Abe asks May for 'smooth Brexit' for business

It is unusual. No one has a clue why Abe is even involved. A free trip of no consequence? Of course everyone wants a smooth transition. But what the UK decides it going to be up to the UK, not Abe

It's just a matter of time until Japanese car makers move out of Britain. A direct consequence of Brexit. It's untenable for factories that export 80% of their output to the EU to be facing decades of unpredictability and tariff walls for both their exports and imports.

If Japan and the EU ever manage to finish negotiations on their trade deal, and at the same time a tariff wall goes up around Britian, it could end up being more economical to move some production back to Japan. Good news for Japanese workers and the EU, bad news for Britain.

The Eu is falling apart, so any threats of tariff walls between the UK and Europe are simple fear mongering. Europe needs trade with the UK, and that won't change. Brexit was not against trade with Europe, but against the loss of sovereignty and border controls. The UK, being the first out, will have an advantage in coming years as other countries leave the EU as well.

Europe needs trade with the UK, and that won't change. 

UK-EU trade will only happen if European consumers keep making the choice to buy UK goods. They don't need to do this. It's not something that will continue simply because governments want it to continue.

The cheaper end of the car market is fiercely competitive. Even a €500 euro rise in the price of UK made Nissans or Toyotas could render them uncompetitive in a price sensitive market.

At the other end of the spectrum, Britons will probably keep buying European luxury cars. An extra £2000-3000 will not be a deal breaker, especially when there are few (if any) domestic alternatives. A slightly higher price tag on imports will only add to the prestige factor that these BMW, Mercedes, and Audi customers were already attracted to.

A good picture.

Abe asks May for 'smooth Brexit' for business

Should ask Juncker, Merkel, Rajoy & co instead, not entirely up to May.

In any case, next week's French elections will clarify the situation; a Macron win would boost the EU and shift momentum towards a hard brexit or at least much harder than expected/hoped for.

The effects from UK withdrawal and how future economic and political relationships/ties will develop will only bring clarity when both The EU and the UK except that the next two years are a transition to a point where the current arrangement will revert to WTO rules.

lucidity is acceptance that in 2019, second quarter, the UK will leave the EU. There is no requirement to negotiate, there is no requirement for either party to establish past, present or future budget liability of over and above existing agreed annual contributions. The Lisbon Treaty never presented a coherent method to exit the Union.

Certainly it expedient and prudent to fulfill an obligation to discuss  arrangements to define all twenty eights member states citizens future status. The framework  exists within the Vienna convention on the law of treaties. The political posturing, overly aggressive threats, and tone indicate clearly the European Union has structural economic weaknesses and lacks the political accountability.

There are twenty plus sectors that includes vehicle assembly and manufacturing. The future stability for these industries, investment, employment etc will require calm and rational assessment not the present huffing and puffing.   

Both Shinzo Abe, and Theresa May to relax and take take in beauty of the gardens at Chequers. And enjoy afternoon tea with cucumber sandwiches and slice of Victoria sponge.

@M3M3M3

I don't understand your reasoning. First you say an extra €500 (£420) would render UK-manufactured Toyotas and Nissans uncompetitive, and in the same breath say that a £2000-£3000 increase in the price of European manufactured cars will not be a deal breaker for UK consumers. Really? I mean really!?

The EU needs the UK to buy goods more than the UK needs the EU. The UK accounts for around 10% of the EU's exports market (€295 billion), and the EU accounts for at most 44% of the UK's (€230 billion). That's a very big deficit for the EU. The UK is the second largest consumer of EU goods in the world.

So yes the EU needs trade to happen. Including all of the factory workers in Germany who manufacture Volkswagens and Audis.

So a smooth Brexit is somewhere between a hard Brexit and a soft Brexit?

@itsonlyrocknroll

there is no requirement for either party to establish past, present or future budget liability of over and above existing agreed annual contributions.

The Lisbon Treaty never presented a coherent method to exit the Union.

These two points are somewhat at odds, aren't they? The fact that the Lisbon Treaty doesn't expressly deal with exit liabilities doesn't mean they don't exist in law. We have to look to what the parties to the treaty contemplated when they signed, especially when the express terms are so ambiguous when it comes to exiting.

It would be quite absurd to conclude that the they contemplated a situation where a member state could exit the EU to avoid all continuing liabilities. Otherwise, could 26 out of the remaining 27 member states trigger article 50 tomorrow and leave Latvia responsible for all of the EU's ongoing pension liabilities and winding down costs? It's rather absurd to say yes.

The Vienna convention is neither here nor there because these are ongoing liabilities, not a retrospectve demand. The convention also aims to avoid manifestly absurd and unreasonable results in article 32(b).

The UK needs to settle its existing debts when it exits. This incudes both those that are expressly stated in the treaties and those that were reasonably implied. Enforcement is obviously a bit more difficult.

@Tangerine2000

Cheaper cars which Nissan and Toyota produce are like a commodity. They are very price sensitive. People don't buy them for styling or performance. €500 will be a deal breaker for a European family who only needs a cheap family car to get them from point A to B. They will buy a Volkswagon or any of the other brands on offer. Luxury cars are not as price sensitive.

So a smooth Brexit is somewhere between a hard Brexit and a soft Brexit?

Yes, and helped along with some brex-lax.

The UK accounts for around 10% of the EU's exports market (€295 billion), and the EU accounts for at most 44% of the UK's (€230 billion). That's a very big deficit for the EU.

