Brexit discussion thread IV

Rhineshark · 14-09-2018 3:55pm

https://www.rte.ie/amp/993606/

Leaving aside the visit stuff, posting this for this bit;

Mr Faucher also said that the US remained fully committed to Northern Ireland and to continuing the stability that had followed the Good Friday Agreement.

He said the US wanted to see the restoration of the institutions because the people of Northern Ireland would be better served, particularly given Brexit-related challenges if there was a government representing their interests.

He said a US special envoy to Northern Ireland would be appointed and that discussions were ongoing as to just what part that person would play in the current situation, and how an individual could be most beneficial.

Given the calibre of Trump appointments, the last thing the NI/Brexit situation needs is a wild pro-Brexit Trumpist who isn't entirely sure what country he's in.

Hopefully Trump's handlers get a sane one through.

brickster69 · 14-09-2018 4:04pm

First Up wrote: »

prawnsambo wrote:

A lot of what the UK exports to Ireland, is imported from the EU.

Such as?

Prawn Sandwiches

First Up · 14-09-2018 4:09pm

prawnsambo wrote:

HP servers and PCs are mostly manufactured in the Czech Republic. The only two agents for HP equipment are based in the UK and from whom HP resellers here get their stock.

If goods from a supplier in a Eurozone country are traded into sterling and back into Euro, the currency movements will mostly balance out.

Your statement was that a fall in sterling makes imports from the UK (i.e UK exports) more expensive. The opposite is true.

Infini · 14-09-2018 4:16pm

First Up wrote: »

If goods from a supplier in a Eurozone country are traded into sterling and back into Euro, the currency movements will mostly balance out.

Your statement was that a fall in sterling makes imports from the UK (i.e UK exports) more expensive. The opposite is true.

Yeah but what about import taxes and such. Those add cost's on top of it and the lower value of sterling makes these items more expensive on the domestic market too.

First Up · 14-09-2018 4:21pm

Infini wrote:

Yeah but what about import taxes and such. Those add cost's on top of it and the lower value of sterling makes these items more expensive on the domestic market too.

They are a different matter.

The weaker a currency gets, the cheaper it is for others to buy it. It isn't complicated - its mathematics.

Infini · 14-09-2018 4:26pm

First Up wrote: »

They are a different matter.

The weaker a currency gets, the cheaper it is for others to buy it. It isn't complicated - its mathematics.

Yeah it does look like that but my point would still stand on my last post. On a currency level alone yes it would be cheaper to buy products in sterling but if those items contain parts manufactured outside the country in the EU they get hit with tariffs both on the UK side to import and the weaker sterling makes them more expensive to sell domestically. Export them and then again on the EU side theyre hit with EU tarrifs if they try to sell back in. That's where it gets messy its that double whammy that could sink several car manufacturers for example.

prawnsambo · 14-09-2018 4:31pm

First Up wrote: »

If goods from a supplier in a Eurozone country are traded into sterling and back into Euro, the currency movements will mostly balance out.

Your statement was that a fall in sterling makes imports from the UK (i.e UK exports) more expensive. The opposite is true.

No. These agencies have their business because the UK market is significantly bigger than the Irish one. All their import costs go up because of the fall in the value of sterliing. The majority of their sales are in sterling internally, so there's no gain there and prices have to go up to balance the fall in the sterling/euro rate. So those increased prices are also passed on to their Irish customers. They are not going to price differently for the Irish market.

First Up · 14-09-2018 4:35pm

Infini wrote:

Yeah it does look like that but my point would still stand on my last post. On a currency level alone yes it would be cheaper to buy products in sterling but if those items contain parts manufactured outside the country in the EU they get hit with tariffs both on the UK side to import and the weaker sterling makes them more expensive to sell domestically. Export them and then again on the EU side theyre hit with EU tarrifs if they try to sell back in. That's where it gets messy its that double whammy that could sink several car manufacturers for example.

It doesn't look like that. It is like that.

