This Week in Brexit: Trump Promises a Trade Deal

by John Brian Shannon | Reposted from LetterToBritain.com

This Week in Brexit

On the sidelines of the G20 Hamburg summit, U.S. President Trump found time to meet with UK Prime Minister May and to offer welcome words that the United States will sign a bilateral trade deal with the UK as soon as Brexit is complete.

It’s very good news for the UK and also for PM Theresa May (who has had a rough time in domestic politics of late) and it was obvious that the U.S. president went out of his way to assure Ms. May that a reciprocal trade agreement — one that works for both America and for Britain — is one of his administration priorities.

So much of the UK’s post-Brexit success will hinge on bilateral trade accords because no matter how good the final Brexit agreement, there will be some amount of economic adjustment for Britain in the months following Brexit. A quick trade agreement with the United States will not only ease the Brexit transition, but also  improve the UK (and America’s) economy indefinitely.

It was a classy thing for Mr. Trump to do for Theresa May knowing that her domestic political fortunes have taken a hit. Let’s hope the Prime Minister is able to return the favour at some point during the Trump administration. That sort of respect makes for strong allies.

During WWI, but especially during WWII the relationship between America and Britain was raised to a very high level by Prime Minister Winston Churchill and President Harry S. Truman, and in the postwar era during a time of unprecedented economic growth, President Ike Eisenhower continued the wise course set by his predecessor.

However, it could’ve so easily gone the other way if the leaders hadn’t gotten along.

Both sides would’ve missed geopolitical opportunities of huge importance such as the formation of NATO, the establishment of the Nuremberg trials and the creation of other institutions and agreements such as Bretton Woods and the IMF. Without the ambition of the UK and the power of the United States those things simply wouldn’t have occurred.

Millions of Americans and Britons prospered over the past 72 years because their postwar political leaders *didn’t drop the ball* and made a conscious decision to *make the best of the postwar relationship* for their respective people.


What Kind of Free Trade Agreement Should Prime Minister May and President Trump pursue in the post- Brexit timeframe? (Hint: A ‘Win-Win‘ agreement)

Present-day Prime Minister of Canada Justin Trudeau was still in school when Canada first approached the European Union to ask about a bilateral trade deal, and that many years later it still hasn’t come into effect. (It’s about to, they say)

It will have taken eight years to hammer out and begin to abide by, the Comprehensive Economic and Trade Agreement (CETA) which arrives so late in the game and market conditions do change over time (remember way back to the 2008/09 financial crisis when the CETA agreement was first floated?) that some of the hard-won negotiating points are no longer relevant and may never be finalized.

Canada, EU to provisionally apply CETA in September (CBC)

I’m sure it’s a fine agreement and congratulations are due. However, with America and Britain at the controls of a mutually beneficial trade agreement between two friendly Anglophone nations, it should take less than a year from first discussion to signed agreement.

Though we don’t know what shape an Anglo-American trade agreement might look like from our vantage point in July of 2017, probably the best idea would be for both sides to embrace reciprocity and fair dealing in all trade matters as a way to enhance both economies, and as a way to later attract other Anglophone nations such as Canada, Australia and New Zealand to sign on to such an agreement.

Hitting the Right Note with Commonwealth of Nations member India

What a great thing it would be if all Commonwealth nations eventually agreed to sign on to a U.S. / UK trade agreement. Commonwealth of Nations member India has 1.5 billion consumers alone!

Both America and Britain could add 5% to their respective GDP just on the improved trade flows of doing business in the booming Indian economy.

“Although India’s rapid population growth is part of what accounts for the forecasted jump […] that is only part of the story. Drastic improvement in terms of per-person productivity due to capital investments and better technology will play an even more important role.

“PwC predicts that India’s economy will grow by about 4.9% per year from 2016 to 2050, with only 0.7% of that growth caused by population growth.

“India’s economy is currently the third-largest in the world, and is expanding at an estimated annual growth rate of 7.1% for the 2016-17 financial year. —  India’s economy is forecast to surpass that of the US by 2040  (Quartz)

Both America and Britain just need to hit the right note with India — a respectful note — in order to profit from the massive growth that is available in that burgeoning country.

