Theresa May’s New Year of Hope

As far as years go, UK Prime Minister Theresa May must be glad to see the end of 2017 as are many others in Britain and around the world. In matters Brexit, it was a year of low-level chaos and unfulfilled expectations — lots of ‘churn’ but not much actual progress.

Yet the Prime Minister did make some exceptional speeches and unexpectedly reached-out to EU citizens to assure them that while Britain was leaving the European Union, it wasn’t leaving Europe. Well done on both counts, Theresa May.

She also told EU citizens living in the UK that their situation wouldn’t change, aside from having to register their residency with the Home Office and pay a nominal fee to retain their ‘settled status’. And while that didn’t seem to impress small numbers of EU negotiators, it brought great comfort to millions of expats living in Britain.

Of course, it’s all contingent upon reaching a final ‘Withdrawal Agreement’ between the United Kingdom and the European Union, but it’s not too much of a stretch to suggest that the UK would act unilaterally to guarantee the rights of EU citizens working or studying in Britain in the case of no agreement.

Theresa May also offered £40 billion of UK taxpayer money to the European Union; Everyone is unclear what this is for, as nobody from the government has bothered to explain it to citizens.

Many people think that the UK’s share in the EU Parliament buildings and in other EU properties and assets should be sold off to the other EU27 members and the £9.65 billion (estimated) value could be used to pay future UK liabilities to the EU and that there is no need to pay £40 billion. Which seems reasonable.

If there is an actual need for the UK to pay £40 billion to the EU, surely British taxpayers have the right to know what they’re paying for, and to whom.

But if Theresa May has agreed to continue paying the £8.6 billion annual net payment to the European Union until Brexit completes within 2 years (approximately) plus 2 more years to cover the transition period, then that seems pretty reasonable too. If that’s how the £40 billion is being arrived at, there’s not much to complain about there.


With all this reasonableness going ’round it’s no wonder EU negotiators agreed to move to Phase II of Brexit negotiations — trade — a hyper-important part of the post-Brexit relationship on both sides of the English Channel.

Negotiating a mutually beneficial trade agreement between the UK and the EU in 2018 is Job Number One for negotiators on both sides.

Trade between the United Kingdom and the EU27 ranks as one of the most robust trading relationships in the world

  • 44% of UK exports are sold to the EU27, making them Britain’s most important trade partner.
  • 16% of EU exports are sold to the UK, making Britain the EU27’s most important trade partner.

Which makes the whole ‘getting an agreement’ discussion largely academic — as there will be an agreement or hundreds CEO’s on both sides of the English Channel will be breathing fire down the necks of UK and EU negotiators every day until an agreement is reached. “Don’t even think about coming home without an agreement!” (Yes, just like that)


UK/EU Trade: Where do United Kingdom Exports Go?


Where do UK exports go? UK Office for National Statistics 2015.


UK/EU Trade: Where do European Union Exports Go?


The EU's largest single export market is the UK. European Commission Export Helpdesk.


So There We Have It: They Can’t Live With Each Other, But They Can’t Live Without Each Other!

Which is a very good thing.

And because companies on both sides need to keep their biggest export market open and flourishing, there absolutely will be a reasonable trade deal — one that both sides can live with. There is simply no alternative.

Which neatly explains the title of this blog post ‘Theresa May’s New Year of Hope’ because Job Number One for Brexit negotiators on both sides must be working a successful trade deal — and every CEO in Europe will be watching with keen interest, to put it very mildly.

You don’t want to be the trade negotiator coming home without a deal and having to tell the CEO of Volkswagen or BP that you were too incompetent to get a deal. Yikes!

There will be an excellent UK/EU trade deal in 2018, a trade accord that both sides will be rightly proud of — one that works for CEO’s, citizens and governments throughout Europe.


Trade As Saviour

As the focus will be on trade in 2018 (something that both sides must preserve if today’s politicians want to keep their jobs) the new year looks to be one of the better years for relations between the UK and the EU27.

Let’s hope that Phase II of the Brexit negotiations move smartly along and that (if a Phase III is required) the momentum that gets built throughout 2018 works to facilitate friendly and workable solutions to any remaining issues between the two blocs.