I am refuting the statement that the weakness of sterling makes imports from the UK more expensive. Other factors and complications may arise but the above statement is simply wrong.

prawnsambo · 14-09-2018 4:40pm

First Up wrote: »

It doesn't look like that. It is like that.

I am refuting the statement that the weakness of sterling makes imports from the UK more expensive. Other factors and complications may arise but the above statement is simply wrong.

Because these import/export companies are not dealing solely with goods from the european mainland and back out again. They are servicing the UK market first and foremost. We're just the inconvenient small market that are tacked on to the back of the agency agreements.

First Up · 14-09-2018 4:47pm

prawnsambo wrote:

No. These agencies have their business because the UK market is significantly bigger than the Irish one. All their import costs go up because of the fall in the value of sterliing. The majority of their sales are in sterling internally, so there's no gain there and prices have to go up to balance the fall in the sterling/euro rate. So those increased prices are also passed on to their Irish customers. They are not going to price differently for the Irish market.

Yes, but the increased sterling price is offset by the lower cost of sterling. It mostly balances.

Currency movements are likely to be the least important outcome of Brexit. The costs and hassle from importing from and exporting back to the EU will make many such supply chains via the UK more trouble than they are worth. That's why many are being re-evaluated and alternatives developed.

An Ciarraioch · 14-09-2018 4:51pm

The Daily Mail's regular readers are still coming to terms with the conversion to Remain:

https://www.dailymail.co.uk/news/article-6165995/Rees-Moggs-hard-Brexit-group-probed-secret-bank-account.html#comments

Professor Moriarty · 14-09-2018 4:55pm

An Ciarraioch wrote: »

The Daily Mail's regular readers are still coming to terms with the conversion to Remain:

https://www.dailymail.co.uk/news/article-6165995/Rees-Moggs-hard-Brexit-group-probed-secret-bank-account.html#comments

I love this line from the comments in relation to JRM:

"Never trust a politician who looks like a Victorian undertaker and sounds like a sedated Dalek"

prawnsambo · 14-09-2018 4:56pm

First Up wrote: »

Yes, but the increased sterling price is offset by the lower cost of sterling. It mostly balances.

Currency movements are likely to be the least important outcome of Brexit. The costs and hassle from importing from and exporting back to the EU will make many such supply chains via the UK more trouble than they are worth. That's why many are being re-evaluated and alternatives developed.

What are you on about? These are businesses. The cost of their inputs goes up. There is no 'balancing' effecct at play. They sell to UK companies who pay them in sterling. If they don't put their prices up to reflect the increased cost of their inputs, they lose money. This is what's happening right now. Businesses in Ireland often have no choice but to deal with these companies. After brexit, that may no longer be the case as either the UK based operations move out of the UK to maintain uninterrupted supply chains or the agency agreements die and the manufacturers provide a different logistical solution for their Irish customers.

But right now, Irish businesses are being faced with rolling price increases because of the weakness of sterling. As it stands, it is now cheaper to buy certain EU manufactured goods here than in the UK. That is almost unheard of.

Imreoir2 · 14-09-2018 5:07pm

Infini wrote: »

Should the UK crash out with no deal the Shinner's no doubt will be strait out the gate pushing UI as the whole solution to everything.

There will probably be a mass campaign of civil disobedience to really nail home that Brexit and the border is an issue that must be solved too.

First Up · 14-09-2018 5:16pm

prawnsambo wrote:

What are you on about? These are businesses. The cost of their inputs goes up. There is no 'balancing' effecct at play. They sell to UK companies who pay them in sterling. If they don't put their prices up to reflect the increased cost of their inputs, they lose money. This is what's happening right now. Businesses in Ireland often have no choice but to deal with these companies. After brexit, that may no longer be the case as either the UK based operations move out of the UK to maintain uninterrupted supply chains or the agency agreements die and the manufacturers provide a different logistical solution for their Irish customers.

prawnsambo wrote:

What are you on about?

I am on about your statement that the weakness of sterling makes imports from the UK more expensive.

You have since qualified the statement by giving examples of good from Eurozone countries traded into Ireland via the UK. That brings multiple other factors into it but does not support your original statement.