Working out an Anglo-American trade agreement with a view to adding all Commonwealth member nations within 24 months, guarantees that other powerful trade blocs don’t beat the Anglo-American alliance to supply the rocketing Indian economy with much-needed goods and services.

Projected growth for selected countries – As measured by Purchasing Power Parity (PPP)

UK Brexit free trade deal with United States and with Commonwealth partner India
UK Brexit free trade deal with United States and with Commonwealth partner India.


It’s so obvious but still worth repeating; ‘Hitch your wagon to the fastest horses if you want to place well in the race.’

Britain has the Commonwealth of Nations connections, Britain needs a trade agreement with NATO ally America and with Commonwealth partner India, and the United States wants to increase mutually beneficial trade with Britain and its 2-billion-strong Commonwealth partners.

In all of human history, rarely has such a synergistic match-up suddenly appeared where different but extremely valuable benefits are available to all three parties.

Just as nobody predicted the massive Japanese economic boom which began to form the day after WWII ended, an Anglo-American trade agreement, followed by a Commonwealth trade agreement (before other trade blocs grab the low-hanging fruit!) could match or exceed the massive performance statistics of the postwar Japanese economy.

Dear United States and Commonwealth of Nations, Let’s not miss this rather obvious ‘Win-Win-Win’ opportunity!

This Week in Brexit: UK leaves London Fisheries Convention

by John Brian Shannon | Reposted from LettertoBritain.com

Environment Secretary Micheal Gove has signaled that the UK intends to leave the London Fisheries Convention (LFC) as the first move towards an eventual Brexit completion within 24 months.

The original London Fisheries Convention was signed in 1964 and it allowed vessels from Belgium, France, Germany, Ireland and the Netherlands to fish in British waters in the 6 to 12 nautical mile range which was a significant upgrade for those fishers as UK coastal areas are abundant fishing grounds.

(It was also a significant upgrade for those who ship any kind of contraband to the UK because it allows them to get much closer to British shores and drop their loads with less chance of being detected by police — and people wonder why London has the world’s highest cocaine concentrations in their wastewater treatment plants!)

Once Brexit completes, UK fishers will obviously lose their right to fish in EU waters in the 6 to 12 nautical mile range.


The Tory government said the change will allow more direct control and better responsibility for fisheries management in the 0 to 12 nautical mile range.

“Leaving the London Fisheries Convention is an important moment as we take back control of our fishing policy. It means for the first time in more than 50 years we will be able to decide who can access our waters. This is an historic first step towards building a new domestic fishing policy as we leave the European Union – one which leads to a more competitive, profitable and sustainable industry for the whole of the UK.”Michael Gove, UK Environment Secretary

“This is welcome news and an important part of establishing the UK as an independent coastal state with sovereignty over its own exclusive economic zone.”Barrie Deas, National Federation of Fishermen’s Organizations

“For years, successive UK governments have blamed Brussels for their own failure to support the small-scale, sustainable fishers who are the backbone of our fishing fleet. If Brexit is to herald a better future for our fishers, the new Environment Secretary Michael Gove must keep the 2015 Conservative Party manifesto commitment to re-balance fishing quotas in favour of ‘small-scale, specific locally based fishing communities’.”Will McCallum, Greenpeace UK


In 2015, the British fishing industry caught 708,000 tonnes of fish worth £775 million.

A claimed 10,000 tonnes of fish were caught by EU countries in Britain’s waters in the 6 to 12 nautical mile zone. (2015 statistics) It could be much higher than that, but nobody would know because nobody is policing it!

That’s a minimum of £17 million in fish that leaves Britain each year. Fish that will now be caught by UK fishers (and presumably) will be processed by UK fish processing and packaging plants, adding even more value to the British economy.

Scottish government says UK is right to leave fishing deal (BBC)

It’s true that since 1964 when the LFC came into existence the UK fishing industry lost millions of pounds sterling and hundreds of jobs every year for the privilege of belonging to the then-European Community / now European Union.

