Tuesday, 2 May 2017

Top tips on negotiating with the EU

From The Daily Express:

YANIS Varoufakis has urged Britain not to get caught up with EU negotiations in a stark warning to the Prime Minister.

Speaking to the Telegraph, the former finance minister of Greece said: “My advice to Theresa May is to avoid negotiation at all costs. If she doesn’t do that she will fall into the trap of [Greek PM] Alexis Tsipras, and it will end in capitulation.”


Said is said, he knows more about this than most people.

From ITV News:

[Jeremy] said a Labour government would approach the negotiations with "respect and sense".

"She (Mrs May) seems to be sending rather mixed messages. To start negotiations by threatening to walk away with no deal and set up a low tax economy on the shores of Europe is not a very sensible way of approaching people with whom half of our trade is done at the present time."


Correct, nobody should ever 'threaten' anybody, that implies that it is something you don't really want to do, leads to all sorts of confusion and might harm your own position*. You start off by saying what you actually intend to do, i.e. "set up a low tax economy on the shores of Europe". If the EU objects to this, they are perfectly entitled to say so and request politely that you do something else in exchange for concession X, Y or Z on their part.

* Some sick bastards kill people because they enjoy doing it. A kidnapper usually has no interest in actually killing the hostage. What he wants is the ransom money and to leave as little evidence as possible, not a corpse to hide and a murder charge hanging over his head.

16 comments:

Lola said...

"...and set up a low tax economy on the shores of Europe..." Please will someone explain and what actually is wrong with that as an aim in itself? There is no evidence, none, that high taxes are 'good', in an of themselves. Whereas there is plenty of evidence to the contrary that high taxes are 'bad' and low taxes are 'good'.

The implication behind high taxes is that governments spend other peoples money better than they do themselves.

Dinero said...

Maybe Mark Wadsworth has the figures, as far as I am aware UK tax percentage of UK Gdp hasn't varied much since the mid eighties.

Mike W said...

Lola,

'There is no evidence, none, that high taxes are 'good', in an of themselves.'

No, but there is a balance to be struck.

I have this chap on my favs list as I like his input. He calls himself a 'supply side' Liberal. I would call him a 'mixed economy', Classical, Liberal. I also think Kimbel offers the best short answer, derived from Mill, to your problem as posed above.

https://blog.supplysideliberal.com/post/23959666073/what-is-a-supply-side-liberal

He has a double switch at the end that explains his 'supplyside claim', which folks here might like.See what you think.

Mark Wadsworth said...

Din, correct t, not changed much.

MW and L, I don't count lvt as a tax for these purposes, even though Tories very much do.

Bayard said...

"The implication behind high taxes is that governments spend other peoples money better than they do themselves."

That is the basis of Socialism. AFAICS, Socialists think that there is a magic sieve somewhere that, when passed through the population, automatically separates the good guys from the bad guys. The good guys are then employed by the state to regulate everyone else (by definition the bad guys) and spend their money for them, much more wisely than they would do themselves.

Mark Wadsworth said...

B, also from the Home-Owner-Ist point of view, most taxes are very well spent, it's Other People's Money being spent on enhancing and maintaining the value of your Pwivate Pwopertee.

Bayard said...

Varoufakis is right. We should not be negotiating. The so called EU "free" trade area is by no means free. In order to enjoy the benefits of the "free" trade area, we have to pay a membership fee that runs into millions of pounds a year, and, as Juncker et al have made very plain, no fee, no "free" trade, so, all that we should be doing is asking the Eurocrats, "if we simply walk away, what tariff and non-tariff barriers to trade are you going to set up?" Then we can sit down and work out what leaving the EU is going to cost us (we already know how much it will save us) and whether it will be worth it.

Mark Wadsworth said...

B, let's assume the UK does the decent thing and abolishes tariffs, quotes and non-tariff barriers vis a vis all countries in the world as far as possible. Unlikely but plausible.

Then the EU plays the bully and says the UK must pay £x billion a year for "free access" to the Single Market. We can work out whether it is worth paying this ransom payment and how to fund it, whether to retaliate somehow.

