Hacker News Reader

Comment by kaftoy | Hacker News Reader

Transportation and smaller market will keep import prices from these oversease sources pretty high. EU only has to sell a little under (but more than what it's selling now, with the internal trade agreements) to keep it's upper hand. Of course, EU would be ratarded to have some silly new agreements to throw the trade prices over the roof. But this is a situation which can be exploited in EU advantage and in no way in UK advantage.

View on HN

Freight costs (especially Asia to Europe) are at an all time low.

http://www.reuters.com/article/maersk-containerfreightrates-...

"Shipping freight rates for transporting containers from ports in Asia to Northern Europe fell 17.8 percent to $540 per 20-foot container (TEU) in the week ended on Friday, a source with access to data from the Shanghai Containerized Freight Index told Reuters."

You generally have 40 foot containers, not 20. But then double above freight. With how much you can fit in there, it is nothing. You can fit 3 cars in a 40-foot container (though normally you'd use special vessels for cars).

Japan already sell their cars pretty cheap over here.

Adding tarrifs essentially means Honda will get more customers at the expense of BMW.

Germany won't want that

Japan has trade deals with the EU making this possible. The UK will have to renegotiate all those deals themselves (or just copy and paste the old ones? what was the point of independence then?). What happens in the mean time? Is the UK going to remain part of the EU until all those deals with China, Japan, the US - to name a few - are made? It's a huge endeavor and a lot of question marks. I do not envy your position.

Yes, we will probably remain with the EU for long time coming. It will be a slow gradual process.

Hopefully, since that would have the least negative fallout. The untangling of connections across the Channel will take some time.

OTOH, looking at other possible referendums across Europe, I would like it to be clear what an exit from the EU entails as soon as possible. I don't think leave voters will get what they had hoped for, vide https://amp.twimg.com/v/6ca5195b-a8a5-4b20-b209-92440b9a25d6

The European Union does not have a trade deal with Japan (https://en.wikipedia.org/wiki/European_Union_free_trade_agre...).

There is no free trade agreement yet. There are, however, a number of agreements that cover bureaucracy regarding import and export, as well as other relationships. Maybe most of the UK's non-EU import regulations are negotiated partner for partner by the UK government. In that case, nothing would change. But I doubt that ongoing relationships between global partners and the EU do not have any effect on the UK. See http://ec.europa.eu/trade/policy/countries-and-regions/count... for an overview.

Maybe it's possible for the UK to get custom tailored agreements that are more beneficial. But I'm afraid that until all of that is settled, a lot of time will have passed. Negotiation about the FTA between EU and Japan has been going on for about four years now. Other fora of exchange have been established decades ago. Until the UK can benefit from their own negotiation efforts, the EU might look more attractive to Japanese investments and trade.

International trade is complicated and takes time but the Leave campaign made it look like everything's going to be fine in just a few years.

Honda threatened before to move it's Swindon plant to the continent. They also buy many assambley parts from EU countries. Let's see what happens next. It is convenint for them to have a plant in UK while UK is part of EU (because they sell UK made cars to EU countries with the current trade agreement) but if agreements change and imported goods from UK to EU get higher price:

- Will Honda keep UK plant to sell higher priced cars to UK (due to higher priced of imported parts from EU)?

- Will Honda move the plant to an EU country to have better prices to a larget market?

How how does this work in the UK advantage, again?

Reply on news.ycombinator.com