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!

G20 Hamburg: Opportunity to Share Success, or End of the Established Order?

by John Brian ShannonReposted from JohnBrianShannon.com

There are many things in the economic and political world that are going ‘right’ at the present time and there are many things going ‘wrong’ and depending upon where you are in the world, you see the glass as half-full or half-empty.

Where you are financially… likely determines your views on economics and politics.

In the colonial and postwar eras, if you were happy and supportive of democracy it’s because you lived in a thriving economy in the West or Japan  — and if you were unhappy, you lived in a colonial or post-colonial nation with a ‘frontier’ economy, which is to say, you were dirt poor and local warlords were more powerful than your own government.

However, that’s changing.


Globalization Changed the World

Since the advent of globalization 2.0 (which began with the creation of the Petro-dollar) wealth has shifted from industrialized nations to developing nations as have millions of jobs that were offshored by Western corporations in the pursuit of higher profits — profits which are then distributed among relatively small numbers of rich shareholders.

Over many years this has caused wealth to ‘trickle upwards’ and is responsible for creating the 1 percent economic class.

In America (which always has reliable stats) the 1 percent in that country enjoy more wealth than the bottom 80 percent.

Here’s a nice, short video that demonstrates this; Keep in mind, this video was made in 2009. Things are much worse now… and people wonder why there is political change in the country?

The total wealth of the United States was 54 Trillion dollars in 2009. Let’s see how it was distributed…

As long as we keep in mind that things are getting more dire each year, that will about cover inequality in America and explain the recent and major political changes there — with surely more change to come.


Growing Inequality Isn’t Being Addressed

Inequality is even worse globally. Although different in absolute numbers than America’s situation, the disparity between rich and poor is even greater.

Even today, 71 percent of the world’s population exist on less than $10 per day and 9 million per year die of starvation/lack of clean water.

That’s Failure by Any Standard!


All the good work by NGO’s over decades of time aside, it is a catastrophic indictment of our entire civilization. It seems to be a case of; ‘We can do better, we just can’t be bothered’.

To illustrate the disparity that remains in the world, lets look at the present trend lest you think that world leaders are actually doing anything to solve the problem.

G20 Hamburg
G20 Hamburg: Since globalization 2.0 began, people like President Nixon and Bill Gates have said to Tax the Robots to make a GBI affordable.

Share of the world’s total wealth for the Top 1 percent and the Bottom 99 percent. Image courtesy of OXFAM.

It’s pretty clear this is the Number One problem in our decade and that it isn’t going to be solved at the G20 Hamburg summit. And if the 20 most powerful nations on Earth can’t solve it year-after-year (look again at the trendline) then it isn’t going to be solved.

I think it’s a pretty safe bet that it isn’t ever going to be solved.


Therefore, Let’s Be Realistic and Deal With the Symptoms

Now that we’ve gone ‘realistic’ we can settle ourselves down and figure out a way to compensate the ‘losers’ of globalization — which for now, are the bottom three economic quintiles in each developed nation. Yes, the middle class is being hollowed-out and sooner than you may realize there won’t be a middle class.

(You know, the middle class — the group that was mainly responsible for paying for most of the infrastructure built in the postwar era and for paying many of the entitlements enjoyed by developed nation citizens)

Fortunately, it’s an easy fix.

In the next 10 years, one-in-every-eight jobs will be lost in developed nations to technology, whether robotics on assembly lines, or to computers or other technologies, and it’s happening now.

In some ways those jobs are already gone.

If corporations wanted to they could accelerate their Automation / Mechanization / Computerization (AMC) programs and do it over the next 40 months, not over the next 10 years. That’s a very sobering thought.

Of course, GDP would leap forward, corporations would make astonishing profits, relatively small numbers of Western shareholders would reap even more dividends further enriching the 1 percent, and developed nation corporations would have the ability to better compete with developing economies.

It won’t solve the problem of the 1 percent sucking up all the wealth, because as U.S. and European corporations make larger profits the 1 percent will receive higher dividends.

But the ‘losers’ of globalization — ‘the shrinking middle class’ that are rapidly becoming members of the fourth and fifth economic quintiles — can be compensated.


Compensating the Hollowed-out Middle Class

Why should they be compensated? Because developed nation governments allowed millions of jobs to be given to developing nations (via legislative inaction) when corporations began to offshore jobs in significant numbers in the 1970’s.

But we can solve it now, exactly as President Nixon predicted (and tried to do while in office) by instituting a 5 percent tax on every robot and job-stealing mechanized device based on the value of the work performed (just like an income tax on individuals) to fund a Guaranteed Basic Income (GBI) for unemployed adult individuals.


What do Smart People like Bill Gates say?

Smart people like Bill Gates are also calling for this plan, and one of the best reasons for it is to maintain social cohesion so that we don’t lose our country (via revolution) in the mad dash by small numbers of corporate shareholders for larger dividends.

The GBI would replace all social welfare programs, many of which are duplicated at the federal and state levels, some cities have additional income schemes that exist concomitant with other levels of government. In many cases there is duplication and even benefit fraud — sometimes with the knowledge of people running those programs.

Every adult citizen in America (to use the U.S. for an example) that isn’t employed (as America is a nation of workers, it’s safe to assume *they would still be working if millions of jobs weren’t already offshored* by greedy U.S. corporations and their shareholders) would receive $1088 per month once they have exhausted their unemployment insurance benefits.

Also, every retired person who is trying to live on less than $1088 per month, would have their monthly income topped-up to $1088 per month, via the GBI program.

It isn’t enough to get rich on. But it is enough to live on at a very basic level, and would allow them to stay ready for any job opportunity that may appear.

And local shopkeepers would love it, as every cent would be spent on groceries, medicines, clothing and haircuts for job interviews, and phone/rent/internet access. A real boon to local economies!

In the UK, this amount could be set at £1088 per month, while EU countries could set their GBI at €1088 per month.


Tax the Robots!

It’s so simple to fix the vast inequalities that are getting worse with each passing year. TAX THE ROBOTS!

And cancel the many overlapping, inefficient, and abuse-prone welfare programs by turning them into one automated program that pays every non-working adult $1088 per month (after they have exhausted their unemployment insurance benefits) and to top-up the monthly income of pensioners to $1088 per month.

It’s so simple, even a politician could do it! 😉


Keep Workers Viable Until Needed for the U.S. $1 Trillion National Infrastructure Program

And I’d suggest that other G20 countries do similar. Keep your former workers alive and viable (who after all, are only ‘former’ workers since millions of their jobs were offshored by corporations with their government’s approval) by using a GBI and they will be ready and willing to return to work — a different kind of work than manufacturing, but still, paid work — where they can be part of a great national infrastructure renewal program lasting one decade, or longer.

Most developed nations are at the stage where Generation I and Generation II infrastructure needs replacement and upgrade. It isn’t glamorous, but it is ultra-important.

So, what could the world leaders actually accomplish at G20 Hamburg?

They could decide to Tax the Robots, pay a GBI to unemployed adults after their unemployment insurance runs out until they get a new job and begin to earn more income than the national poverty line, and rebuild and upgrade the national infrastructure on a massive scale.

Now that’s a plan that benefits everyone!


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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!


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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.