If sterling is weaker, we get more pounds for our Euros and the British get less Euros for their pounds. That makes UK imports into the EU cheaper and EU exports to the UK more expensive. It also makes holidays in the EU more expensive for British tourists and visits to the UK cheaper for us.

I hope you can agree with that.

EdgeCase · 14-09-2018 5:23pm

One of the biggest concerns I have is if the UK deviates from EU norms on cars, it could suddenly become quite complicated to get right-hand-drive cars that comply with EU standards. E.g. if it were to start important cars from the USA or Asia that were to non-EU norms.

There are also a few other minor technical issues like Ireland using UK-type plugs and sockets means that a lot of electrical goods destined for the Irish market are just seen as "UK". Even though there's no technical differences in terms of voltage/frequency or standards, I could see that developing into an issue where we're either whacked with extra costs due to lazy supply chains that don't adapt, or we start to see a plethora of goods with continental style CEE 7 plugs and we're back to the 1970s when we used to have adaptors on everything.

Actually, Ireland originally used CEE 7 continental style sockets, we just re-standardised due to a rake of grey-market usage of old UK round pin sockets and when the UK switched over to the current rectangular pin plugs and sockets, we switched too to eliminate old incompatible standards and also to avoid problems with having two standards on the island of Ireland.

There were genuine safety issues with continental style 2-pin plugs fitting UK round pin sockets, but not connecting the side-earth scrapers - i.e. you could have a toaster or a washing machine plugged in with only the live and neutral connected, which was highly dangerous when both systems coexisted here.

The car issue is FAR FAR bigger though if things do go that way and the EU and UK diverge significantly on things like emissions standers or safety standards.

At present, Ireland has slight technical differences on cars due to the KM vs Miles odometers and speedometers, but that's very minor. The overall vehicles are just to UK specs as in EU norms with right hand drive.

I'm just wondering though are we just going to be treated as part of the UK market and charged a special "paddy tax" again by a lot of companies who will just not bother localising / changing supply chains and will end up just trying to pass the tariffs off on Irish consumers.

Also what happens to companies who've got territories defined as "UK and Ireland" ? That will cut a lot of UK companies that just lump us in as an extension of their home market, but also some Irish ones that may have the UK market too.

prawnsambo · 14-09-2018 5:41pm

First Up wrote: »

I am on about your statement that the weakness of sterling makes imports from the UK more expensive.

You have since qualified the statement by giving examples of good from Eurozone countries traded into Ireland via the UK. That brings multiple other factors into it but does not support your original statement.

If sterling is weaker, we get more pounds for our Euros and the British get less Euros for their pounds. That makes UK imports into the EU cheaper and EU exports to the UK more expensive. It also makes holidays in the EU more expensive for British tourists and visits to the UK cheaper for us.

I hope you can agree with that.

I haven't qualified what I said, I've explained it for you. Nothing in this statement has been qualified in any way:

A lot of what the UK exports to Ireland, is imported from the EU. If it isn't a direct import/export, it often carries high EU content. That's what is causing the rolling price increases.

You just failed to understand what it meant. Are the 'multiple other factors', possibly that UK companies might sell the bulk of their output in the UK and get sterling for it? Because that'd be some surprise alright.

No business is going to absorb continuous currency losses in their pricing model and definitely will not if their main markets are in the currency that is making those losses. Your assumption that they would be paid in euros to offset those losses isn't necessarily the case either. UK companies are notorious for requiring payment in sterling. And if not, they often build in quite usurious exchange rates. Have a look at sportsdirect.com and compare their euro prices with their sterling prices. Last time I chacked they were pricing the euro at just over £0.83 when the rate was actually £0.90.

First Up · 14-09-2018 5:46pm

prawnsambo wrote:

You just failed to understand what it meant. Are the 'multiple other factors', possibly that UK companies might sell the bulk of their output in the UK and get sterling for it? Because that'd be some surprise alright.

I didn't misunderstand anything. You said weakness in sterling makes Imports from the UK more expensive. That was all you said and that is all that I am challenging.

