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How to Create a ‘Win-Win’ Northern Ireland Agreement

by John Brian Shannon

As the official Brexit date of March 29, 2019 approaches the main sticking point to an orderly Brexit now appears to be the lack of agreement between the UK and the EU on whether or not there will be a hard border between the Republic of Ireland (ROI) and Northern Ireland (NI).

But why there exists a sticking point that involves Northern Ireland in the Brexit negotiations is anyone’s guess as there’s no good reason for the EU to treat Northern Ireland any different from the way it treats the rest of the UK. Northern Ireland is a part of the United Kingdom and has been since the year 1800 and such was formalized in a treaty that covered the matter and many other matters between Great Britain, Northern Ireland and the Republic of Ireland in 1922.

Q: What would drive European Union negotiators to want to inflame tensions in the region? How could that possibly benefit the EU?

A: The simple answer is that EU leaders don’t want the UK to leave the union and one way to accomplish that goal is to make Brexit appear to be a hopelessly complicated situation and EU negotiators would thereby hope to win in the court of public opinion. The theory is that UK citizens would then apply enough pressure on HM government to give up on Brexit.

Which has a microscopic chance of succeeding. To wit: Widely published online polls circulate in the UK media say things like; ‘Most Remainers these days just want to get Brexit over and done with’ due to the economic uncertainty surrounding Brexit.

And the Brexit timeline doesn’t seem to faze EU negotiators either — who it must be said — are representing the interests of the EU27 and not the UK, nor of individual Britons. Which puts a different spin on things, doesn’t it?

“Countries don’t have friends, they have interests.” — Sir Winston Churchill

Other items like the Belfast Agreement (read the complete text of that agreement here) also known as the Good Friday Agreement which lists no requirements for a hard border, soft border, or no border… also doesn’t seem to matter to EU negotiators.

And of course it doesn’t. Why would it? The EU’s negotiating teams are working for the interests of the EU27 — as you might expect — and not the interests of the UK nor of individual Britons. It’s preposterous to expect European Union negotiators to work for the interests of any country other than the EU.


Option One: The Question Everyone Asks: Why Not a Regular Land Border Like Every Other Country in the World?

The simplest solution would be to create a normal land border between the UK’s Northern Ireland and the EU’s Republic of Ireland along the entire 310-mile-long boundary between the two countries and everyone on both sides could thenceforth act like adults and there needn’t be any more trouble there than any other border in the world.

Practically every country in the world has a border and rarely are there problems with this modality in the 21st-century.

Maybe it’s time for both sides on the island of Eire (which both the Republic of Ireland and Northern Ireland share) to craft a new agreement that creates a normal, hard border (just as all mature countries do) and thenceforth ‘agree to disagree’ (just as all mature countries do) and ‘agree to agree’ on matters of mutual interest (just as all mature countries do) It seems that 99 per cent of countries manage to do this just fine.

Perhaps this is asking too much of the UK and the EU, or of the people of NI or the ROI… but creating a normal border between the two Irelands would demonstrate to the world that the Belfast Agreement was an important step towards permanent peace on the island of Eire and it would show the world that *forward momentum never stopped* on either side since the 1998 signing of that accord.

Profoundly, a one-page addendum could be added to the existing Belfast Agreement spelling out the frames of reference with regards to a normal land border between the UK and the EU. Problem solved!

Wouldn’t it be wonderful if Brexit turned out to be the impetus for a new and better relationship between Eire’s people?

Think of *those* photo-ops UK and EU negotiators! For the rest of the 21st-century you’d be the darlings of the world media along with Irish people on both sides of the border.


Option Two: The Present Course Leads the UK and the EU Towards Dispute

UK Prime Minister Theresa May has spent the past two-years hopscotching all over Europe trying to create a workable Brexit deal — and in this context ‘workable’ means a Brexit agreement that works well for the UK and its people, for the EU27 nations, and for the EU/EC leaders in Brussels. Very admirable, Theresa.

Apparently, 95 per cent of the Brexit terms and conditions are agreed according to UK PM Theresa May and the only sticking point is agreement on a border/no border between ROI and NI. If accurate, that’s good news!

The UK Prime Minister has said on many occasions that Northern Ireland is clearly a part of the United Kingdom (which is indisputable) and it must remain so following Brexit. As has has Arlene Foster, Leader of the Democratic Unionist Party in Northern Ireland.

