why so afraid to go it alone

thehighground

sink wrote: »

If you actually read the article you would read that the EU commission has negotiated visa free travel for EU citizens to countries all over the world. If we left the EU we would no longer be part of those agrements and our passports would no longer be valid, we would have to surrender our passports and get new ones. The likelyhood of us being able to negotiate visa free travel to all these countries bi-laterally would be very slim. The benefits for other countries would not be there.

Would you please try to stop scaremongering. We've only had the Maroon/EU Passport since the early '90s. Prior to that we had a green one (indeed, many would like that one back). I personally have visited approx. 20 countries with that passport (when I took a year out to go travelling). Some countries I needed a VISA for (only country I can remember is having to get one for the US - others were just a way of that particular country collecting some cash at point of entry as far as I could see).

The benefits are that Irish people are 1st world (well educated/wealthy) and more than likely are not going to be a burden on the State of any country they visit. In fact, most countries like people like us visiting them because we spend cash in their countries.

sink

thehighground wrote: »

The benefits are that Irish people are 1st world (well educated/wealthy) and more than likely are not going to be a burden on the State of any country they visit. In fact, most countries like people like us visiting them because we spend cash in their countries.

I will concede on this point. But you have to aknowlege that we are only in this position due to being members of the EU.

thehighground

sink wrote: »

I will concede on this point. But you have to aknowlege that we are only in this position due to being members of the EU.

Well, when I was travelling with my green passport Ireland was very poor - interest rates were about 16% with very high unemployment. I attribute most of our wealth to the introduction of free education (1972) and our own enterprise. The US probably has a lot more to do with us being well of now than the EU. Remember Mary Harney's comment "nearer to Boston than Berlin ....

sink

thehighground wrote: »

Well, when I was travelling with my green passport Ireland was very poor - interest rates were about 16% with very high unemployment. I attribute most of our wealth to the introduction of free education (1972) and our own enterprise. The US probably has a lot more to do with us being well of now than the EU. Remember Mary Harney's comment "nearer to Boston than Berlin ....

The US no doubt played a part in the development of our economy but only because through Ireland it had access to the European common market. The EU also played a very large role outside of the common market through structural development funds. We ourselves also played a part through low taxes and free education as you mentioned. It took the collective effects of all these and more to lift our economy into the developed world. We can still have strong links with the US while remaining part of the EU, we don't need to sacrifice one for the other.

thehighground

sink wrote: »

The US no doubt played a part in the development of our economy but only because through Ireland it had access to the European common market. The EU also played a very large role outside of the common market through structural development funds. We ourselves also played a part through low taxes and free education as you mentioned. It took the collective effects of all these and more to lift our economy into the developed world. We can still have strong links with the US while remaining part of the EU, we don't need to sacrifice one for the other.

One thing - can you explain to me why they didn't set up in Scotland or Wales then (considering they are both English speaking countries in the EU if that was an issue for American investors and companies like Microsoft & Intel were here long before the Euro came about, as were companies like Digitel (now no longer in existence or amalgamated with IBM or Hewlett Packard!??).

If you are not a member of the EC are you blocked from trading in the EU? For example, can you buy any items made in China in Germany?

sink

thehighground wrote: »

One thing - can you explain to me why they didn't set up in Scotland or Wales then (considering they are both English speaking countries in the EU if that was an issue for American investors and companies like Microsoft & Intel were here long before the Euro came about, as were companies like Digitel (now no longer in existence or amalgamated with IBM or Hewlett Packard!??).

I don't know all the specifics but it has a lot to do with the IDA marketing successfully in the US for foreign direct investment. They would do this by showing statistics for second and third level graduates and giving tax breaks and other incentives as well as clever advertising ("The Young Europeans"). Scotland and Wales are not in the position to give tax breaks and many other incentives because their taxes are set by Westminster. It is also not in Westminster's interest to distort competition within the UK market as it might damage growth in London, one of the richest places in the world. There are probably other factors but I don't know them all. Why do you think they set up here instead of Scotland and Wales?

thehighground wrote: »

If you are not a member of the EC are you blocked from trading in the EU? For example, can you buy any items made in China in Germany?

You are not blocked from trading with the EU but your products will incur import tariffs resulting in them being less competitive than domestically produced goods and services. This would make it difficult for a company providing financial services to the EU from outside to compete with another company providing the same service within the EU. Chinese goods are still cheap by comparison even after tariffs are levied simply because Chinese labour is so cheap and they can mass produce goods at a far greater level than us. Do you really want to compete with the Chinese on their level?