But I wish the Bremoaners would admit that this is a pure extortion by the larger trading partner. If half the continent were in trade bloc A and the other half in trade bloc B and both were of similar size, then each could impose a similar size ransom payment on the other and it would actually all cancel out nicely.

Lola said...

MW. ...Then the EU plays the bully and says the UK must pay £x billion a year for "free access" to the Single Market.. Hence confirming my view that the SM is not a free trade area at all, but a protectionist customs union.

Also I agree that LVT is not a 'tax'.

paulc156 said...

I agree that all trade agreements by definition are to a greater or lesser extent, 'extortion'. It's right that the word 'free' is an oxymoron in this context but simply inserted to cover up the 'extortion' aspect of the deal. So that's any trade deal with the EU. It's almost certainly going to be the case if we eventually get any kind of deal with either the US(about the same size as the EU), China (about four times the size of the UK economy)or even India who by the time we might get a deal will be significantly larger than the UK economy. All of whom would carry the whip hand in any bilateral negotiations. It was ever thus. That was the whole point of American military supremacy, as with earlier GB military supremacy. What's just as strange as bremoaners not referring to this reality is brexiters who delude themselves into thinking we will have anything better once finally out of any customs union or that we can still have all manner of corporate link ups and official participation in EU led projects etc even whilst having no truck with EU legal jurisdictions.

Only when we inevitably get a worse deal with the EU than we have now and a bum deal with the US and China (neither of whom give a flying fuck about Adam Smith, let alone Friedrich Hayek) will this be recognised by the general population and by then most of the current cabinet will be occupying multiple positions in multi national/bank boardrooms.

Mark Wadsworth said...

PC, so are you condoning the EU's behaviour?

That's the point, to hell with all this bilateral crap, we'll go unilateral free trade, it will all right itself within a few years.

Key is to prevent surplus countries recycling their GBP by buying up sources of UK rental income (land, utilities, banks etc). LVT-Man will sort that out. So they will have to spend their GBP on UK produced goods and services.

"most of the current cabinet will be occupying multiple positions in multi national/bank boardrooms."

WTF relevance does that have? We pillory the revolving door behaviour of civil servants and ex-cabinet people of ALL parties quite often, but that is a separate topic.

Bayard said...

"if we eventually get any kind of deal with either the US(about the same size as the EU), China (about four times the size of the UK economy)or even India who by the time we might get a deal will be significantly larger than the UK economy."

Please explain why we need a trade deal with China. We don't have one at the moment, AFAIK, but we still do a hell of a lot of trade with them. Stuff from China is cheap enough as it is, it doesn't need to be cheaper. Ditto India.

paulc156 said...

MW. The LVT/trade argument as posited here is coherent and appears plausible in theory. That's as far as it goes though isn't it? The vast bulk of the arguments made by brexiters and especially those in or close to power have never suggested that anything resembling this is their objective. Forget about LVT, I mean tariff free trade for allcomers. It's a proposal Minford might favour and maybe Lillico and that's about it. So should anyone seriously expect this outcome? I suggest not. The point about the revolving door is obvious. The likes of Davis et al know full well that if negotiations go badly and we go to WTO rules their gamble (they need us more than we need them so we get the deal they really want-the mercantilist one they're promising Nissan etc) will have failed and it won't be them that close out, rather the swathes of England and the home countries that mostly supported Brexit on the basis of British jobs for British workers.

B. As above, I don't think trade deals matter that much especially those that we keep hearing about,(Trans Pacific and the aborted Europe US deal) but have been told time and again to expect them in short order as soon as negotiations with the EU conclude...or collapse.

paulc156 said...

PS. MW. No of course I don't condone such practices but they are as old as civilisation and it's Utopian to actually expect something different when you realise that governments in hoc with business interests are calling the shots not the Adam Smith institute.

Dinero said...

"Please explain why we need a trade deal with China. We don't have one at the moment, AFAIK, but we still do a hell of a lot of trade with them. Stuff from China is cheap enough as it is, it doesn't need to be cheaper."

so much stuff on ebay "99p including delivery . seller location China."

actually its probably not literally posted to you from china - maybe the portmouth china nexus.

Bayard said...

Well a lot of it arrives in envelopes with Chinese writing on them...