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Theresa May’s New Year of Hope

by John Brian Shannon

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.

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 that EU negotiators agreed to move to Phase II of the 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.


Everything you want to know about the UK trade with the EU. Image courtesy of FullFact.org and the ONS.

Everything you want to know about the UK trade with the EU. Image courtesy of FullFact.org and the ONS.


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, we at Letter to Britain wish you a Happy, Safe, and Prosperous New Year!

 

Day 548: Pass the Eggnog and Where Are We On Brexit?

by John Brian Shannon

“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.

Hehehe, I love the Europeans. Really I do, while knowing full well that if an alien attack ever occurs, the interstellar invaders will be told in the most indignant of tones “Oh no old boy you mustn’t attack now, it’s tea-time — and as civilized people we must agree to delay the start of the war.” (Or some variant of that)

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 is the most profound of Theresa May’s political qualities.

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

 

Theresa May Cuts a Deal With the EU

by John Brian Shannon

Just as Theresa May’s government appeared to be on the brink of collapse, the European Commission President asked the British Prime Minister to meet him in Brussels to jointly announce that negotiators had achieved the breakthrough to move forward to Phase II of the Brexit process.

EC President Jean-Claude Juncker said that “sufficient progress” had been made on Phase I discussions by December 8th, and the parties can now move on to matters of trade. Which is a great relief for some. For others, not so much.

Member of the European Parliament (MEP) Nigel Farage is on record as being against anything other than a complete Brexit with only the timeline to be negotiated.

Indeed, this is the position of many of the 17,410,742 people who voted for Brexit in the June 23, 2016 referendum that decided the United Kingdom’s future in, or out of, the European Union. And as negotiations drag on and as more political plays come to light courtesy of the ever-present media, the number of Britons who support Brexit are increasing, while those who supported it from the beginning want a faster, ‘harder’ and more complete Brexit.

If those who voted Remain were once within striking distance of preventing Brexit, their hopes are surely dashed now. ‘Off to Sgt. Pepper’s Lonely Hearts Club Band, are we?’

We hope you will enjoy the show.


So, What Did Theresa May Agree To on Behalf of All UK Citizens?

a) In May’s favour, it appears she agreed to continue negotiating with the EU, more than anything else

For now, nothing will change in the UK until Brexit day. The existing EU customs and trade union will continue to be in effect and the European Court of Justice (ECJ) remains the top court for the entire European Union, including the UK.

It’s also been reported that the ECJ will continue to be the court that rules over EU citizens living, working or studying in the UK for up to 8 years after Brexit — thereby giving European Union expats full access to the British court system — but also full recourse to the ECJ.

Essentially,  EU citizens living in the UK will enjoy the protection of two court systems, while UK citizens will have the protection of only one court system.

Further, Theresa May has agreed that from December 8, 2017 until Brexit completes (whenever that  is) the UK will abide by all laws and regulations passed by the European Parliament, the European Commission, and that the UK will accept European Court of Justice rulings. The final Brexit date has been suggested as March 29, 2019 but at this stage anything could happen including the government bodging the job and not getting voters their Brexit for another decade.

Goodness knows what kind of legislation the EU could pass during that time, yet the United Kingdom would be obligated to follow both the spirit and letter of that legislation. And EU citizens living in the UK would have more rights than UK citizens due to the ECJ deal. Let’s hope they don’t send an extra 5 million migrants to Britain annually (for example) as the UK would be obligated to accept them under the terms of this agreement.

If breaking the UK Treasury and maybe breaking the country is the goal of the EU (or if it ever ‘becomes that’ due to new politicians coming to power in the EU/EC) that’s surely the way to accomplish it. Certainly, the United Kingdom is in a precarious position from now until the day Brexit occurs.

Finally, there will be no transition period for Gibraltar.


Oh, and it Cost £40 Billion

Did I forget to mention that? Yes, they did too at their joint press conference, until a reporter asked about it.

Now the UK is obligated to pay £39 billion to the EU, and will continue to pay £8.6 billion (net) to the European Union budget until such times as the UK is no longer a member of the union.

Nobody has really said what the £39 billion is for — other than to say it covers the UK’s future obligations to the EU (which, reliable sources have said should only amount to £6.15 billion) and let’s keep in mind that the United Kingdom remains part-owner of many EC and EU buildings and properties — including the Parliament buildings in Brussels, Strasbourg and Luxembourg, and Britain’s share in the value of those and other EC/EU holdings exceed £9.65 billion.


Now for the Sweet Part of the Deal

Thus far, it sounds like a pretty one-sided deal in the EU’s favour — and many are now calling Prime Minister May ‘Theresa the Appeaser‘ after former British Prime Minister Neville Chamberlain who tried to ‘appease’ Adolf Hitler and his Nazis prior to Britain’s entry into WWII — for which he was unceremoniously booted from the Prime Minister’s chair never to return.

Others have called the deal a ‘sell-out’ of British interests, while other groups claim that Theresa May (an admitted Remainer) is trying to scupper the deal by using the high cost of Brexit to get more Britons over to the Remain side.

b) Maybe Theresa May is smarter than everyone suspects

What if it’s true that this deal is merely the deal that the UK will be forced to honour if UK and EU negotiators can’t arrive at a better deal that supersedes this deal?

There is real incentive for Theresa May and her Conservative Party to excel here because it is 100% certain they will lose the next election if this deal isn’t replaced by a better deal prior to March 29, 2019.

Prime Minister May will thereby have almost as much power as a wartime Prime Minister to get a better deal done, and that’s as good a way as any to move things along.

What if she now spends a year trying to negotiate a better deal knowing that at worst the present agreement is the worst that can possibly happen? A little brilliant, I’d say.

c) So she spends a year negotiating uphill with the EU trying to get a better Brexit deal

And in the meantime, the worst-case scenario is survivable by her country but unsurvivable by her party if they want to win the next election.

In the simplest terms, if Theresa May’s Conservative Party don’t fully cooperate with her to gain a better Brexit deal, they will by default, have handed the reins of power to Labour’s Jeremy Corbyn.

d) By virtue of the December 8th baseline agreement, Theresa May now ‘owns’ her party until March 29, 2019

Which means that the Prime Minister with her party helping, must find a way to improve on the present deal and they have one year to make it happen.

As one Machiavellian to another; Nice touch, Theresa.


Prime Minister Theresa May in the House of Commons on  December 11, 2017 where she comments on the December 8th Phase I agreement with the EU.