So, if EU negotiators were trying to steal Northern Ireland by stealth, they ran into a brick wall when Theresa May and Arlene Foster joined forces. (And hey, there’s nothing wrong with the EU testing the resolve of the UK and NI to see if they are still firmly committed to keeping Northern Ireland in the United Kingdom)

But now that it’s been made clear to EU negotiators that it would be unseemly of them to continue to try to pull Northern Ireland away from the United Kingdom. And classy people that they are, it’s doubtful they’ll continue to try.

The present course that leads the UK and the EU towards dispute with both Irelands isn’t about any of the foregoing. It’s about Theresa May’s plan to keep all of the UK in the Customs Union — rather than what the EU wants — which is to keep only Northern Ireland in the Customs Union.

Which is why some observers question the EU’s motives, as retaining the EU Customs Union for Northern Ireland but not the rest of the UK is exactly the way a country would try to annex a territory or province by stealth.

In fact, there is legal precedent.

In the 1930’s, General Motors Corporation enjoyed very lucrative and exclusive U.S. government contracts to build military vehicles — and was allowed to compete against Ford and Chrysler in the public marketplace. Likewise, Chevrolet (a privately held company) competed against Ford and Chrysler.

By the 1950’s Chevrolet’s booming sales meant they had problems producing enough parts to build the huge volumes of cars they were selling and (incredibly) had pre-sold tens of thousands of them to buyers who were impatiently awaiting delivery of their new Chevrolet vehicles.

Subsequently, senior GM and Chevrolet executives met and came up with a plan for GM to build huge numbers of engines and transmissions for Chevrolet using Chevy designs, standards, and manufacturing practices.

As Chevrolet increased their sales exponentially, it leaned evermore on GM to provide parts for Chevy cars, but by the late 1950’s GM was building thousands of vehicles for Chevrolet in GM factories.

Things came to a head in 1959 when Chevrolet accused industrial giant GM of trying to take-over the much smaller Chevrolet by stealth.

In U.S. Supreme Court later that year, the court found that there was so much cross-over between the two firms — that no one, not even Chevrolet’s own lawyers! — could say for certain what belonged to GM and what still belonged to Chevrolet.

Therefore, the U.S. Supreme Court reluctantly ruled in GM’s favour and General Motors immediately accelerated the integration of Chevrolet into GM to prevent renewed legal action by Chevrolet’s lawyers. Shortly thereafter, Chevrolet ceased to be a separate entity and ‘became one’ with GM.

And here is the lesson for the United Kingdom:

If UK negotiators are weak and allow the EU to incrementally absorb Northern Ireland into the EU — after a certain point no international court could say exactly what belonged to the EU and what still belonged to the UK/Northern Ireland. Shortly thereafter, Northern Ireland would ‘become one’ with the European Union.

All of which means that the UK cannot afford to lose this battle. The very nature of the UK is threatened, while for the EU it’s merely an opportunity to gobble-up more territory and punish the UK for leaving.

For Theresa May, keeping the entire UK in the Customs Union seems the only way to abide by the Belfast Agreement and prevent Northern Ireland from being assimilated by the EU.

Recent commentary from her MP’s and from those in the UK media have forced Prime Minister May to say her plan is a temporary one — as leaving the European Union and its Customs Union was a major reason why 17.4 million voted to leave the EU.

Therefore, she and the EU have more negotiations ahead to arrive at a permanent solution to the Northern Ireland conundrum.

Will it get done in any reasonable timeframe? No one knows, because all the EU ever says to the British Prime Minister is; “No”, “No”, and, “No”.

So, wish her well no matter which side of Brexit you’re on, because getting a negotiated Brexit that works for both sides is in everyone’s interest.


Option Three: A So-Called ‘Hard Brexit’ is the ‘Emergency Out’ for the UK

If the EU won’t (1) accept a normal border between the Republic of Ireland and Northern Ireland, and (2) if the EU won’t accept the entire UK staying in the Customs Union for a specified time (until a Northern Ireland agreement can be negotiated) then (3) the EU will have triggered the ‘default option’ for the UK — which is to leave without any agreement.

See how it’s all about the decisions the EU makes?

Such a so-called ‘Hard Brexit’ is what Brexiteers have been clamouring for as it best represents their desire for a clean break from the European Union and would allow the UK to begin free trade negotiations immediately following the official Brexit date which would supercharge the UK economy if handled correctly.

Strangely, it also represents the easiest pathway for the EU! The only risk for the EU (at this point no one knows exactly how much risk the EU might sustain in such a scenario) is to the huge trade surplus in goods that the EU presently enjoys with the UK.