Politicians and negotiators on both sides of the Brexit divide have everything to gain by bringing home a fair and workable trading agreement and everything to lose if they don’t.

Therefore, let 2018 be ‘The Year of Hope’ as 512 million European citizens are counting on their politicians and negotiators to open windows of opportunity as big as the sky, and to create even more justice and fairness for all Europeans, no matter where in Europe they may live, work, or play.

No matter which side of Brexit you’re on, the kleef&co team wish you a Happy, Safe, and Prosperous New Year!

Written by John Brian Shannon

Day 548: Pass the Eggnog & Where Are We on Brexit?

by John Brian Shannon | Reposted from Letter to Britain

“It was a dark and stormy night; the rain fell in torrents — except at occasional intervals, when it was checked by a violent gust of wind which swept up the streets (for it is in London that our scene lies), rattling along the housetops, and fiercely agitating the scanty flame of the lamps that struggled against the darkness.”

Oops, that was another lifetime. But in the here and now, London rain still falls in torrents, violent winds sweep up and down the streets, and the flames of freedom still struggle against the forces of darkness.

Our protagonist is of course the redoubtable Theresa May, Prime Minister of the United Kingdom who has given repeated assurances since her July 2016 inauguration that “Brexit means Brexit” and “Brexit will occur on March 29, 2019” and has repeated many similar expressions of intent.

But not much has changed.

For all the talk by Remainers and their skulking ‘Project Fear’ campaign, none of their shrill accusations have materialized; The economy didn’t crash, unemployment didn’t skyrocket, the deficit hasn’t increased, and governments haven’t fallen.

It’s been a rather bit dull, hasn’t it?

For all the talk by Leavers and their loud promises to save £350 million per week (and redirect the money to the NHS) and to save UK taxpayers £8.6 billion (net) per year, and the largely unfulfilled increase in British exports due to renewed interest in UK goods, not much has happened there either.

In fairness to the Leave campaign, as Brexit hasn’t yet occurred they can’t be faulted on promises which can’t be kept until Brexit completes.


So, What Has Happened?

Politicians on both sides of the Brexit line have been talking, and they’ve decided to talk some more.

Apparently, the talks are going so well that one side wants to pay the other side £40 billion in advance of gaining a bespoke trade deal, while the other side say that talks have progressed so well that they’re going on to ‘Phase II’ — more talk — but this time the talk will be about trade.

Oh, and March 29, 2019 appears to be the mutually agreed official Brexit date, but negotiators on both sides have created a policy ‘Mulligan’ allowing them to postpone the official Brexit date in case one side misses the target date by a few days or weeks.

How very European.

And you must know they agreed on the Mulligan as the first order of business, but then delayed announcing it until concluding their ‘Phase I’ negotiations.

Here in North America such concepts as missed deadlines aren’t tolerated. ‘Get it together or you’re fired’ is how deadlines are kept in the U.S.A. (and no Mulligans)


What’s on the Horizon?

Next-up appears to be working towards a trade deal by October 29, 2018 — as a lack of agreement by that date will indicate a WTO-style Brexit.

NOTE: October 29, 2018 is cited by many as the latest possible date to sign a Brexit trade deal and still have time for industry and government to properly implement such agreements.

Newspaper columnists are wondering aloud about a CETA-style deal between the UK and the EU. (CETA is a trade deal between Canada and the European Union that took 7 years to negotiate and even into the 8th year isn’t fully implemented)

Still, CETA is an excellent basis upon which to build a future trade relationship with the European Union. The UK could do worse than using CETA as a template to forge a new trading arrangement with the EU. Such an agreement could be further tailored in later months or years to meet specific needs on both sides of the English Channel.

But as of December 2017 we’ve not seen much urgency for trade discussions. However, as October 2018 draws close, the speed at which things happen will increase exponentially.

Nobody wants to fail at getting a trade agreement — UK and EU industry would crucify politicians who didn’t sign a viable and timely trade agreement — and voters would likely punish their respective politicians at the following election. Yet, if some horsepower isn’t soon applied to the slow-motion Brexit discussions, policymakers on both sides are likely to find themselves speaking from the opposition benches after the next election.


