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An historic trade agreement was signed today governing trade between 15 Asian and Indo-Pacific countries that together represent 30% of global trade. It is now the largest trade bloc in the world, eclipsing both the USMCA (United States/Mexico/Canada) free trade agreement and the European Union trade bloc.
The Regional Comprehensive Economic Partnership (RCEP) is made up of 10 Southeast Asian countries, as well as South Korea, China, Japan, Australia and New Zealand. The deal was signed on Sunday on the sidelines of a meeting of the Association of Southeast Asian Nations (Asean), hosted by Vietnam. Said Vietnam’s Prime Minister Nguyen Xuan Phuc, “I am delighted to say that after eight years of hard work, as of today, we have officially brought RCEP negotiations to a conclusion for signing.” — BBC
“The 15 member countries account for about 30% of the world’s population and GDP, making it the largest trade bloc. It was signed at the Vietnam-hosted virtual ASEAN Summit on 15 November 2020, and is expected to take effect within two years, after it has been ratified by the member countries.” — Wikipedia
In addition to the ASEAN countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) five of their FTA partners — Australia, China, Japan, New Zealand, and South Korea — have signed on. India is likely to request ‘Observer’ status, with the new bloc extending a warm welcome to India to join them at a later date in this exciting new trade agreement.
The deal was signed on Sunday in a virtual online signing ceremony headquartered in Hanoi, Vietnam and has been a work-in-progress for 8-years.
15 countries, including Singapore, sign RCEP, the world’s largest trade pact — Straits Times
Perhaps Serving Notice to UK Negotiators to Get Brexit Done…
Had Brexit already taken place, the UK might’ve been invited to join such a trade bloc, or, at the very least, gain ‘Observer’ status in what is now the largest (by GDP and by population) trading bloc in the world, encompassing 30% of global GDP and a third of global population.
Should India join, it’s likely that Bangladesh would also join, rising both percentages cited above substantially higher.
What country wouldn’t want to be part of a rapidly developing group of countries that might soon represent 40% of global GDP and 50% of the world’s population?
Endlessly bickering about Brexit just won’t cut it in the 21st-century. Nowadays, things happen fast — and you either act promptly or you lose place in the international order. And that’s as it should be…
In the Meantime, There’s Free Trade Agreements that Should’ve been Signed with The Commonwealth and with America Long Ago!
So, let’s get on with it, before more industrious nations leave the UK sitting on the sidelines… again! (NAFTA first, CPTPP second, USMCA third, and RCEP fourth!)
UK Prime Minister Boris Johnson has done a great job so far, but if other countries can sign historic trade deals in the midst of a pandemic, then the UK should be able to do the same. And we all know why that hasn’t happened…
It’s time to get the scissors out Prime Minister and release the UK from the Gordian Knot that the EU has tied around the United Kingdom.
Prime Minister Boris Johnson’s first speech since Brexit occurred on January 31, 2020 where he calls for free and fair trade between the UK and other countries, and indicates that the UK won’t be bound by EU trade rules that penalize the UK or work to penalize Britain’s other trading partners.
He also speaks well of the Canada – EU (CETA) free trade agreement and proposes to use it as a model for the UK and the EU to begin trade talks.
Finally, the Prime Minister suggests that trade with America and the Commonwealth of Nations countries must be ramped-up over the coming months and years.
All in all, an inspiring and well-balanced speech about the UK government’s position on trade with the world.
Transcript courtesy of: GOV.UK
‘What Could be Better than Brexit?’ You Ask
Once Brexit is completed, the UK will be perfectly positioned to sign free trade deals with every country in the world. Indeed, some countries are eagerly anticipating signing free trade agreements with the United Kingdom post-Brexit.
Here in Canada, free trade with Britain is viewed as nothing more than the natural and obvious progression in our centuries-old relationship, and Australia, New Zealand, Singapore and India see free trade with the UK as a true Win-Win situation where all sides benefit from membership in that free trading relationship.
But in the UK for some inexplicable reason, free trade with Commonwealth nations is seen as a long-shot, something Britons would like to have but feel is almost impossible, and some seem to think the UK is ‘unworthy’ of such treatment by other Commonwealth countries and their 2.3 billion citizens.
‘The British really need to get out more, and see the world for what it is instead of seeing it through the prism of an imperial guilt trip’ seems to be the prevailing wisdom in the former colonies.
Get out there, UK! And, welcome to the 21st-century. We need to trade with you.
The Post-Brexit Domestic Agenda
Once freedom is established across the land, the UK government can rightly turn its attention to how citizens are faring. Spending on the NHS, education, housing, the manufacturing sector, agriculture and transportation networks can be improved from the present (underfunded) model.
Presently, UK taxpayers dutifully send their money off to the government, which then sends a substantial portion of it on to Brussels. And every month, UK taxpayers send £1 billion more than they receive back from the EU. Which, as you’ve guessed, means that UK taxpayers send £12 billion more annually to the EU than they receive in return.
With an extra £12 billion a year to spend on the NHS post-Brexit — that’s £230 million a week — the NHS would eventually recover from being cash-starved since 2010 or thereabout.