But a Hard Brexit would allow the EU to divert its attention to Italy — which for solely economic reasons — might need to leave the EU and the EuroZone for a specified number of years in order to save its stalled economy.

The Hard Brexit option seems to enjoy plenty of support in the UK (except for the Prime Minister and the Chancellor who seem to think it’s the worst available option) but it would be the quickest deal for the UK and it would also allow the EU to instantly pivot to Italy and give 100 per cent of its attention towards creating innovative workarounds for the Italian economy.

Which, if everyone is thinking rightly should make Brexiteers and EU negotiators natural allies regarding a Hard Brexit — especially when framed in the context of Italy — and the sooner Brexiteers and EU leaders realize this, the better.


Place Your Bets!

Option number one (as above) is the best option in my opinion:
The Theresa May 95 per cent Brexit + a normal border between ROI and NI.

Option number two (as above) ranks third place in my opinion:
The Theresa May 95 per cent Brexit + the entire UK stays in the Customs Union for a series of 6-month periods in order to provide the time to negotiate a comprehensive Brexit deal that solves the Northern Ireland conundrum. It’s also the most dangerous Brexit plan by far… re-read what happened to Chevrolet (as above)

Option number three (as above) ranks second-best in my opinion:
The Hard Brexit is the purist’s Brexit — and although it could incur the largest amount of disruption, such disruptions seem wildly overblown (UK agriculture contributes only .52% to UK GDP for example) and a Hard Brexit would gain the UK the most in the shortest amount of time. For certain, the Hard Brexit option must be Theresa May’s ’emergency out’ in case negotiations go bad. And likewise for the EU, the worse it gets in Italy, the more a quick and easy-to-arrange Hard Brexit should appeal to the EU.

Read: The Benefits of a Hard Brexit


Bonus Image

Northern Ireland, UK GDP, Brexit

GDP by sector in the UK 2007 — 2017. Please click on the image to take you directly to statista.com where you’ll find it’s an informative and interactive image — hover your cursor over the image. Graphic is courtesy of Statista.com

The Benefits of a Hard Brexit

by John Brian Shannon

“Name five benefits of a Hard Brexit” someone asked recently, which conveniently forms the basis of a useful discussion. So then, let’s have it:

  1. The UK instantly saves £39 billion pounds.
  2. The UK will no longer need to pay a (net) £9 billion per year to the EU.
  3. The Northern Ireland border will resolve itself. Which means, ‘It’s on them.’
  4. The UK will leave fiascos like the Salzburg meeting and Brussels debacles behind.
  5. The UK can sign as many free trade deals as it wants following the official Brexit date.

There are plenty more benefits but in case some feel that’s an overstatement, let’s post five more:

  1. Billions of dollars, pounds, yen and rupees would flow to the UK due to newly signed trade deals.
  2. Rifts in the UK Conservative Party would heal and the party could again function as one political entity.
  3. A major Conservative promise (Brexit) kept — leading to a majority government at the next General Election.
  4. Cheaper foods and goods for UK consumers (due to the huge economies of scale of North American agriculture and marketplace)
  5. The EU would rightly be put in its place for trying to steal Northern Ireland from the UK using bureaucratic stealth.

Want five more? Easy!

  1. UK universities full and expanding due to higher enrollment from new free trade partner countries.
  2. UK tourism operators experience record year-after-year numbers as new trading partners boost UK tourism.
  3. UK exporters export unprecedented amounts of goods around the world due to new trade opportunities post-Brexit.
  4. UK hospitals earn billions in foreign income as patients from new trade partner countries travel to the UK for treatment.
  5. UK increases engagement with Commonwealth of Nations countries and dedicates its entire foreign aid budget to Commonwealth countries only, which ‘keeps the money in the family’ so to speak.

The UK is Missing Out Because Theresa May Wants a Polite Brexit

But it appears that for all her efforts she is getting nowhere with the EU.

It’s a waste of time to try reasoning with people who don’t want a solution — and the EU doesn’t want a solution because it doesn’t want lose the UK (the EU’s cash-cow) which is the 2nd-largest contributor to the EU budget.

That’s it in a nutshell, folks! Nothing more, nothing less.

Therefore, the EU tries to bully the British people into giving up the idea of Brexit and it resorts to various plots to try to suspend Brexit like trying to rally weak-willed Britons to support a 2nd referendum (and the EU used that ploy successfully to browbeat the Irish into joining the union in a 2nd referendum attempt) and employs other games and media influencers to further their BRINO Brexit dreams.