That seems like a much more crippling disaster for the UK doesn't it? 44% loss vs 10% loss? But in reality how much of it will actually be lost? Will Brits completely stop buying French wine, German cars, Spanish vegetables, etc? Will Europeans completely stop buying all British good? Very unlikely.

What you need to look at is specific goodsand indusries that will suffer disproportionately from tariffs. A competitive industry like the auto industry could be destroyed with a 10% tariff, whereas the UK pharmaceutical industry woudn't.

Hi M3, This is the issue, leading distinguished Law Lords have concluded, drawning up the reasoning behind this conflict.

The concept of European Economic Community was pursued though economic integration and trade. The legal insinuation of/to political integration, a determining factor that followed, could well shape the outcome. Liabilities need a legal distinction above and beyond avoidance and/or obligation.

The economic behind these figures should never have been allow through clear auditing procedures to overhang in such a destructive manner.

There were many opportunities to rectify the situation. Year after year the UK government questioned the structural deficits,budgets and payments. The EU commission chose instead to set up, The European Court of Auditors to sign off the EU accounts. Allowing a fork accounting model to spiral out of control.       

Unfortunately the UK leaving the EU has highlighted this anomaly. Instigating a large number of politicians either side of the channel to prise open political prejudices, both past and present, to declare inflammatory emotionally charged terminology, marriage/divorce etc to deflect debate away from the necessity for fundamental economic and political change.

Instead of embracing this opportunity  to reassess the core principals of EU membership, the EU commission, it's institutions, parliament. and  governments of member states have chosen collectively with hostile intent to wallow in a perpetual state of denial.

@itsonlyrocknroll

I've read the House of Lords committee report on this and found it completely lacking in substance. (By the way, law lords no longer exist and not a single member of the European Union Lords commitee appears to have any legal qualifications, but I'm sure they are distinguished in some other way).

They failed to address the key question of whether the UK's liabilities actually exist in law. They focused instead on how difficult it is to calculate them, assuming they do exist. They rightly concluded that the European Court of Justice would no longer have jurisdiction once the Article 50 process was over, but then went on to state that the obligations might continue to exist under international law, but that this would be very difficult for the EU to enforce. That's pretty much the extent of the report.

They then claimed that the UK's legal position was 'strong'. But it wasn't clear whether this was referring to the strong possibility of escaping enforcement, or that the liabilities don't actually exist in law. Not very helpful is it?

I agree with you on the complexity of the budget and the difficulties with auditing, but the EU is a complex organisation.

Hi M3 yes the committee findings have no weight in law so must be taken as an opinion.

I am referring to the legal responses to question posed and answered, detailed on the list of witnesses. This sheds some light on the procedure. This is where jurisprudence, a legal precedence was debated. My own opinion is to use this two year period to plan for the inevitable. On the assumption that in 2019 UK will leave until otherwise.  But if only all side could look dispassionately there is a positive means to and end, with engagement and acceptance that change is necessary.     

Interestingly there is mention to the 2014 Scottish referendum. A Bank of England assessment which stated that in the event of independence the remaining members of  UK could not demand that Scotland be held liable for any proportion of the UK national debt.  

Even thought David Cameron through his toys at Alex Salmond insisting otherwise. The Governor of the Bank of England quite rightly made the point that to withhold support and deny a newly independent Scotland its adopting Sterling as its currency would be completely irrational.

http://www.parliament.uk/brexit-eu-budget-inquiry

@itsonlyrocknroll

I think there was also some degree of disagreement amongst the expert witnesses. I suspect the only thing the lawyers will all agree on is that we are in uncharted waters with Brexit. We can look at the winding up of smaller international organisations or the breakup of countries like Czechoslovakia to get some idea of what precedents might be out there, but nothing comes close to the EU and Brexit.

From a practical and reputational point of view, I don't see how the UK can be seen as running away from its debts (or possible debts) under old trade deals and then expect to go around the world signing new deals. No country will take Boris Johnson seriously when he shows up making commitments. Perhaps 60 billion is too much, but it might be better to just pay something close to that and move on.

Perhaps they can negotiate it over some of those cucumber sandwiches at chequers. (cucumbers which probably come from Spain, The Netherlands, or Belgium, Europe's top 3 cucumber exporters)

The EU team has not confirmed a specific number. Be prepared for a figure between Euros 70bn/90bn.

Without any 'Mary Poppins, spoon full of sugar' incentive, to generate or encourage consensus it could be argued the entire process is a bootless errand. German politicians have suggested adopting a formula over a given period of time.

A UK general election is problematical politically to say the least.

Experts rarely agree, equal quantity's of ego, condescending smug, superior hoity-toity gets in the way.

Ah, the usual, "Please cooperate and make Japan an exception" speech.

Brexit.

The problem was, to start with, the whole European thing sounded great, so we joined it, Common market and all that, sure yes, very good. But then certain Politicians got more invovled, and yes its understandable that the Brits feel the Germans are taking over and wish to pull the plug. Look back to the War, and who won, and who benefited the most - economically ? Once again Germany has the most money....

If the French far right wished to do something in unison with the Brits, then they'd acknowledge the fact that the German Nazi's forced them to deport their Jews, was it a mistake ? Did they have a choice ? Their mistake would be only to deny it. They need to look at themselves, just at the British Far right, and ask themselves, why look at Stupid untruths.