That is why the government is trying to build a knowledge based economy. Knowledge is the one resource that is not easy to replicate in a developing economy like China. A high level of knowledge takes generations to build. Free third level education was introduced in 1972 it took until the mid nineties to see a return on investment. This is in part because graduates from third level have generally been in education for over 20 years and there needs to be a critical mass of knowledge before and entire economy can switch from and agricultural/industrial to a services/knowledge based economy. In a country the size of China or India reaching that critical mass is all the more difficult.

kevteljeur

thehighground wrote: »

One thing - can you explain to me why they didn't set up in Scotland or Wales then (considering they are both English speaking countries in the EU if that was an issue for American investors and companies like Microsoft & Intel were here long before the Euro came about, as were companies like Digitel (now no longer in existence or amalgamated with IBM or Hewlett Packard!??).

If you are not a member of the EC are you blocked from trading in the EU? For example, can you buy any items made in China in Germany?

The reasons why have been discussed numerous times elsewhere here, but firstly, Scotland and Wales are not independent of England, and have the same taxation regimes. On the plus side, they have also received the financial benefits of being part of a powerful, wealthy state. They have much more independence now than before, but are still not allowed to lower their corporate tax rates, as much as they want to. It was a recent hot potato, since they now see Ireland as an equal state, and economic competitor.

As for Ireland being a benefactor of US businesses, yes, you are absolutely right, as I've said before a smart, well-educated, English-speaking, compliant workforce prepared to work for a low wage was a huge selling point, with a weak Government eager to attract investment by massively subsidising it in any way possible being another big selling point.

I fear, however, that many people are overlooking the hard fact that the Irish State was able to subsidise the US investment by getting EU aid for infrastructure work which it would otherwise have had to pay for itself. If the EU aid had not been there, then either the tax breaks would not have been possible, or Ireland as a whole would be significantly less developed than it is; and we can agree that Ireland's infrastructure is less than stellar. It's not even debatable.

I have always felt that it can be summarised in this way: Expensive cars on poor roads. Irish people have rapidly gained personal wealth, at the cost of a poor State which is only now briefly able to invest in general quality of infrastructure. It shouldn't come a surprise that the EU actually uses Ireland as a negative example to newly-joined EU states on how to manage planning and development.

marco_polo

thehighground wrote: »

One thing - can you explain to me why they didn't set up in Scotland or Wales then (considering they are both English speaking countries in the EU if that was an issue for American investors and companies like Microsoft & Intel were here long before the Euro came about, as were companies like Digitel (now no longer in existence or amalgamated with IBM or Hewlett Packard!??).

If you are not a member of the EC are you blocked from trading in the EU? For example, can you buy any items made in China in Germany?

Yes but any exports from that country may be subjects to tarriffs in order make then more expensive compared to EU goods. Even EEA members may be subject to tarriffs on exports to EU countries, if the product is from industries that the EEA country has protected exposure from the EU internal market.

A a good example fishing in Norway, this is protected by the government and not subject to internal market rules unlike many other industries in Norway. The EU does not impose a tarriff on Cod and Salmon because these good are in fairly short supply from EU countries, but it does impose tarriffs on fish like Herring and Mackrel which are plentiful. If they break market rules they are also liable to tarriffs. As in all countries tarriffs are applied or not to products when it suits the EU. actually it is not quite that simple WTO agreements also come into play here as well of course.

kevteljeur

Well, we won't need to leave from EU after all; it looks like we'll be leaving to the EU.

http://www.ireland.com/

And this scenario is with the status quo, so I'm curious to hear from the secessionists about how bad this could be if we left the EU, and spent the next 5 years renegotiating treaties and currencies.

djpbarry

thehighground wrote: »

26 stand-alone agreements might be a lot easier to achieve than to get all 27 countries to agree to the one thing !

Seriously? Suppose we extend that logic to all the member states. Suppose every individual member state negotiated bi-lateral agreements with every other individual state. You are aware that this would result in an astronomical number of agreements, even if each individual state had just one all-encompassing agreement with every other individual state. It is quite simply not practical.

thehighground wrote: »

We've only had the Maroon/EU Passport since the early '90s...

But we've been in the EU since '73.

thehighground wrote: »

The benefits are that Irish people are 1st world (well educated/wealthy)...

Not all of them are.

thehighground wrote: »

...and more than likely are not going to be a burden on the State of any country they visit.

So what's the deal with these guys?

Scofflaw

kevteljeur wrote: »

Well, we won't need to leave from EU after all; it looks like we'll be leaving to the EU.

http://www.ireland.com/

And this scenario is with the status quo, so I'm curious to hear from the secessionists about how bad this could be if we left the EU, and spent the next 5 years renegotiating treaties and currencies.

