly, this whole affair has kind of shown just how useless the UK media is as
pretty much everything written about this is blatantly opinionated on whatever
the editorial position of the paper is. It doesn't even matter if the article
that someone like the Guardian or the Economist produces is good in isolation.
You just know that the Guardian isn't going to publish anything positive or
even neutral on Brexit. As a result you really can't trust anything they say.
They aren't alone in this.

There are some positive outcomes that would come out of a hard Brexit:

\- Not handing over 50B+ euros to the EU. It's true that when the UK pays into
the EU budget they get some of that money back but the net position is a
deficit.

\- The UK regaining sovereignty over territorial waters for fishing purposes.
These waters have been heavily overfished and the tragedy of the commons has
definitely applied here. Ironically when the EC was originally formed the UK
refused to join. Had they done so they would've maintained sovereignty over
territorial waters. When they later joined they didn't.

\- The UK is no longer under EU jurisdiction and could go the route of
Switzerland and become a financial haven.

\- The UK would no longer be on the hook for the bailouts for precarious
economies (Greece, Portugal, Italy). It's true that the UK isn't in the
eurozone so there's some separation already but this is still more insulation.

Sadly I think efforts like Scotland remaining in or rejoining the EU are
doomed as they would present the same border issues that plague Northern
Ireland.

~~~
jimnotgym
> The UK regaining sovereignty over territorial waters for fishing purposes.
> These waters have been heavily overfished and the tragedy of the commons has
> definitely applied here. Ironically when the EC was originally formed the UK
> refused to join. Had they done so they would've maintained sovereignty over
> territorial waters. When they later joined they didn't.

I don't think this is going to happen at all. Most fish landed in the UK are
exported to the EU. Kicking out their fisherman and then selling them the fish
sounds like a very unlikely outcome to me. Macron has already flagged this

~~~
cletus
The politics of fishing in the waters around the UK and Ireland is long and
complicated. Here's just one example:
[http://britishseafishing.co.uk/atlantic-dawn-the-ship-
from-h...](http://britishseafishing.co.uk/atlantic-dawn-the-ship-from-hell/)

I believe there have been other examples where the Irish fishing quota was
expanded by the exact amount of tonnage as whatever new supertrawler just got
built.

It's also true that the British government have had their own issues when it
comes to fishing policy but I still believe that the end result in total will
be better with a single government (the UK) managing those waters rather than
them falling under the EU's fishing policy.

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jhcl
That site has the cookie policy from hell. Go to the site, ctrl-a, ctrl-c,
ctrl-v into a pad and close the browser tab. Then you will have the
information without having to deal with their corporate madness.

~~~
jstanley
If you use Firefox, Reader Mode is quite effective against this site, and many
others.

It's the little "text document" icon in the address bar.

------
callumprentice
Is Brexit inevitable or might the upcoming vote in parliament derail it? If
so, how would that work? Everything goes back to the way it was some 2 years
or so ago?

~~~
jimnotgym
No, parliament could choose to withdraw their notice to leave. They are
pretending they can't for political reasons, but it is far from inevitable

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jimnotgym
Please, I come to HN to get away from Brexit. This is a flame war topic, can
we ditch it please mods?

~~~
ngcc_hk
It is a reality you have to face. We have to face. I read and so far the
argument is great and informative. You can exit by closing this tab. But
discussion is just text. No reason to stop.

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delbel
I can't read the article, there is no room to see the text. To many pop-
ups,pop-downs,spam headers. Whatever the article says, I can't see it.

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cft
The Economist, The New York Times, SF Chronicle have extracted their full
brand value from me and there's nothing left. What I mean by this is that when
I see their links, I know that the article will be unreadable, because either
they will make me jump through some "created free account" hoops to read it,
or there will be so many CPU intensive ads or banners "you have read 2 out of
your 3 free articles per month" that they make the content effectively
inaccessible, especially on a phone. As a result, these brands started to me
associated with "unreadable" and "desperate" as opposed to be "reliable" in my
mind, and I don't bother to open these links anymore.

~~~
AceJohnny2
I'm an Economist and NYT (and LATimes, and WaPo...) subscriber, because
journalism doesn't come out of happy thoughts and thin air, and that remains
true even if I'm unhappy with their coverage of some topics.

I got the article page directly. Clean, readable, no ads all over the place.

You get what you pay for.