Either Way, We’re On Our Way to a Cordial Brexit

Whether a trade deal is signed in time or not, in typical European fashion a cordial parting looks set to occur.

Three years will have passed from the June 23, 2016 Brexit referendum and the only variable seems to be whether politicians will manage to negotiate a free trade deal that is ready to sign by October 29, 2018 thereby leaving enough time for implementation ahead of the final Brexit date of March 29, 2019.

Only 461 days to go, Prime Minister…

UK Brexit, PM Theresa May.

With Theresa May at the helm for the foreseeable future it may take plenty of time to arrive at certain Brexit waypoints. Yet irrespective of ongoing Brexit frictions — UK relations with the European Union are likely to improve even from their present (high) level. Which in the final analysis, means that quiet diplomacy may be the most profound of Theresa May’s political qualities.

Wishing you all a very Happy Holiday season and a safe and prosperous New Year!

 

Should the UK Have an Opinion on Catalonia?

by John Brian Shannon | Reposted from Letter to Britain

As long as the UK remains a fully paid-up member of the 28-member European Union it seems fair that the government should have a position on Catalonia’s recent move toward greater autonomy. Which in recent weeks, has grown beyond simple autonomy within the Spanish federal government architecture to seeking full independence, but the attempt has since been knocked down by the Spanish authorities.

Had the UK passed the Brexit threshold by now, it would be difficult indeed for the British government to have any public opinion at all as it then becomes a very different thing. It’s fair comment to opine on the internal politics of a fellow EU member state, but it is quite another for a non-member to criticize the goings-on in a foreign country.

For that reason, it’s well within Theresa May’s purview as the Prime Minister of a paid-up member of the European Union to comment on issues Catalonia.

Nigel Farage MEP certainly didn’t hold back from informing his viewers about his opinions on the Catalonian situation and it’s difficult to find flaws in his argument. See video here.

Certainly, it was a tragedy that 900 mainly peaceful protesters were injured and/or arrested by Spanish federal police, although many of those charges against protesters may be dropped in exchange for the much more serious charges against the police being dropped.

Look for this to happen on a case-by-case basis. Many of the police are reputed to have used excessive force against the (most probably annoying, but otherwise peaceful) protesters.

Until such times as Britain is no longer an EU member state, the UK and its citizens have every right to comment on the unfortunate Catalonian situation, but after Brexit I hope the UK government feels constrained about commenting, as it will then be a comment on the internal affairs of a political bloc (the EU) a sovereign nation within the EU (Spain) and a state within that nation (Catalonia)


“What Goes Around, Comes Around”

This has been true since the universe began and were the British government to attempt to unduly affect the outcome (either way) in Catalonia, eventually it could work against the United Kingdom and conceivably against the Commonwealth as there are rumours from time to time about disaffection among jurisdictions in either entity.

Therefore, it’s best for the UK government to comment in good form only and avoid trying to make political hay against the EU bloc simply because some in the UK may have other frustrations with them.

Hey, they’re frustrated too. It isn’t a one-way street. Let’s just get the Brexit done and not unduly antagonize the EU Parliament or its individual member states in the meantime, not only because it’s the right thing to do, but because that works better for the UK in the long run.


Related Graphic:
Catalonia referendum 2017

It’s time to grow the market! (and not fight over market share)

by John Brian Shannon | Reposted from LettertoBritain

A sea-change is upon the United Kingdom whether some have come to that full realization or not

The relationship between the UK and the rest of the world is beginning to change as the UK exits the European Union. Not only that, but the relationship between the UK and the other Commonwealth countries is changing. And while all of that is occurring, it is also a time of change in the postwar international order.

These changes are coming and we have no ability to stop them. What we do have though, is the ability to choose whether these changes are ultimately negative or positive for Britain.


The days of ‘Win-Lose’ politics are over

When every second country (seemingly) has WMD weapons, suddenly Win-Lose doesn’t work anymore. Do we really want to solve every issue between nations with nuclear weapons? Because eventually, that’s what it will come to.