Ah - that'll be the long-awaited 'soft landing' then.

cordially,
Scofflaw

O'Morris

kevteljeur wrote: »

Well, we won't need to leave from EU after all; it looks like we'll be leaving to the EU.

http://www.ireland.com/

It would be interesting to know if we'll be the people leaving to the EU or if it will be the eastern Europeans who've arrived here over the last few years. We've been told all along that most of the immigrants will return home once the once economy slows down so maybe it's reasonable to assume that it won't be the Irish people leaving but that instead we can expect a massive outflux of recent arrivals.

kevteljeur

O'Morris wrote: »

It would be interesting to know if we'll be the people leaving to the EU or if it will be the eastern Europeans who've arrived here over the last few years. We've been told all along that most of the immigrants will return home once the once economy slows down so maybe it's reasonable to assume that it won't be the Irish people leaving but that instead we can expect a massive outflux of recent arrivals.

Without a doubt, that is true, and I was being somewhat whimsical. But that fact in itself is telling.

thehighground

sink wrote: »

I don't know all the specifics but it has a lot to do with the IDA marketing successfully in the US for foreign direct investment. They would do this by showing statistics for second and third level graduates and giving tax breaks and other incentives as well as clever advertising ("The Young Europeans"). Scotland and Wales are not in the position to give tax breaks and many other incentives because their taxes are set by Westminster. It is also not in Westminster's interest to distort competition within the UK market as it might damage growth in London, one of the richest places in the world. There are probably other factors but I don't know them all. Why do you think they set up here instead of Scotland and Wales?

Corporation Tax @ originally 10% now 12.5%. We really need to be certain of holding onto that.

You are not blocked from trading with the EU but your products will incur import tariffs resulting in them being less competitive than domestically produced goods and services. This would make it difficult for a company providing financial services to the EU from outside to compete with another company providing the same service within the EU. Chinese goods are still cheap by comparison even after tariffs are levied simply because Chinese labour is so cheap and they can mass produce goods at a far greater level than us. Do you really want to compete with the Chinese on their level?

I don't think we are going to try and compete on manufacturing front. After all we are importing stuff from China. Why does the EU allow us to import/trade with China as its obviously not good for the EU/us to allow jobs to go to China. How come Hibernian can move 500 jobs to India - they are not in the EU - will they be able to trade with EU countries. Do they have to pay tariffs to the EU/Ireland to do that? Should I change my insurance to an Irish/EU company to protect Irish jobs?

That is why the government is trying to build a knowledge based economy. Knowledge is the one resource that is not easy to replicate in a developing economy like China. A high level of knowledge takes generations to build. Free third level education was introduced in 1972 it took until the mid nineties to see a return on investment. This is in part because graduates from third level have generally been in education for over 20 years and there needs to be a critical mass of knowledge before and entire economy can switch from and agricultural/industrial to a services/knowledge based economy. In a country the size of China or India reaching that critical mass is all the more difficult.

Bear in mind the population of China is 1.2 billion! They have a very good education system - not all might have third level education, but if even 1% of them do, the world has serious competition! I was in China last year. One Chinese person I spoke to was that one of the downsides is that third level education used to be free (which he availed of), but you now have to pay for it. China (and the people) blew me away. We have no idea what we are up against!

IRLConor

O'Morris wrote: »

It would be interesting to know if we'll be the people leaving to the EU or if it will be the eastern Europeans who've arrived here over the last few years. We've been told all along that most of the immigrants will return home once the once economy slows down so maybe it's reasonable to assume that it won't be the Irish people leaving but that instead we can expect a massive outflux of recent arrivals.

It'll depend on where the job cuts lie.

If we lose jobs in the service and construction industries, particularly at the lower pay grades then I'd expect to see a greater proportion of recent arrivals in the outflow.

If we lose enough jobs where traditionally Irish people have been the majority then it might be a different story altogether.

The worst case scenario is that there are huge cuts in the high tech/pharmaceutical sectors. If that happens, expect to see a huge "brain drain" as highly skilled workers leave. That would make the recovery much more difficult.

thehighground

kevteljeur wrote: »

The reasons why have been discussed numerous times elsewhere here, but firstly, Scotland and Wales are not independent of England, and have the same taxation regimes. On the plus side, they have also received the financial benefits of being part of a powerful, wealthy state. They have much more independence now than before, but are still not allowed to lower their corporate tax rates, as much as they want to. It was a recent hot potato, since they now see Ireland as an equal state, and economic competitor.

