BREXIT - the real deal

[franky1]

so what is happening behind the scenes that make UK politicians and money men excited about brexit.

well. here is the main buzzword. "freeports"

when UK was part of europe UK had to obide by euro rule. meaning they could not make freeports.
also produce from the rest of the world was traded at Euro tarrif rates.
so UK hands were tied on both sides and had no control of what comes in or goes out


so UK getting in american meat had to pay set tarriff
so US getting in british meat had to pay the set tarriff

but here is the thing.

imagine america had a tarrif with europe of 20% for a certain product. but the UK product was only 10% after brexit with europe.

well now the UK can nominate a shipment port as a "freeport" where america sends the produce to the UK at X% tarriff. and then the UK processes a new order and sends it  forward to europe at 10%
the UK can then charge that 10% plus any profit to america(X)

in short if UK charge america 18% then america get to send goods to europe 2% cheaper and UK get 8% as money they can keep. pure profit

yep UK is going to get alot of profit for just being a paper middle man for goods coming from the rest of the world to europe via the UK

this deal can make billions
yep america does 290billion trade with europe. so for every 1% middleman profit uk makes from freeporting. is $2.9billion. for doing basically nothing. and thats just america. then add in canada. south america. it all adds up

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[paxmao]

There are rules on the content and origin of the goods imported to avoid what you say - that´s international trading 101.

What you say works partially if the UK uses the opportunity to get that said meat cheaper than in the EEU, make it ha processed food in UK and then export it to Europe, as most of the added value would be on the UK processing in that case and would comply with the origin rules - but the margin would be much less.

[franky1]

There are rules on the content and origin of the goods imported to avoid what you say - that´s international trading 101.

What you say works partially if the UK uses the opportunity to get that said meat cheaper than in the EEU, make it ha processed food in UK and then export it to Europe, as most of the added value would be on the UK processing in that case and would comply with the origin rules - but the margin would be much less.

australia are importing wine in large tankards to the UK. the UK bottle it and promote it as australian wine bottled in the UK.
its then sold in the EU without tarrif. meaning australia save:
20% on tarrifs
save on breakages in shipping because they dont bottle it in australia any more.

america send chicken to the UK. it is then breadcrumbed and sold as southern fried american chicken processed in UK
america saves tarrifs when then selling it to the EU

other examples are electrical components sourced all over the world and then making phones/devices in asia. asia ship it to the UK so they can upload english firmware and package it in shiny boxes. its then deemed british produced and sold to the EU

there are many things that also need just paperwork administration to get a 'change of origin'

normal customs ports(dover) have very strict 'origin' requirement proofs. which is why dovers port is having a headache this month. but freeports are designed to bypass those headaches..
.. hense why they are an actual thing thats suddenly in demand again

remember that a freeport is not the same customers port as dover. as thats the point

[paxmao]

There are rules on the content and origin of the goods imported to avoid what you say - that´s international trading 101.
...

...

there are many things that also need just paperwork administration to get a 'change of origin'

...

remember that a freeport is not the same customers port as dover. as thats the point

When that door is open, is usually by design. Origin is a lot about added value: e.g. Bulk wine 1$ 10 liters, the moment you bottle and label 10$ per 1 liter.

In any case, the new arrangement with the EU is fluid, so that type of trick can only be played if is part of a wider deal.