It’s great if you ‘Win’. But then you ‘Lose’ because the fallout from large nuclear explosions travel around the Earth a few times per season and nuclear particles continue to exist in the environment for decades (some isotopes linger for 20,000 years) and as everyone needs to breathe the air, eventually you will inhale and, well, (do I really have to tell you this?) your lungs will filter the radioactive isotopes out of the air.

The ‘Winners’ of a WMD conflict will also become ‘Losers’ of that conflict within months. It’s nonsensical to consider nuclear war in the 21st-century.

All of which means, that in the final analysis, international hot points must henceforth be solved by the cool hand of diplomacy.


The days of fighting for Market Share are over

More than any other country, fighting for market share no longer makes economic sense for the UK, because every other country/corporation is likewise fighting for market share.

Larger countries with serious export expertise and fully developed and long-term foreign client relationships have a distinct advantage over a born-again United Kingdom re-entering the exporting world. Fighting for market share against far superior marketing superpowers like Germany and China is like paddling upriver in a hurricane, and good luck with that.

Rather than fighting for Britain’s slice of the pie, the UK should be the one country in the world that works to make the pie bigger for everyone! wherever free markets exist.

In that way, whatever global growth occurs will benefit all exporters equally — including Britain’s born-again export economy, because the UK will have as good a chance as any to capture some of that growing pie — as opposed to fighting companies well entrenched in foreign markets and trying to steal tiny percentages of their total market share. See the difference?

“Don’t fight a battle if you don’t gain anything by winning.” — Erwin Rommel

Rommel was right. And to adapt his truth to Britain’s new place in the world, fighting for market share in countries that are already well-served by European and Chinese exporters will gain British exporters very little and could create trade frictions between Britain and the European Union which is still the UK’s largest trading partner in the 21st-century. We don’t want that.

Grow the entire market instead of fighting for tiny increases in market share
Grow the entire global market — instead of fighting for tiny annual increases in market share.

‘Win-Win and Growing the Market vs. ‘Win-Lose’ and fighting for Market Share

Win-Win political thinking and growing the global market is the best prescription for Britain’s economic future.

Countries with rapidly growing economies like the BRICS countries and many Commonwealth nations are the best places for Britain to concentrate its export efforts. By helping those countries to succeed more than they would have without the UK’s assistance, Britain can grow its export base by selling to people in rapidly growing developing nations enjoying their newfound discretionary income.

It’s all about rising Disposable Income in Developing Nations

The example of India is most poignant, because in that country the average discretionary income of citizens is doubling every five years; All Britain’s leaders must do now, is to work respectfully with Prime Minister Narendra Modi and his ministers to the end that British exports to India are welcome and that Indian exports to the UK are just as welcome. (It helps if both countries aren’t manufacturing and selling the same items, of course) If India sells toasters in both countries then Britain should sell kettles in both countries, if you take my meaning. The less overlap, the better.

A few years from now, when a larger percentage of India’s 1.5 billion population can afford to buy a new car, perhaps Indian companies will offer tuk-tuks, small cars and farm trucks for sale in India and the UK, while the UK sells family sedans and Landrovers in India and the UK.

Any other method of working to each country’s strengths — without stepping on each other’s toes — would also be profitable for companies of both countries. What matters is that whatever method is chosen works for companies in both countries.

With the right approach to rapidly growing countries and some standardized and respectful trade rules, the UK could help to grow the global pie, dramatically increase its own exports, keep good relations with exporting superpowers in Europe, China, and America, and be seen as a ‘White Knight’ to developing nations by playing a pivotal and ongoing role in helping them to build their economies.

That future is so much better than bickering over fractions of market share with other (and economically superior) exporting nations — the very countries that Britain depends upon in many ways.

Here’s to ‘Win-Win’ paradigms and growing the global economic pie; A plan that will work for the United Kingdom more than almost any other country — while preventing harm to Britain’s present and important trade relationships.

Northern Ireland and the ‘Soft Border’ Option

by John Brian Shannon | Reposted from Letter to Britain

Thanks to the dedication of thousands of people, the problems that plagued Northern Ireland for decades have all but disappeared. While we mourn those lost during ‘The Troubles’ we must move forward and provide the best possible future for the people of Northern Ireland and the Republic of Ireland.