As for Ireland being a benefactor of US businesses, yes, you are absolutely right, as I've said before a smart, well-educated, English-speaking, compliant workforce prepared to work for a low wage was a huge selling point, with a weak Government eager to attract investment by massively subsidising it in any way possible being another big selling point.

I fear, however, that many people are overlooking the hard fact that the Irish State was able to subsidise the US investment by getting EU aid for infrastructure work which it would otherwise have had to pay for itself. If the EU aid had not been there, then either the tax breaks would not have been possible, or Ireland as a whole would be significantly less developed than it is; and we can agree that Ireland's infrastructure is less than stellar. It's not even debatable.

I have always felt that it can be summarised in this way: Expensive cars on poor roads. Irish people have rapidly gained personal wealth, at the cost of a poor State which is only now briefly able to invest in general quality of infrastructure. It shouldn't come a surprise that the EU actually uses Ireland as a negative example to newly-joined EU states on how to manage planning and development.

Thanks for confirming what I already knew.

Now can you answer this part of my question:

If you are not a member of the EC are you blocked from trading in the EU? For example, can you buy any items made in China in Germany?

shoegirl

We'd have 3 problems:
1. immediate loss of currency incurring the expense and implications of restarting our own, which would be severely devalued
2. loss of access to EU markets and potential extra duties to penalise us for dumping the EU and what is perceived as predatory corporate tax rates
3. we'd be thrown back into dependency on the UK as nearest neighbour but without the common market of the EU - we'd be at their mercy and probably simply become a pawn in the hands of a triumphalist Tory party likely to swing the next election

We'd also have no say whatsoever in what happens with the EU, but be at its mercy. I don't think its a desireable situation. I would agree that multinationals would abandon Ireland wholesale as there isn't really much benefit to them in being here except as an offshore tax haven. They'd have a token presence of a few accountants and no real operations.

sink

IRLConor wrote: »

It'll depend on where the job cuts lie.

If we lose jobs in the service and construction industries, particularly at the lower pay grades then I'd expect to see a greater proportion of recent arrivals in the outflow.

If we lose enough jobs where traditionally Irish people have been the majority then it might be a different story altogether.

The worst case scenario is that there are huge cuts in the high tech/pharmaceutical sectors. If that happens, expect to see a huge "brain drain" as highly skilled workers leave. That would make the recovery much more difficult.

The ESRI report estimates that the loses will be mainly in the construction sector. Other areas in the economy will even see growth but not enough to offset the losses in the construction sector. It expect a rise in export of high tech products and pharmaceuticals. So it looks like it will be mainly new arrivals that leave.

thehighground

marco_polo wrote: »

Yes but any exports from that country may be subjects to tarriffs in order make then more expensive compared to EU goods. Even EEA members may be subject to tarriffs on exports to EU countries, if the product is from industries that the EEA country has protected exposure from the EU internal market.

A a good example fishing in Norway, this is protected by the government and not subject to internal market rules unlike many other industries in Norway. The EU does not impose a tarriff on Cod and Salmon because these good are in fairly short supply from EU countries, but it does impose tarriffs on fish like Herring and Mackrel which are plentiful. If they break market rules they are also liable to tarriffs. As in all countries tarriffs are applied or not to products when it suits the EU. actually it is not quite that simple WTO agreements also come into play here as well of course.

So, it all works on supply and demand. Leaving the EU could be very good for us now that there is a world food shortage. The sooner we get our fisheries back the better. Pity we don't have a fishing fleet. I suppose we will just have to put some sort of a surcharge on EU fishing boats to allow them into our waters or just levy a charge on their catches in Irish waters. I'm sure the EU will be honourable about that.

I hear Irish farmers are very pleased to hear about the world food shortage - times are looking up for them.

sink

thehighground wrote: »

So, it all works on supply and demand. Leaving the EU could be very good for us now that there is a world food shortage. The sooner we get our fisheries back the better. Pity we don't have a fishing fleet. I suppose we will just have to put some sort of a surcharge on EU fishing boats to allow them into our waters or just levy a charge on their catches in Irish waters. I'm sure the EU will be honourable about that.

I hear Irish farmers are very pleased to hear about the world food shortage - times are looking up for them.

Well we would be in direct competition with Brazilian factory farms. Do you think small family run Irish farms would be able to?

thehighground

sink wrote: »

Well we would be in direct competition with Brazilian factory farms. Do you think small family run Irish farms would be able to?

Think we are competing anyway! No problem getting Brazilian/Argentinian beef in Europe. The only difference is that there will be a level playing field as regards compliance - they will be glad to get anything to eat

What do you think would happen with the fisheries? (Norway, Ireland & Iceland could really screw them if we put our heads together :eek:).