What you have said since is bringing other factors into it; some may apply and some may not but none justify your original statement.

prawnsambo · 14-09-2018 6:09pm

First Up wrote: »

I didn't misunderstand anything. You said weakness in sterling makes Imports from the UK more expensive. That was all you said and that is all that I am challenging.

What you have said since is bringing other factors into it; some may apply and some may not but none justify your original statement.

It wasn't all I said. That's just a snippet of a post where I expanded on that statement. But let's play this game then. What other 'factors' have I brought in that changed the meaning of that initial statement?

First Up · 14-09-2018 6:20pm

prawnsambo wrote:

It wasn't all I said. That's just a snippet of a post where I expanded on that statement. But let's play this game then. What other 'factors' have I brought in that changed the meaning of that initial statement?

You expanded on nothing. In 6751 you said exactly this;

"The actual cost of imports from the UK is going up because of the weakness of sterling".

The other factors you brought in are that these are not actually imports from the UK, but imports from elsewhere in the EU that come to Ireland via UK agents or resellers. That is a very different matter to goods originating in the UK.

Leroy42 · 14-09-2018 6:22pm

So Labour has come out today and stated that they will vote against the Chequers plan. There is simply no way for TM to get it through the parliament at this stage, not unless the ERG have come to the same conclusion as most people after this weeks shambolic announcements in that they have nothing to offer.

Raab has been trying to put the pressure on Barnier and the EU to move to accepting Chequers, but at this point there is simply no point. The UK will not accept Chequers so why would the EU bother wasting diplomatic capital on it.

Sam Russell · 14-09-2018 6:24pm

First Up wrote: »

If goods from a supplier in a Eurozone country are traded into sterling and back into Euro, the currency movements will mostly balance out.

Your statement was that a fall in sterling makes imports from the UK (i.e UK exports) more expensive. The opposite is true.

You would thik so, but that is not how UK companies work.

Take Toblerone chocolate bars. Sold in 400 gram bars, but when Sterling fell in value, the bar was redesigned to reduce the amount of chocolate by 10% while keeping the price the same - 360 grams but fewer peaks. We got the smaller bars but at the original price. This was copied over many products and always the same -a 10% rip off.

In many areas of business, particularly retail, Ireland is treated as a sub office of the Liverpool office.

At least that will end. Perhaps we might get our own Amazon.

First Up · 14-09-2018 6:39pm

Sam Russell wrote:

Take Toblerone chocolate bars. Sold in 400 gram bars, but when Sterling fell in value, the bar was redesigned to reduce the amount of chocolate by 10% while keeping the price the same - 360 grams but fewer peaks. We got the smaller bars but at the original price. This was copied over many products and always the same -a 10% rip off.

In many areas of business, particularly retail, Ireland is treated as a sub office of the Liverpool office.

At least that will end. Perhaps we might get our own Amazon.

I suspect they did the same in the UK but yes, we have long languished at the end of UK centered supply chains.

prawnsambo · 14-09-2018 6:47pm

First Up wrote: »

You expanded on nothing. In 6751 you said exactly this;

"The actual cost of imports from the UK is going up because of the weakness of sterling".

The other factors you brought in are that these are not actually imports from the UK, but imports from elsewhere in the EU that come to Ireland via UK agents or resellers. That is a very different matter to goods originating in the UK.

You are selectively quoting me now. I followed up with all of that. Immediately. Yet you saw fit to continue to question what I was saying, despite others also explaining it to you.

And you haven't even paraphrased me correctly above. I described two different types of goods that would be affected by the weakness in sterling. And it's not just EU produced goods btw. There are other currencies that sterling has weakened against that would affect their inputs. But I suspect you're just being pedantic.

First Up · 14-09-2018 6:55pm

prawnsambo wrote:

You are selectively quoting me now. I followed up with all of that. Immediately. Yet you saw fit to continue to question what I was saying, despite others also explaining it to you.

Only when challenged and asked to support your statement, at which point you changed from imports from UK to imports from elsewhere coming via the UK.

prawnsambo wrote:

And you haven't even paraphrased me correctly above. I described two different types of goods that would be affected by the weakness in sterling. And it's not just EU produced goods btw. There are other currencies that sterling has weakened against that would affect their inputs. But I suspect you're just being pedantic.