As so often happens in the postwar relationship between Britain and continental Europe, it is Britain that winds up subsidizing the continent.

How else can it be termed anything but ‘subsidizing the continent’ when millions of pounds sterling (in this example, raw fish) and hundreds of fish processing and packaging jobs were handed to the continent every year since 1964?

Here! Take our jobs! We’re British!’

Now that PM Theresa May has delegated this poignant case to Secretary Gove with instructions to effect a win for UK fishers, fish stocks will rebound, there will be more jobs for UK fishers, there will be more UK fish processing and packaging jobs, and anti-contraband efforts in UK waters will become more effective.

And that’s no fish story!


Related Article:

This Week in Brexit: What Scotland Missed

by John Brian Shannon | Reposted from LettertoBritain.com

Congratulations to Prime Minister Theresa May for working out a ‘confidence and supply’ agreement with Northern Ireland’s Democratic Unionist Party (DUP) to allow the present minority Tory government to continue in office.

Theresa May strikes ‘confidence and supply’ deal with DUP

And congratulations to DUP leader Arlene Foster for negotiating so well on behalf of her jurisdiction, thereby gaining £1.5 billion in additional infrastructure and other funding.

That’s a ‘Win-Win’ for the Tories and for the Democratic Unionist Party — and more importantly (sorry, Theresa and Arlene!) it’s a ‘Win-Win’ for residents of Northern Ireland.

Theresa May signs ‘£1.5 billion’ deal with the DUP

Infrastructure in Northern Ireland is in bad shape and the funding appears at an opportune moment, as there comes a point when it becomes cheaper to tear down a bridge (for example) than to pay ever-increasing maintenance costs.

The same is true for all infrastructure. Whether roads, bridges, hospitals, schools, airports, or the underground infrastructure that carries water to homes and businesses, all of it has a ‘best before’ date where leaving vital infrastructure spending for too long can cost more than the savings of not doing the work.

The Conservative/DUP deal: what it says and what it means

Of course, £1.5 billion isn’t going to fix it all. But I wouldn’t be surprised if two years of successful DUP ‘confidence and supply’ support gets the residents of Northern Ireland additional infrastructure spending allocations, courtesy of DUP leader Arlene Foster and Prime Minister Theresa May.

And why not? Arlene Foster prevented a divisive and perhaps extended Parliamentary crisis — one that would’ve prevented much good from being done in the United Kingdom.

Speaking of which; See how infrastructure spending is increasing in Northern Ireland, and how it isn’t in Scotland? Not only additional spending, but PM May and DUP leader Foster also negotiated more devolved powers for Northern Ireland.

NOTE to Nicola: It’s great to have a particular ideology, but when it costs your jurisdiction £1.5 billion in the form of missed infrastructure funding, it’s time to review what you think you’re accomplishing!

Loss of opportunity is also a metric by which UK leaders must be measured — it certainly is for heads of government everywhere else — and not as much as it should be, but it’s still an important marker of successful leadership.

Nicola Sturgeon of Scotland’s SNP missed the boat. Arlene Foster of Northern Ireland’s DUP didn’t. And UK Prime Minister Theresa May begins to look like a bit of a deal-maker, which can only be viewed as a good thing as we head into Brexit. Well done, Theresa!


Related Articles:

This Week in Brexit: Expat rights

by John Brian Shannon | Reposted from LetterToBritain.com

Now that Brexit issues of substance have percolated up into the mainstream everyone has stopped talking about the Tories getting their electoral wings clipped and we can now move on to far more important matters! And just in time folks, it was getting a bit much.

The Queen looked positively radiant reading aloud the document that will change European history on both sides of the English Channel.

Some comments were made about her EU-bleu hat which had five golden embellishments reminiscent of the gold stars on the EU flag. If so, it’s the Queen’s prerogative what to wear and if she wanted to send a polite message to the European Union via her choice of attire, why not?

If you asked 20 people what that message might have been, you’d probably get 20 different answers. Note to conspiracy theorists; Knock yourselves out!

You must be dying to know what my read of the Queen’s outfit is: After all, you ARE reading this blog, aren’t you?

