Login/Sign up

World Association of International Studies

PAX, LUX ET VERITAS SINCE 1965
Post A No-Deal Brexit? Reflections on Allister Heath's Essay
Created by John Eipper on 03/14/19 7:24 AM

Previous posts in this discussion:

Post

A No-Deal Brexit? Reflections on Allister Heath's Essay (José Ignacio Soler, Venezuela, 03/14/19 7:24 am)

I have carefully read the article by Allister Heath, recommended by Ángel Viñas in his latest post about Brexit (March 12th).

I would not dare to question or refute Heath's arguments regarding the advantages and benefits of Brexit for Great Britain. His reputation as an economist and journalist speak for themselves.

Essentially he argues that:

1. UK exports to the EU have not significantly grown since they have belonged to the common market;

2. Brexit's impact on the UK´s GDP is also very low, on the order of 1-2 per cent, and it would only affect one or two industries;

3. The UK government´s plan after Brexit to eliminate 80-90% of tariffs would dramatically reduce the net cost of departure;

4. The loss of the common-market advantages is going to be compensated by alternate foreign markets;

5. "The UK, as a net food importer, suffers particularly from higher food prices, impacting both on the consumer and on the food processing industry";

6. The cost of the Common Agricultural Policy (CAP) costs EU citizens roughly €100 billion (£86 billion) a year;

However, I would dare to make some comments on his arguments, of course only as an amateur economist and based on pure and basic common sense.

It is unclear if the "exports" quoted by Heath include all sorts of products, goods and services, particularly financial and other services. I do not know the real numbers for the export of goods and the benefits that UK industries had as participants in the tariff-free market in the EU, although I suspect and estimate it should have been huge. Also, if I understand correctly, the UK has had great privileges and benefits as the most important financial center in the EU, as a product of the free transit of capital and services. This most probably benefited it a great deal, as the decision to move the headquarters of important financial institutions to other cities in the EU shows. These privileges most likely will be lost after Brexit.

I believe that to assert that only one or two British industries will be affected by Brexit is too optimistic. It is very unlikely that the industrial sector of produced goods, the food sector, the automotive sector, the technology sector, tourist sector, or the financial sector will be unaffected by the increased cost of freight, tariffs, customs barriers or taxes to other alternate markets, until other bilateral trade agreements are arranged.

The UK's plan to eliminate 80-90% of tariffs on imported goods is probably necessary to reduce the increasing costs to UK citizens. However Heath seems to overlook the cost to the UK's budget, and these numbers are probably not insignificant.

Furthermore, I believe the likely devaluation of the pound--or increased valuation?--will exert great pressure on inflation, employment, productivity, the cost of living, cost of real estate, tourism, the cost of imported and exported products. It seems to me very optimistic to believe that all these effects after Brexit would not impact significantly the GDP in the short and the medium term.

A Brexit deal would probably mitigate all these impacts, until the economy is stabilized again. A no-deal Brexit as suggested by the author and which seems to be the most likely scenario after Parliament´s most recent rejection of May's deal, I suspect it would be much more dramatic for the UK and the rest of the EU, an undesirable scenario.

JE comments:  If you missed Heath's essay, here it is again:

https://waisworld.org/go.jsp?id=02a&l=en&objectType=post&o=123516&objectTypeId=89645&topicId=4980

Uncertainty, uncertainty.  There are way too many moving parts.  Yet can't we be fairly sure that UK real estate prices will decline post-Brexit?  I don't see the Russians taking up the slack.


SHARE:
Rate this post
Informational value 
Insight 
Fairness 
Reader Ratings (0)
0%
Informational value0%
Insight0%
Fairness0%

Visits: 120

Comments/Replies

Please login/register to reply or comment: Login/Sign up

Trending Now



All Forums with Published Content (41741 posts)

- Unassigned

Culture & Language

American Indians Art Awards Bestiary of Insults Books Conspiracy Theories Culture Ethics Film Food Futurology Gender Issues Humor Intellectuals Jews Language Literature Media Coverage Movies Music Newspapers Numismatics Philosophy Plagiarism Prisons Racial Issues Sports Tattoos Western Civilization World Communications

Economics

Capitalism Economics International Finance World Bank World Economy

Education

Education Hoover Institution Journal Publications Libraries Universities World Bibliography Series

History

Biographies Conspiracies Crime Decline of West German Holocaust Historical Figures History Holocausts Individuals Japanese Holocaust Leaders Learning Biographies Learning History Russian Holocaust Turkish Holocaust

Nations

Afghanistan Africa Albania Algeria Argentina Asia Australia Austria Bangladesh Belgium Belize Bolivia Brazil Canada Central America Chechnya Chile China Colombia Costa Rica Croatia Cuba Cyprus Czech Republic Denmark East Europe East Timor Ecuador Egypt El Salvador England Estonia Ethiopia Europe European Union Finland France French Guiana Germany Greece Guatemala Haiti Hungary Iceland India Indonesia Iran (Persia) Iraq Ireland Israel/Palestine Italy Japan Jordan Kenya Korea Kosovo Kuwait Kyrgyzstan Latin America Liberia Libya Mali Mexico Middle East Mongolia Morocco Namibia Nations Compared Netherlands New Zealand Nicaragua Niger Nigeria North America Norway Pacific Islands Pakistan Palestine Paraguay Peru Philippines Poland Polombia Portugal Romania Saudi Arabia Scandinavia Scotland Serbia Singapore Slovakia South Africa South America Southeast Asia Spain Sudan Sweden Switzerland Syria Thailand The Pacific Tunisia Turkey Turkmenistan UK (United Kingdom) Ukraine USA (America) USSR/Russia Uzbekistan Venezuela Vietnam West Europe Yemen Yugoslavia Zaire

Politics

Balkanization Communism Constitutions Democracy Dictators Diplomacy Floism Global Issues Hegemony Homeland Security Human Rights Immigration International Events Law Nationalism NATO Organizations Peace Politics Terrorism United Nations US Elections 2008 US Elections 2012 US Elections 2016 Violence War War Crimes Within the US

Religion

Christianity Hinduism Islam Judaism Liberation Theology Religion

Science & Technology

Alcohol Anthropology Automotives Biological Weapons Design and Architecture Drugs Energy Environment Internet Landmines Mathematics Medicine Natural Disasters Psychology Recycling Research Science and Humanities Sexuality Space Technology World Wide Web (Internet)

Travel

Geography Maps Tourism Transportation

WAIS

1-TRIBUTES TO PROFESSOR HILTON 2001 Conference on Globalizations Academic WAR Forums Ask WAIS Experts Benefactors Chairman General News Member Information Member Nomination PAIS Research News Ronald Hilton Quotes Seasonal Messages Tributes to Prof. Hilton Varia Various Topics WAIS WAIS 2006 Conference WAIS Board Members WAIS History WAIS Interviews WAIS NEWS waisworld.org launch WAR Forums on Media & Research Who's Who