But if the government elected to spend that £12 billion per year on education — British students would be in for a world-class education where no student gets left behind and every one of them would receive a tuition-free PhD-level education or tuition-free trade-certificate education — just as many European and some South American countries already offer. What a great leg-up for the country! Every British student turns into a highly-educated intellectual or tradesperson with the relevant documentation to prove their dedication to their profession or trade.
Or, if the government decided to solve the UK housing crisis by building tens-of-thousands of low-income homes for Britons. Which (housing crisis) is in the process of being solved anyway, as thousands of EU citizens return to the continent prior to the final Brexit date — thereby freeing-up housing in the UK market — whether rental or purchased.
And similar applies to other sectors of the UK economy. Once Brexit finally happens, the UK will have an extra £12 billion to spend annually. How the UK government chooses to spend it, is down to the priorities of the post-election government.
One thing is for certain, leaving the EU will allow an extra £12 billion to be spent every year in the UK economy. Which means that ONE major problem can be solved per year (NHS, education, housing, manufacturing, agriculture, transportation networks, high taxation) but not ALL major problems at once!
The Piecemeal Approach is the Wrong Approach!
To my mind, dropping a few billion here and there throughout the economy in an attempt to please everyone… definitely ISN’T the way to proceed.
With an extra £12 billion, the next government should decide which problem to solve in year-1 (£12 billion) then, in year-2, another major problem can be nailed-down to a satisfying conclusion (the second £12 billion spend), and in the 3rd-year something else can be solved once and for all time with the third £12 billion spend.
Typically, democratic governments seek to please the largest number of voters by dispersing such economic windfalls (a £12 billion annual windfall in this case) relatively evenly throughout the economy. But in the UK, each major problem in the country could be permanently solved via a single-year £12 billion spend in each problem area.
And that should galvanize British minds into prioritizing the next 5-year spending round.
How Would YOU Spend It?
Maybe you’re an overworked healthcare worker. We know how you’d spend the money. And we don’t blame you. Thank you again! for all the great work you do saving lives and dramatically improving the lives of the sick and elderly with your fulsome commitment. We salute you!
Or, maybe you’re a social worker who sees lives being wasted because there aren’t enough entry-level jobs, or safe housing, or supports in place to help the young, the elderly, the infirm, or the marginalized, to help them progress out of their poverty-based existence. In such cases, even relatively small amounts of money can make a huge difference in their lives — lifting them out of poverty and into work in a matter of weeks.
Every country needs more taxpayers and lifting people from UC to employment results in a double benefit for the economy — instead of the government paying such people to basically stay alive until they’re needed in the workforce, those people will then begin to pay into the tax revenue stream. Entire towns and boroughs could be revolutionized by the addition of a relatively inexpensive 1-year spending programme to the mix.
Brexit Can Work for Farmers!
Maybe you’re a farmer/rancher worrying about your EU subsidies going away. (And they will) Of course it would be great if the UK government decided to pay you the same subsidies that you enjoyed when the UK was a member of the EU.
But even better solutions await.
Why grow a crop that doesn’t earn any money? Why continue to stay in the dairy business competing with the heavily-subsidized EU, U.S., and Canadian dairy industries? Maybe it’s time to switch gears and raise animals or grow crops that don’t need subsidies.
Or, maybe it’s time for you to rent your land to the utility companies for the installation of wind turbines for £4000. per year/per turbine? In that way, you’re earning income instead of waiting for government subsidies to suddenly fall, as we’ve seen over the decades.
In the case of wind turbine installations, most of your land remains available to you, it’s just that you lose the footprint of the turbine tower and the utility company needs a gravel access laneway to each turbine which translates to an average loss of 1-acre of land per turbine for the farmer.
Some land is too rocky to grow crops/graze cattle anyway, so that isn’t much of a loss in some cases. Certainly, receiving £4000. per year/per acre from a utility company in land lease fees beats all the work that goes into growing crops, only to gain £800. to £1200. per acre annually! And, as for grazing cattle or sheep on marginal land, an acre of that land might only be worth £60. to £100. annually to your farm. Or less.
Yes, you can tell that I love farmers and ranchers because I’ve devoted all this space to them. But it illustrates how Britons and the government need to think differently in the post-Brexit world.
Instead of competing against highly-subsidized countries (and bigger countries will always win as they have more taxpayers to pay those high subsidies) it’s time to change gears and switch towards a more sustainable and more profitable economic model.
Grow those high-demand/no-subsidy crops! Raise those animals that don’t require subsidies! Rent your less-productive farmland to utility companies for more profitable wind turbine or solar panel installations — where your profits aren’t decided in a closed-door backroom in the EU, America, or Canada.
Britons: Compete on Your Strengths, Not on Your Weaknesses!
In short, dear Britons, compete on your strengths and cease competing on your weaknesses against much larger and more highly-subsidized blocs. The degree to which you can succeed in that is the degree to which you, your family, and the UK itself, will prosper.
And in case I didn’t make it clear enough, above;
In a post-Brexit UK economy, innovation ruled by merit-based thinking is the best way for individual Britons, British families, and the UK to succeed.