I think the Queen knows there are hurt feelings in Brussels and that others in the EU are sad to see Britain leave. And it could be that as she read the speech written to begin the process to take the UK out of the EU, she wanted to politely emote, ‘We are leaving your Union, but we respect you and want to keep good relations with you.’

How could it be other than that? What else would you expect from the reigning Monarch of the United Kingdom? Of course, continental Europe will still need the UK… and the United Kingdom will still need the EU.

Trade, a common European defence, social causes, families, etc. are so interlinked between Britons and the people across the Channel that good relations must be preserved, sparing no effort.


EU Membership is no guarantee of a booming economy

Over 175 nations in the world are not members of the EU, nor do they have trade agreements with the EU.

Some nations, even those in close proximity to the EU declined to join the Union. And some, like Norway, Switzerland and others simply worked out different arrangements with the EU.

Greenland applied for EU membership, then withdrew its application once Greenlanders were consulted via referendum. Yet, Norway, Switzerland and Greenland have continued along just fine without EU membership, as have other European and non-European states.

The UK will get along fine without EU membership

Yes, some things will be better for Britons. Yes, there will be a period of adjustment after Brexit. And minor economic disruptions could occur here and there, at various waypoints along the Brexit timetable.

But what negotiators on both sides must remember is that, ‘What’s good for the UK, is good for the EU.’

Large EU companies like BMW and Mercedes don’t want a recession in the UK! It’s one of their best markets. Large British companies like BP (British Petroleum) want continental Europe to thrive, else how can it remain profitable?

Arguably, small business is even more dependent upon thriving economies on both sides of the English Channel.

Which is why Brexit must be made to work!

If the EU ‘stabs’ the UK, it will be the EU that bleeds! The reverse is also true!

Hurt feelings aside, let’s hope that negotiators on both sides are dedicated to ensuring they aren’t the cause of their own ‘bleeding’ and that they continually work towards a better agreement — one that works for Britons and EU citizens alike.

RECIPROCITY should be the watchword every day until Brexit negotiations are concluded. And thenceforth, all relations between the two sides should be guided by that ultra-important word in perpetuity.

UK and EU -- RECIPROCITY definition by Cambridge University Press

What all this is leading up to is the present discussion surrounding expat privileges in both jurisdictions — succinctly covered by Laura Kuenssberg, Political editor at the BBC, here.

But we can’t have one ruleset for UK citizens who live, work, attend university, or are retired in EU nations… and a different ruleset for EU citizens who live, work, attend university, or are retired in the United Kingdom.


SSTWB: Simple Solutions Tend to Work Best

So with that in mind let’s declare that from January 1st 2018, any EU citizen who moves to (or already lives in) the United Kingdom for any reason (work, school, retirement, or to live as one of the idle rich) must register with the UK government and pay an annual £100 fee per each family member (in the case of EU citizens that move to the UK) and for those Britons who move to the EU for any reason (work, school, retirement, or to live as one of the idle rich) must register with the government of that jurisdiction and pay an annual €100 fee per each family member.

Once they have registered and paid, it thereby proves their status and good intentions to the jurisdiction in which they intend to live (or already live) and they should have the ability to join the NHS (in the case of EU citizens living in the UK) and pay the same NHS contributions as Britons do.

Of course, those contributions are scaled to income so EU citizens would need to provide a copy of their income tax form to the UK government when paying their annual £100 per family member expat tax in order to qualify for the subsidized NHS rate appropriate to their income level.

And all of it should be easily done every year — either online or in a government agent’s office. And it should be a simplified form so that the entire process takes less than 5 minutes. Keep it simple!

  • Name
  • Address
  • Work or University address
  • Income tax ID number
  • Pay £100 per family member here via credit card

UK citizens that live, work, or retire in the European Union should receive corresponding privileges — the only difference being the value of the currency — the €100 annual fee per expat vs. the £100 annual fee per expat.


Issues of Law and (worryingly) Issues of Precedent arise

Some (very unreasonable) EU people suggest that EU laws should apply in Britain! (Yes, some people have actually said that aloud)

Do I have to say it? It is the very definition of Bureaucracy Run Amok!