I didn't paraphrase you. I quoted you.

If demanding accuracy is being pedantic then yes, I suppose I am.

brickster69 · 14-09-2018 6:58pm

Take Toblerone chocolate bars. Sold in 400 gram bars, but when Sterling fell in value, the bar was redesigned to reduce the amount of chocolate by 10% while keeping the price the same - 360 grams but fewer peaks. We got the smaller bars but at the original price. This was copied over many products and always the same -a 10% rip off.

So did the UK, blame the Swiss seen as it is made there !

Sam Russell · 14-09-2018 7:04pm

brickster69 wrote: »

Take Toblerone chocolate bars. Sold in 400 gram bars, but when Sterling fell in value, the bar was redesigned to reduce the amount of chocolate by 10% while keeping the price the same - 360 grams but fewer peaks. We got the smaller bars but at the original price. This was copied over many products and always the same -a 10% rip off.

So did the UK, blame the Swiss seen as it is made there !

Toblerone is a trade mark owned by Mondelez, a US company, that also owns Cadburys among other brands. The Swiss bars are still 400 grams. It was a UK decision to try to keep the retail price the same for 10% less chocolate. They should have supplied the Irish market with Swiss sized bars but why change the habit of a lifetime - rip off the paddies.

brickster69 · 14-09-2018 7:11pm

Sam Russell wrote: »

brickster69 wrote: »

Take Toblerone chocolate bars. Sold in 400 gram bars, but when Sterling fell in value, the bar was redesigned to reduce the amount of chocolate by 10% while keeping the price the same - 360 grams but fewer peaks. We got the smaller bars but at the original price. This was copied over many products and always the same -a 10% rip off.

So did the UK, blame the Swiss seen as it is made there !

Toblerone is a trade mark owned by Mondelez, a US company, that also owns Cadburys among other brands. The Swiss bars are still 400 grams. It was a UK decision to try to keep the retail price the same for 10% less chocolate. They should have supplied the Irish market with Swiss sized bars but why change the habit of a lifetime - rip off the paddies.

Strange
https://www.sainsburys.co.uk/webapp/wcs/stores/servlet/gb/groceries/toblerone-milk-chocolate-400g?langId=44&storeId=10151&krypto=xM4UDAG+hq1L86nlsMKGdXXWkU3fi+6ZoIKPXSgp70H6ZNhPlALb8jIjjwvcWW0EstzmlPLrRpe9k00LfMa+sLqKqKRGurSLhL6kQnszCYrToI2xGjgoM3ab7zLFm0RrusNBKckowuOu/ZDG99H7rBcYNoaXrhepDgA7YDQ5xXs=&ddkey=https:gb/groceries/toblerone-milk-chocolate-400g

brickster69 · 14-09-2018 7:14pm

Here you go
https://www.mirror.co.uk/news/uk-news/toblerone-explains-reason-changed-distinctive-9221784

Sam Russell · 14-09-2018 7:16pm

brickster69 wrote: »

Strange
https://www.sainsburys.co.uk/webapp/wcs/stores/servlet/gb/groceries/toblerone-milk-chocolate-400g?langId=44&storeId=10151&krypto=xM4UDAG%2Bhq1L86nlsMKGdXXWkU3fi%2B6ZoIKPXSgp70H6ZNhPlALb8jIjjwvcWW0EstzmlPLrRpe9k00LfMa%2BsLqKqKRGurSLhL6kQnszCYrToI2xGjgoM3ab7zLFm0RrusNBKckowuOu%2FZDG99H7rBcYNoaXrhepDgA7YDQ5xXs%3D&ddkey=https%3Agb%2Fgroceries%2Ftoblerone-milk-chocolate-400g

Those are registered offices of the marketing arms of Mondelez, and is equivalent to Lidl addresses on their products. We get UK spec product at inflated prices from Mondelez. Always have.

Brexit discussion thread IV

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