The best way to continue to move forward is for a ‘soft’ border between Northern Ireland and the Republic of Ireland so that the free movement of people and unimpeded trade may continue along the 310 mile border.

Many people on both sides of the border meet for tea, travel across the border to shop, or are employed on the other side of the border and it would be unfair to require these people to face a regular border crossing twice daily. And a hard border would definitely hinder trade, which trade is a vital part of the local economy along both sides of the divide.


A dedicated ‘Commonwealth and Ireland’ line at UK ports of entry

The smartest thing the Home Office UK Visas and Immigration department could do is to create a separate queue line at all UK ports of entry and mark it “Commonwealth and Ireland” so that people from Commonwealth countries or from the Republic of Ireland have a dedicated and streamlined entry into Britain.

In this way, goods and people can move much more efficiently between those jurisdictions.

If it sounds like I want to favour people from Commonwealth nations, you’re right. If it sounds like I want to favour people from Northern Ireland who may decide to fly to Britain, you’d be right. And if it sounds like I want Republic of Ireland citizens to easily travel to any part of the UK, you’d be right in that assumption.


Special Treatment at UK ports of entry: A ‘Nexus Card’ for frequent travelers between Ireland and any UK port of entry

Here in North America, citizens who cross the U.S. / Canada border can apply for a Nexus Card or an Enhanced Driver’s Licence — either of which dramatically speed border crossing times for holders of those cards — and not incidentally, also lowers wait times for the people in the non-Nexus lineups because fewer people (or vehicles) are traveling in that particular queue — it’s a bonus for frequent travelers in North America.

Such a streamlined customs experience should be extended to all Irish citizens as a courtesy — and for the Republic of Ireland in exchange for their help in patrolling and securing the soft border with Northern Ireland.


The UK Government (UK.gov) Paper on Northern Ireland and Ireland

Stormont is the seat of the Northern Ireland Assembly and is located in Belfast, Northern Ireland.
Stormont is the seat of the Northern Ireland Assembly and is located in Belfast, Northern Ireland. Image courtesy of visitbelfast.com

“The UK government pledges to protect the Belfast Agreement and Common Travel Area in new position paper published August 16, 2017.

The Government has today published a comprehensive paper which outlines the UK’s position on addressing the unique circumstances of Northern Ireland and the land border with Ireland.

The position paper — which has been published ahead of the August negotiating round — states that the Government will protect the Common Travel Area (CTA) and associated rights for UK and Irish citizens, and put upholding the Belfast (‘Good Friday’) Agreement at the heart of its Exit negotiations.

The paper also puts forward proposals on avoiding a hard border on the movement of goods — making clear the UK’s position that there should be no physical infrastructure at the border — and plans to preserve the wide range of institutional cooperation between Northern Ireland, Ireland and Great Britain including for the energy market.” — From the UK.gov website


Trade Between the UK and the Republic of Ireland

Billions of pounds sterling in trade crosses between the UK and the Republic of Ireland and a significant amount of it is spent in the small and medium-sized business (SME) trade. Keeping the border open, yet enhancing security will be a challenge for both the UK and the Republic of Ireland, but with good will and some visionary thinking it shouldn’t be too difficult to get an agreement that benefits the largest number of people.

Brexit - Ireland and UK trade
Brexit – Ireland and UK trade in numbers. Image courtesy of cso.ie

A Soft Border between Northern Ireland and the Republic of Ireland is in everyone’s interest

For as long as the Republic of Ireland remains a member of the European Union it’s in everyone’s best interests to keep the soft border arrangement and to work together to enhance security on both sides of that soft border by any reasonable means.

If that means having facial recognition technology and vehicle license plate readers at all government buildings and properties, ferry terminals and international airports in Northern Ireland and Britain, it’s a small price to pay to preserve and enhance security for the EU, for the Republic of Ireland, and the UK including Northern Ireland.

The soft border between Northern Ireland and the Republic of Ireland must work for citizens of each country, for small (and large) business, and it must ensure a high level of security for both the EU and the UK. This is one Brexit negotiation that must succeed for the benefit of all.


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