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Looking for disaster in Brexit.

By NICK O’HEAR.

THE REMAINERS TELL us that if “we crash out of the EU”, we will have to trade on WTO terms and that will be a disaster. They may be right.

They often refer to the automobile industry and how detrimental this will be for the supply chain. In the U.K., nearly 2 million cars a year are made of which 800,000 are exported to the EU. Without a trade agreement, the EU would apply the WTO prescribed 10% tariff. As a result these exports will be relatively uncompetitive, but that is not the disaster.

The U.K. imports 1.7 million cars from the EU, mostly from Germany, and they also would incur the same10% tariff and the same erosion of their competitivity. However, these cars could easily be replaced by U.K. produced models. There is no shortage of choice including extreme luxury, very nice family cars as well as good comfortable small cars. Given that German cars attract a premium, the British consumer could look forward to a nice saving. Nowadays, there is no sacrifice in reliability (according to the Reliabilty Index) but a further saving in maintenance and repair costs.

So the disaster is “More Jags, less Mercs!”, and that is a disaster for Germany. When they tell us that manufacturers will want to relocate their manufacturing plants, presumably this will be to the U.K.?

EU regulations, ‘erect a fortress of protectionism against the outside world.’

There is free trade within the EU, where restrictive practices are confined to regulation. These, however, erect a fortress of protectionism against the outside world. Google has just been handed a huge $5 billion fine for bundling its search engine with its free Android mobile phone operating system. You can easily alter this by taking a few steps to replace Google with one of the other search engines such as Yahoo or Bing. Amusingly, you can find out how to do this by Googling it!

When the EEC was formed, the Common Agricultural Policy was created. This was primarily devised to assist French agriculture and protect it against competition. Consequently. there is no sanction against the EU for legislating against GM or chlorine treated chickens. Not everybody wants to eat these foods but that is not a good reason for banning them. The House of Parliament has issued repeated reports on GM and found absolutely nothing wrong with it. Similarly, 100’s of millions of U.S. citizens munch their way through 100s of tons of chlorine treated chicken every year. They don’t need protection and neither does the EU consumer.

If the UK does succeed in leaving the EU and its generous contribution ceases, it may be a disaster for the unfortunate French farmer.


Nick O’Hear is chairman of Tension Technology International, Ltd., based in Schoonhoven, The Netherlands.

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