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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.
One of the great things about Brexit will be the opportunity for the UK to sign trade deals with any country in the world and some of those trade deals may be quite innovative in nature. Novel trade opportunities shouldn’t be discounted simply because no one has ever done them, but such deals should be judged on their own merits.
In the age of the 3D-printing technology for example, there’s no reason why a company in America can’t electronically transmit code to a 3D-printer in the UK, allowing the UK company to manufacture the item there. Of course, this means paying a license fee to the American company, but think of the convenience for that UK manufacturer! Not to mention instant access to the item for the UK customer, and it means jobs at both ends of the equation. If you’re concerned about the CO2 emissions involved in shipping something from America to the UK, you’ll appreciate that transmitting a few hundred lines of computer code creates only a fractional amount of CO2.
Even better, is the case for cars and trucks to be built in the UK under license from American automakers.
For example, Ford Motor Company may choose to sell millions of automobile VIN numbers (basically, the serial number of each car or truck) and the complete instruction set for building and assembling each car or truck, to a UK company that specializes in building Ford vehicles. The UK company would pay a per-vehicle license fee to Ford Motor Company U.S.A. and agree to maintain the same high manufacturing standards of the American automaker and it would be required by Ford U.S.A. to adhere to the same warranty terms and conditions.
But still! Think of the CO2 savings, think of the jobs created in the UK, think about the UK building all Ford cars and trucks in the UK for the domestic market and exporting millions of those built-under-license vehicles to Commonwealth countries that have right-hand drive cars. That market, the right-hand drive car and truck market in the Commonwealth of Nations, would become the UK’s ‘beat’ and Ford would grant exclusive rights to the UK company to sell millions of Ford cars and trucks throughout the entire Commonwealth. (Note: Canada drives left-hand drive cars like the U.S., so Canadian cars would continue to be produced in the NAFTA countries)
So far, I’ve only talked about Ford vehicles. But what if it was all vehicles?
What if all American, Japanese, Korean and EU car manufacturers decided to make the same amount of profit per car as they do now, but only needed to sell a VIN number and the ‘vehicle blueprint’/computer code for each car to a UK manufacturer in order to do so? Ergo, all right-hand drive cars destined for UK and Commonwealth customers would be built in the UK and exported, where necessary, from Bristol.
What if it was more than cars and trucks?
What if Airbus, Boeing and Lockheed Martin sold per unit license fees to UK manufacturers, along with Bombardier and Embraer? What if Caterpillar heavy equipment and Toshiba and Hyundai Heavy Industries sold per unit license fees to UK companies? Yes, those companies would earn the same profit per unit as they do now — by selling only the license fee and VIN number and the technical aspects to the UK company — which, in turn, would manufacture those units within the UK and offer them for sale in the UK and to Commonwealth of Nations countries exclusively.
I’m still not done! What if everything sold in the UK was manufactured in the UK? How many jobs would that create?
What if you wanted a right-hand drive Mercedes CLA 250 4MATIC coupe? And what if you could simply order it from Mercedes online, and the Mercedes Benz approved manufacturer would fly you from anywhere in the UK to the factory in Bristol to pick up your new car, right off the assembly line. Some people might like to arrive a day early to watch their own car being built to their own option specifications. Then, you could take a nice leisurely drive home in your brand new car and not have to pay £2000 in shipping costs to get the car delivered from Germany, as is the case now.
What if you wanted an ACER computer, or a Lazy-Boy brand reclining chair? What if you wanted a Texas A&M hoodie for walks with your dog in cool weather? Get one for the dog too, is my advice, you’ll look great together! Or, what if you wanted the latest Italian cookware? Now, what if you could simply buy what you wanted, but it was manufactured in the UK under license from the original manufacturer, and in so doing, you received it sooner, with lower shipping costs, and far lower CO2 emissions — compared to the item being manufactured overseas and then shipped to the UK?
And what about companies in the UK making those items (and many more!) for Commonwealth of Nations consumers — which will number 2.5 billion by 2022?
Great for exports and great for those countries! Why? Well, assuming the UK government doesn’t blow this once-in-a-lifetime opportunity, there won’t be enough labourers in the UK to build all those cars, trucks, forklifts, computers, furniture, t-shirts, medical instruments, dishwashers, etc., etc., etc., and the UK will need to import Commonwealth workers to keep up with demand. Which itself, will help Commonwealth nations improve their per capita, disposable income — meaning, they’ll have more opportunity to afford such items.
Yes, via the UK hiring Commonwealth workers for UK assembly plants, people from Commonwealth nations will then have more money to spend on UK-manufactured goods, goods that might well be assembled by their very own children who work in the UK during their gap year between high school and university. Even mature workers from Commonwealth nations should be able to gain a UK work visa for one-year, to earn some British sterling, thereby advancing their own family finances, and find themselves better able to purchase a UK manufactured car or other item once they return home.
Just because it hasn’t been done before, doesn’t mean it can’t be done.
Just look at what JFK did… he promised America would put a man on the Moon by the end of the decade, and he succeeded in that. Nobody else was doing it, but that didn’t mean it couldn’t be done.
All the UK needs now is for a JFK-like leader (either in UK politics or a captain of industry) to do what nobody else is doing and make this thing fly. Many will say it can’t be done, but I don’t believe it for a second. Only mediocre people say things can’t be done.
So, stop talking about it, and get it done!
Because if you think you can dither and delay for 3.5 years like you did with Brexit, don’t bother trying, as you’ll soon find that every country in the world has beaten you to the punch and it will no longer be worth doing.
It Couldn’t Be Done
by Edgar Albert Guest
Somebody said that it couldn’t be done
But he with a chuckle replied
That “maybe it couldn’t,” but he would be one
Who wouldn’t say so till he’d tried.
So he buckled right in with the trace of a grin
On his face. If he worried he hid it.
He started to sing as he tackled the thing
That couldn’t be done, and he did it!
Somebody scoffed: “Oh, you’ll never do that;
At least no one ever has done it;”
But he took off his coat and he took off his hat
And the first thing we knew he’d begun it.
With a lift of his chin and a bit of a grin,
Without any doubting or quiddit,
He started to sing as he tackled the thing
That couldn’t be done, and he did it.
There are thousands to tell you it cannot be done,
There are thousands to prophesy failure,
There are thousands to point out to you one by one,
The dangers that wait to assail you.
But just buckle in with a bit of a grin,
Just take off your coat and get to it;
Just start in to sing as you tackle the thing
That “cannot be done,” and you’ll do it!
And this is the attitude sorely lacking in recent generations. In my generation (yes, I know what that sounds like) our generation arrived at the best plan and got right to it.
We left our egos at the door, we left our personal lives at home, and we got the job done on-time and on-budget — or we were judged by our peers to be ‘not worth spit’.
And while that modality may seem harsh to some, it’s the best way to build a rocketing middle class economy, it’s the best way to create a thriving family lifestyle, and it’s the best way to stay ahead of our competitors who aren’t in the business of working for our best interests.
‘All for one and one for all, must henceforth be Britain’s clarion call’ if post-Brexit Britain is to succeed!
‘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.