IRLConor

thehighground wrote: »

If you are not a member of the EC are you blocked from trading in the EU? For example, can you buy any items made in China in Germany?

Yes, but those goods cost more than if they were purchased inside the EU (assuming equal base costs). For example the rate charged on a car* is 10% for the countries I looked at (USA, Japan, China) so any US, Japanese or Chinese car manufacturer needs to factor that into their pricing when selling into the EU.

* A new petrol engined (1-1.5L) motor vehicle principally designed for the transport of persons. TARIC code 8703 22 10

IRLConor

thehighground wrote: »

Think we are competing anyway! No problem getting Brazilian/Argentinian beef in Europe. The only difference is that there will be a level playing field as regards compliance - they will be glad to get anything to eat

Currently Brazil and Argentina are paying 12.8% and €176.80 per 100kg of beef* to sell to the EU. Do you think our farmers can afford to drop their prices by that much to compete?

* "High quality beef and veal", TARIC code 0201 10 00 10.

The Corinthian

sink wrote: »

Well we would be in direct competition with Brazilian factory farms. Do you think small family run Irish farms would be able to?

Cut wages to remain competitive. Outside of lower transport costs for Europe, Ireland outside of the common market has no comparative advantage to Brazil or Argentina to speak of.

thehighground wrote: »

Why does the EU allow us to import/trade with China as its obviously not good for the EU/us to allow jobs to go to China.

Because we also sell to China. China has a comparative advantage on Europe on raw materials and a certain level of manufactured goods, but ultimately, they buy our cars, not vice versa.

If we want to continue to sell to china, then you need to give and take on trade deals. The reverse is also true.

thehighground

IRLConor wrote: »

Yes, but those goods cost more than if they were purchased inside the EU (assuming equal base costs). For example the rate charged on a car* is 10% for the countries I looked at (USA, Japan, China) so any US, Japanese or Chinese car manufacturer needs to factor that into their pricing when selling into the EU.

* A new petrol engined (1-1.5L) motor vehicle principally designed for the transport of persons. TARIC code 8703 22 10

Could that mean if Ireland was outside the EU, we could put a surcharge on Mercs & VWs entering the country and do a deal with China so that we could get cheaper cars?

Would you not agree that it is a two-way street between Ireland and the EU as regards trade?

thehighground

IRLConor wrote: »

Currently Brazil and Argentina are paying 12.8% and €176.80 per 100kg of beef* to sell to the EU. Do you think our farmers can afford to drop their prices by that much to compete?

* "High quality beef and veal", TARIC code 0201 10 00 10.

You don't get it, do you? There is a world food shortage! Brazil, Argentina or Ireland will not be paying any tarifs to sell beef into (highly populated/industrialised) Europe. They will be competing on a level playing field though as regards compliance.

marco_polo

thehighground wrote: »

Could that mean if Ireland was outside the EU, we could put a surcharge on Mercs & VWs entering the country and do a deal with China so that we could get cheaper cars?

Would you not agree that it is a two-way street between Ireland and the EU as regards trade?

Yes but the lane in one direction is pretty narrow. If we put tarriffs on car imports from the EU and the EU put tariffs on our agriculture and fisheries products, who do you think such a trade war would hurt more?

IRLConor

thehighground wrote: »

Could that mean if Ireland was outside the EU, we could put a surcharge on Mercs & VWs entering the country and do a deal with China so that we could get cheaper cars?

We could, but the net result would probably be that the Chinese cars would cost a similar amount to the cheaper EU ones we currently get. So, instead of us getting cheaper cars we'd just make some of them more expensive.

That's completely beside the point that making cars cheaper is not a good thing for Ireland.

thehighground wrote: »

Would you not agree that it is a two-way street between Ireland and the EU as regards trade?

It is, but in the wrong way. We need them a hell of a lot more than they need us.

marco_polo

thehighground wrote: »

You don't get it, do you? There is a world food shortage! Brazil, Argentina or Ireland will not be paying any tarifs to sell beef into (highly populated/industrialised) Europe. They will be competing on a level playing field though as regards compliance.

Well two of them are already paying tarriffs already so one more would not make much difference in the grand scheme. And any food shortages are being largley driven by grain and rice production not beef shortages.

IRLConor

thehighground wrote: »

You don't get it, do you? There is a world food shortage! Brazil, Argentina or Ireland will not be paying any tarifs to sell beef into (highly populated/industrialised) Europe. They will be competing on a level playing field though as regards compliance.

World food shortage or no world food shortage, Brazil and Argentina (and Ireland if we leave) will pay tariffs for selling food into the EU. Domestic production inside the EU will be increased to meet demand long before they'll drop the tariff rates.