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UK gov't concern for EU cooperation partially reveals its understanding that further GBP devaluation undermines UK business' marketing EU imported G&S. More important, GBP devaluation may not "stimulate" comparatively weak EU demand for UK imports and teeny share of EU interstate trade.

Continuity in the availability of goods for the EU and the UK (pdf, 21 Aug 2017)

Why is this language careful not to compare EUR price to GBP value, UK legal tender? Because the avg. annual exchange rate 2016, GBP:EUR was 1:1.22. One pound bought EUR 1.22 in G&S; one EUR bought 0.89 pence of UK G&S. UK imp/exp firms, IBs, IT, "farmers" easily exploited the margin by buying any supply chain elements from anywhere with GBP, selling in EUR or GBP.

Context for a future relationship
In 2016, the EU exported  €127.9  billion of consumer goods  to the UK and imported €62.3 billion of UK consumer goods. 4 Producers in the rest of the EU rely on UK firms in their supply chains [DISTRIBUTION, RAW GOODS, INTERMEDIATE GOODS, FINISHED GOODS], and vice versa. In addition, the UK is an important contributor to many European value chains [DISTRIBUTION OF 'VALUE-ADDED' BY MECH. & HUMAN LABOR], and in 2011 the UK content accounted for 1.9 per cent of the total value of other EU member state exports, and 6.4 per cent of all foreign value-added [PROFIT MARGIN] in other EU member state exports. 5

Here, "services" is a euphemism for mechanical & human labor, together.

Principle D: Where the goods are supplied with services, there should be no restriction to the provision of these services that could undermine the agreement on goods
34. Goods and services trade flows have consistently moved in lockstep with each other. 11 Services are essential  for  production  of  goods, for their sale, distribution and  delivery, and  for  their operation and repair. For example,  EU  statistics suggest that in  2015 the EU imported €1.6 billion of maintenance and repair services from the UK, while exporting €2.2 billion. 12 As  our economies modernise and  grow, the link between goods and services is becoming ever more important ...

The pitch is to persuade EU27 to accept cost shifting (again) just in case GBP "breaks" the EUR.

Diversity is the key to economic and political evolution.

by Cat on Wed Aug 23rd, 2017 at 07:37:05 PM EST
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