And further, they’ve stated that EU citizens living in Britain should be bound by EU laws, and any court proceedings that involve EU citizens living in Britain would need to be conducted in an EU-court located somewhere in Britain. Facepalm!

It’s one of the most absurd things I’ve heard, and people who suggest such things need years of psychological treatment (You need to be deprogrammed Comrade Bureaucrat, as you’re no longer in the Collective!) and remains true EVEN IF they support having British courts in the European Union to adjudicate Britons who break UK laws while in the EU.

Stop the insanity!

FACT: The Colonial Era is over. FACT: The United Kingdom was never a colony of the European Union. FACT: The United Kingdom really is leaving the European Union!

Trying to pull such stunts shows how buried in the sand, are some heads in the EU, even at this late Brexit date.

There is only one way it will work

EU citizens must obey the laws and be bound by British courts whenever they are in Britain — and the reverse is just as true — Britons living in the European Union must obey the laws and be bound by EU courts whenever they are in the EU. Full stop! No other choices available!

Although I’d certainly support a reciprocal incarceration agreement, whereby once sentenced, a UK citizen (for example) could apply to serve out his/her prison time in a United Kingdom prison instead of in the EU where he or she broke EU laws.

EU citizens who break the law in the United Kingdom should likewise be offered the opportunity to serve out their prison term in the EU.

And all of it should be simplified and standardized, so that any such prisoner requests could be completed within 48 hours. People in prison have families too — and why exactly should they be punished?


IN SUMMARY

Once we ditch the crazy people from the negotiations, mutual interests should prevail and allow the economies of Europe, a common European defence, commerce, industry, and family ties to remain unaffected, and in some ways improved. Above all else, overall improvement in the multifaceted relationship between the UK and the EU should be the goal for negotiators.

UK Leads G7 in Combined Metric of Economic Growth / CO2 Cuts

Reposted from Letter to Britain

by John Brian Shannon

A new Energy & Climate Intelligence Unit report confirms that Britain has been the most successful G7 nation over the last 25 years on the combined metric of growing its economy and reducing greenhouse gas emissions.

In the 25-years since 1992 when clean air and the corresponding lowering of healthcare spending suddenly became an important policy, Britain grew its per capita GDP by 130% while lowering GHG emissions by 33% — proving that a country can simultaneously grow their economy AND lower greenhouse gas emissions.

Comparatively, Japan grew its per-capita GDP by 83% while increasing its per-capita emissions by 10.5% — making it the worst performer of all the G7 nations. (Not to pick on Japan which has the most difficult population pyramid demographic problems of any nation on the planet)

“It’s really time to slay once and for all the old canard that cutting carbon emissions means economic harm.

As this report shows, if you have consistent policymaking and cross-party consensus, it’s perfectly possible to get richer and cleaner at the same time. Britain isn’t the only country that’s done it – it’s true for most of the G7 – but we’ve clearly been the best of the bunch.

There are signs that these successes are now transferring to the rest of the world.

Globally, emissions have been flat for three years while world GDP has grown by 8%. But science indicates this isn’t enough to fulfil the objective of the UN Convention and prevent ‘dangerous’ climate change – for that, emissions need to start falling soon.

This study should give confidence that with good policies, it’s achievable.” — Richard Black, director of the Energy and Climate Intelligence Unit

And in the United Kingdom, Scotland has led the way on the switch from coal to renewable energy and it rightly deserves many of the accolades handed to the UK over the ongoing clean air success story, while England and Wales deserve much of the credit for growing the UK economy. As usual, Northern Ireland is ‘holding its own’ and although it is presently caught in the middle of an election cycle it seems that it might ramp-up to follow Scotland’s environmental success, post-election.

Scotland sets 50% renewable energy target (BBC)

Pre-Brexit, UK Leads G7 In ‘Conscious Decoupling’ Of Economic Growth & Carbon Cuts (CleanTechnica)

The Road to Decoupling: 21 Countries Are Reducing Carbon Emissions While Growing GDP (World Resources Institute)


By far, the biggest reason UK emissions have dropped in every decade since WWII is a HUGE shift away from coal. At one time, almost 100% of Britain’s electricity was sourced by brown or black coal. Some of which was replaced by hydro-power, and later, by nuclear. Eventually, even more coal-fired capacity was replaced by natural gas, and most recently, by renewables.