And why wouldn’t they try that option? When you’re the spendthrift EU and you’re facing a (net) loss of £9 billion funding per year anything is worth a try.

Still, future relations must count for something. Let’s hope EU leaders eventually see the value of preserving a long-term relationship with the saviour of Europe (twice since 1914) and a major purchaser of EU goods in the present-day.

But if not, let us be on our way…

Let’s Talk Customs Union!

by John Brian Shannon

In the European Union, it’s all about the money.

For if it isn’t the EU holding-up the UK for £40 billion to leave the EU, it’s the European Union wanting billions for a Customs Union deal that will benefit continental Europe moreso than it will benefit the United Kingdom.

  • To be fair, there’s no word yet if there’s an up-front-payment component associated with the rumoured Customs Union deal.
  • Let’s not forget that the £40 billion number was arranged to pay an estimated £9.15 billion in British expat pension and other legitimate liabilities that the UK will rightly owe to the EU over the next 50-years.
  • Nobody in the UK disputes the £9.15 billion number (although everyone agrees it’s an approximate number as expat lifespans rise and other legitimate costs could increase in the future) but some wonder how £9.15 billion became £40 billion.

As much as UK citizens are tired of paying a (net) £8.6 billion annually to feed the EU’s budget, it looks like there will be a cost for a Customs Union deal with the EU. Still, few Britons would begrudge paying reasonable amounts (like Norway does) to be in a Customs Union (but not in a Political Union) with the EU.

Just make sure it costs less than £8.6 billion annually, Ms. Prime Minister…


For the record, let’s see how much the UK was projected to contribute to the EU budget

UK contribution to EU budget

This statistic presents the net contributions that the UK is predicted to make to the EU budget from 2016 to 2022. The peak of contributions is expected to be in 2019/20 at net 12.2 billion British pounds. Find more statistics at Statista.com

If you’re handy with a calculator, you’ll see that’s a net contribution of £71.6 billion over a span of 7-years and you’ll also note that the average net contribution will rise to £11.1 billion annually when averaged over the next 5-years. The £8.6 billion figure that we often hear came about from the average net contribution over the past 5-years.

Wow, that’s a lot of net contributing. Remember, the term “net” means you’re paying more in than you get back.


Time for the EU to Lower Their Spending or (better) Turn EU27 Nations into Net Contributors

Some blocs have ‘champagne taste and wildly varying contributions from member nations’ and the EU is surely that.

Once the UK leaves the union it will be primarily Germany propping-up the bloc as most of the EU27 are net ‘takers’ from the EU budget — and the few net ‘contributors’ are small countries that couldn’t float the EU budget no matter how hard they would try.

Sweden has a great economy for example, but with a population of 9-million people how could they afford to pay for the programme spending of 450 million EU citizens? To cover the EU budget you need two economic near-superpowers. Italy is still putting itself back together after the last recession and France’s economy is a break-even proposition — although the French live very good lives, and good for them. No wonder Germany enjoyed splitting the EU’s bills with the UK since 1993, but especially since 1998. Ultimately however, Germany got plenty of say in EU affairs while the UK was (basically) allowed to comment on EU affairs. But the UK knew that going in, so no complaining!

Let’s see how committed Germany remains to the EU project 5 or 10-years on when it is paying into the EU budget without Britain’s help. German taxpayers and German business might force the country’s politicians to pull out of the EU and amp-up the stature of the EuroZone into a full political and economic bloc. That might be a smart move for EuroZone countries, but it could result in disaster for some non-EuroZone nations.

In the meantime, let’s hope the EU manages to tame its spendthrift ways or that it finds ways to turn ‘taker’ member nations into ‘contributor’ member nations before the EU loses one of its best annual contributors.

That would also have the benefit of helping the keep the continent’s number one economy (Germany) flying high — which is uber-important because one of the things Germany’s robust economy is financing via their contributions to the EU budget is continued peace and prosperity in Europe. And judged by that standard over the past 70-years both Britain and Germany deserve a truckload of Nobel Peace Prizes. Jolly good, gute Freunde!

Until the Brexit implementation period ends in a little over 2-years, the UK must continue paying a net £11.5 billion annually (2019-2021) and it will still need to pay the expected £9.15 billion in expected future liabilities (which for some as yet unexplained reason was trotted-out as £40 billion) and is payable up-front, and it looks like it must also pay to gain or be in a Customs Union agreement with the EU.

As Theresa May has said many times, ‘Nothing is agreed until everything is agreed’ which may yet prove to be among the wisest words a British Prime Minister ever spoke.

Interesting times, indeed.