Thursday, 4 October 2018

Two apparently unrelated headlines.

From the BBC:

Car sales plunge as Nissan warns on Brexit

That's two quite distinct issues which have distinct causes. One did not cause the other, despite what the BBC's headline implies.

Why have car sales 'plunged'..?

Since 1 September, all cars sold in the EU have had to undergo a new test known as the Worldwide Harmonised Light Vehicle Test Procedure. This has replaced all existing tests of emissions and fuel economy and has caused carmakers to struggle to cope.

SMMT chief executive Mike Hawes said: "With the industry given barely a year to reapprove the entire European model line-up, it's no surprise that we've seen bottlenecks and a squeeze on supply. These are exceptional circumstances, with similar declines seen in other major European markets. The good news is that, as backlogs ease, consumers and businesses can look forward to a raft of exciting high-tech cars and a market keen to recover lost momentum."

So, because of the EU rushing through some new regulations.

What are Nissan (and most other manufacturers) worried about..?

The carmaker said that frictionless trade as part of the EU single market had enabled the growth that had seen its Sunderland plant become "the biggest factory in the history of the UK car industry, exporting more than half of its production to the EU".

It added: "Today we are among those companies with major investments in the UK who are still waiting for clarity on what the future trading relationship between the UK and the EU will look like. As a sudden change from those rules to the rules of the WTO will have serious implications for British industry, we urge UK and EU negotiators to work collaboratively towards an orderly balanced Brexit that will continue to encourage mutually beneficial trade."

And rightly so, the UK government and the EU are equally to blame for messing manufacturers around like this.

(Simply rejoining EFTA and remaining in the EEA would solve most of this at the stroke of a pen; why Nissan assume the UK will leap straight to WTO rules instead of shouting "Rejoin EFTA" from the rooftops is unclear.)


Bayard said...

"why Nissan assume the UK will leap straight to WTO rules instead of shouting "Rejoin EFTA" from the rooftops is unclear."

Perhaps they are (shouting "Rejoin EFTA"...)but the BBC, remainers and Project Fear disciples to a man, wouldn't be telling us if they were.

Lola said...

The new bureaucrats fuel regulation is utterly pointless. The market has already solved the problem - if there was one. There are dozens of competing car magazines publishing real world emmissions / fuel consumption numbers for anyone to check.

George Carty said...

Because remaining in the EEA (or signing a separate EEA-equivalent deal with the EU, as Switzerland has done) would mean the continuation of EU Freedom of Movement, which is widely seen as political suicide given that Leave won the referendum in the first place on an anti-immigration ticket.

I'm curious how many of those who currently advocate EFTA for Britain are Leave voters who wanted it all along, and how many are Remain voters seeking to limit the damage from Brexit.

Mark Wadsworth said...

GC, I'm in the first category. But I could just as well be in the second.

Bayard said...

Me, too.

The freedom of movement "problem" is similar to the Irish border "problem": if the Leave camp hadn't enlisted the aid of the xenophobes to win, it wouldn't be a problem, same as the Irish border, which is only a problem because the gov't is propped up by the DUP.

George Carty said...

MW, the hardcore Brexiters have an obvious motivation for wanting to deny the existence of my first category (pro-EFTA Leave voters) because if as few as one in 25 Leave voters were pro-EFTA then hard Brexit would NOT be the "will of the people" as there would be a majority in favour of staying in the European single market!

Similarly I would argue that the ERG disaster capitalists and the pro-Remain neoliberals have a common interest in portraying the working-class Leave vote purely as a racist anti-immigration vote, as this clears their conscience about throwing the working class to the wolves.

Bayard, from the beginning the Tory Brexiteers were strongly motivated by a desire to make independent trade deals (requiring of course that the UK leaves the EU customs union). This would have required a customs border at least either on the island of Ireland or between the island of Ireland and Great Britain.

Of course, the Tory Brexiteers now reject EEA/EFTA, both because they have to in order to chase the nativist vote, and also because EEA/EFTA membership would mean they were still subject to the EU's imminent crackdown on tax avoidance. (Although I often wonder if the intensity of their opposition – particularly their willingness to treat the UK economy as acceptable collateral damage – implies a stronger motivation than just avoiding tax. Perhaps they have genuinely ill-gotten wealth stashed offshore which they cannot allow to be exposed?)

I do see one fundamental flaw in the EU's conception of freedom of movement: it gives all "EU citizens" the right to live anywhere in the EU, but defines "EU citizen" as a citizen of any EU member state, which means that immigrants from outside the EU can be unilaterally given the right to live anywhere in the EU by a single EU member state. (Isn't it the case that many of the Somali gangsters who terrorized parts of south London can't be deported because another EU member state – I think it was either Denmark or Sweden – had given them citizenship?)

It's comparable to how you need a single market and customs union if you want open borders for goods, not just a free trade area.