The inexorable march away from coal-fired generation in the UK resulted in cleaner air. It is by far the biggest factor in Britain’s ongoing clean air success story.

Still, it’s not enough progress. Scotland has set the standard that the rest of the UK should follow — which will take strong leadership in the House of Commons.


The Way Forward for Clean Air, Lower Healthcare Spending, and a Thriving Economy for Britain

There are many ways to accomplish those goals and everything has its own particular cost. But two pathways jump out as the most beneficial per pound sterling.

ONE: Continue to replace coal-fired power generation with any other power generator. Yes, everything else burns cleaner than coal! Burning home heating fuel is cleaner than coal. Natural gas-fired power generation can be up to 1-million times cleaner than burning some grades of brown coal. Even upgrading coal-fired power generation from brown coal ‘lignite’ fuel to black coal ‘anthracite’ fuel results in astonishing improvements in air quality.

Fortunately, this is the (unevenly applied) default in the United Kingdom, which, when combined with the solid and thoughtful policies of Scotland and Wales, results in cleaner air, lower healthcare costs, and boosts economic growth via lower energy prices.

Record UK wind generation lowers electricity prices (Power Engineering)

TWO: In addition to everything mentioned above, the other low-hanging fruit leading towards cleaner air, to lower healthcare spending and to boost economic output (by lowering energy costs) is via energy-efficiency.

Prime Minister Theresa May should recognize that no matter how cleanly we can generate one GigaWatt of electricity, energy-efficiency equal to one GigaWatt is many times cleaner — and such improvements are typically simple and cost-effective.

Imagine a UK government policy that lowers primary energy consumption (demand) by 30% across-the-board over the next 5-years.

That’s possible with the right policy, and infinitely cheaper than adding the exact same amount of energy production capacity (demand) to the grid.

Cheaper, by orders of magnitude. In fact, the Hinkley Point C nuclear power plant construction could be cancelled AND other proposed power plant projects could be shelved for at least a decade with that much efficiency added to the grid.

Simple programmes get the best results

If the UK government added an energy-efficiency programme shared by three government entities, costs and (importantly) accolades would be shared between them.

The Department of Energy & Climate Change, the Secretary of State for Business, Energy and Industrial Strategy, and the Department for Communities and Local Government, would gain support from voters and expats by supporting a national energy-efficiency programme consisting of a £100 per capita credit on energy-saving electronics and materials.

For a business that employs 5 people, that’s a one-time credit of (up to) £500 towards energy-efficiency at that business, which will buy A TON of efficiency and thereby lower energy consumption/energy bills for that company.

All else being equal; Are those business owners more likely to vote Conservative in the next election? I would have to say, Yes.

Obviously, those 5 employees also live near their workplace and use electricity at home. Therefore, they too should receive a one-time (up to) £100 per capita credit at the hardware store for the purchase of LED or other energy-saving lights, smart thermostats, weather-stripping, insulation, receptacle gaskets and other energy-saving electronics or materials.

Each of those 5 people will now save significant amounts on their monthly electricity bill.

Again, all else being equal; Are those homeowners or tenants more likely to vote Conservative in the next election? The answer is likely to be affirmative if the present government decides to save each one of them, tens or hundreds of pounds per year on their annual electricity bill.

It sounds expensive until you consider the cost of adding 30 GigaWatts to the UK grid to cover wasted energy vs. spending a much smaller amount to conserve the same amount of energy.

There is simply no comparison. Energy-efficiency wins every time, and it’s cheap in relation to the costs of building new generation capacity.

A £100 per capita energy-efficiency credit for the UK is the way forward for clean air, lower healthcare spending, and a thriving economy for Britain (via lower energy costs) and pound for pound, nothing else comes close to accomplishing those goals at such a comparatively low spend.