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This Week in Brexit: The Conservatives weak negotiating hand

by John Brian Shannon

One of the reasons I’m a Theresa May fan is that she took a highly principled position by calling an election prior to Brexit, presumably to further legitimize her premiership with voters and thereby gain a stronger negotiating hand heading into Brexit negotiations.

Before becoming Prime Minister, Theresa May had been an MP for 20 years and served as Home Secretary for 6 years, and only then was she named PM by the Conservative Party when former PM David Cameron stepped down. Which is to say, Theresa May is as legitimate as any UK Prime Minister ever appointed (but not elected to) the PM’s chair.

Nevertheless, at the most important political moment since the end of WWII, Theresa May decided to further legitimize her premiership by calling a snap election with the intent of causing her party to rally ’round her in time for the upcoming Brexit negotiations, thereby empowering Britain in its dealings with the European Union.

By any definition it was an admirable plan.


It Worked! (Sorta)

Except for the Conservative MP’s that didn’t campaign hard for her and were only interested in maintaining their position as a Member of Parliament, and excepting the millions of former UKIP voters — only some of them supported the Conservatives on election day.

All in all, a surprising result.

Perhaps three terrorist incidents in the UK within 90 days of the election changed the mood of the electorate, or maybe when confronted with an actual Brexit complete with veiled threats emanating from some EU capitals it’s possible some British voters felt cowed into lowering their Brexit expectations.

If so, that would be a shameful indictment on the British people, the people who succeeded admirably even after suffering horribly in two world wars and are a people who carry-on through all manner of terror attacks, social upheavals, recessions, and Britain’s famously inclement weather.


Now with a ‘weaker hand’ Theresa May must pull-off a reasonable Brexit

How to do more, with less? That’s the job facing Prime Minister Theresa May over the next five years.

It’s an unenviable position for a veteran British MP with 6 years as Home Secretary to her credit and 1 year as Prime Minister of the United Kingdom, who deserved better from her party and from voters.

At least 42.4% of UK voters agree with Theresa May (see BBC election chart here) which was a gain of 5.5% for the Conservatives since the last election when David Cameron became Prime Minister. The business community likes the progress on the economy, and she is highly regarded by foreign leaders. But still, that got her (only) 318 seats, which isn’t enough for a majority government.

She deserves better than she’s gotten.


Methinks there are strings being pulled in places that we know not…

But just for the record, let’s look at a July 17 poll result from an internationally recognized polling firm.

One year on from the Brexit vote and business sentiment remains high

One year on from the Brexit vote and business sentiment remains high (Says it all, doesn’t it?) Click image to enlarge.


Another chart for the doubters

One thing that Britons have every right to be proud of is the National Healthcare Service (NHS) and in recent years it has begun to score well in the prestigious Commonwealth Fund rankings. In fact, the 2017 ranking puts the NHS in 1st place over 10 other wealthy nation healthcare systems. But you’d never think it because (according to some) the NHS is falling apart at the seams.

Just as former PM David Cameron was rightfully proud of the 2013 Commonwealth Fund ranking (1st place) so Prime Minister Theresa May should feel proud of the 2017 NHS ranking (1st place) even as some of the countries named in the study improved on their 2013 rankings.

UK and 10 other countries, Health Care System Performance Rankings

UK and 10 other countries, Health Care System Performance Rankings, courtesy of the Commonwealth Fund (2017) Click image to enlarge.

For comparison purposes, I’ve included the 2013 Commonwealth Fund ranking graphic below.

UK tag, The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries, courtesy of the Commonwealth Fund (2013)

The Commonwealth Fund 2013 International Health Policy Survey in Eleven Countries, courtesy of the Commonwealth Fund (2013) Click image to enlarge.


One more chart that uses actual facts to combat negative perceptions — shows how well the UK is faring

This chart shows GDP in Purchasing Power Parity (PPP) which illustrates that purchasing power of both UK citizens and expats is increasing — even though (according to some) the sky is falling every day!

UK GDP per capita Purchasing Power Parity PPP

UK GDP per capita Purchasing Power Parity PPP. Source: tradingeconomics.com Click image to enlarge.

With all of that going for the UK in 2017 (and more positives that I haven’t included because I don’t want to drown you in charts) you’d think that Prime Minister Theresa May would get plenty of respect from her party, from certain media outlets and from voters.

But apparently in the United Kingdom, almost-perfect scores aren’t good enough to get the Prime Minister the majority she needed to allow the country to cruise through Brexit. And that’s a shame.

This Week in Brexit: Trump Promises a Trade Deal

by John Brian Shannon

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?

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

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: Expat rights

by John Brian Shannon

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. 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 all of this 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 should be the goal for negotiators.