LEADING THE WAY OUT OF THE EU

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Tuesday 20 August 2019 

Australia piles into Brexit Britain’s trade bonanza as prominent members of the Trump administration, including the president himself, line up to pledge their support for a big deal. Unemployment is down, exports are up (not in the Eurozone though). No Deal Brexit isn’t a threat to the City, Dublin bureaucrats admit as they try to steal business from London. The CEO of retailer Next is similarly optimistic. Meanwhile, Boris ramps of Britain’s economic regeneration with plans for ten free ports.

ONS – Labour market overview: August 2019

UK employment has hit yet another high, standing at 76.1%. It is now at the joint highest level since records began in 1971. Unemployment is just 3.9%, a 0.1% decrease since this time last year. The trend of rising salaries also continues with estimated annual growth in average weekly earnings reaching 3.9%, a real terms increase of 1.9%. The Times points out that that EU citizens continue to account for a sizeable percentage of Britain’s growing workforce. The number of EU workers rose by 88,000 in the past year, 2.38m out of a total of 3.43m, even though the EU (minus the UK) only accounts for less than 6% of the global population.

Reuters – US overtakes Germany as UK’s biggest source of imports

The United States has long been Britain’s largest export market. We’re now returning the favour with Germany slipping into second place as the UK’s biggest supplier of goods and services. In the year to April, US imports rose an impressive 14%, reaching £78.27bn worth of trade. “Now that the US is our largest market for both exports and imports, there has never been a better time for us to make the most of this golden opportunity and deliver a free trade agreement with the US,” said international trade secretary, Liz Truss in a statement.

Sunday Times – Senators pledge Brexit Support  

…No better time indeed as 45 US senators back Boris Johnson’s new administration and his Brexit strategy in a Sunday Times letter. “We will support whatever course Britain takes. First, if Britain leaves the EU with no deal, we will work with our administration, your government and our friends in the EU to minimise disruptions in critical matters such as international air travel, financial transactions, and the shipment of medicine, food and other vital supplies.”

The goodwill gesture was made shortly after President Trump vowed to strike a trade deal with the UK. “We can do three to four to five times what we’re doing now,” said Trump. He has since reinforced his pledge, declaring that he and Boris “are very much aligned”, a “fantastic and big” trade agreement is on its way. “We should do much more business than we’re doing.” Trump’s assurances came either side of his national security adviser’s visit to the UK. No Deal Brexit, “if that’s the decision of the British government, we will support it enthusiastically, and that’s what I’m trying to convey. We’re with you, we’re with you,” John Bolton told reporters.

Sydney Morning Herald – Australia-UK trade deal ‘could happen within weeks of Brexit’

Also eager to get a big deal underway quickly is Australia. “I welcome the incredible enthusiasm of Liz Truss to secure an ambitious Australia-UK deal as soon as possible,” said Simon Birmingham, after speaking with his opposite number in London. Birmingham also said he hoped to “conclude a comprehensive deal within months if not weeks of Brexit, and Australia stands ready to move as fast as the UK can to open our markets up to one another.”

Politico – Australia’s UK envoy sees hope of trade deal by end of 2020

…Birmingham was joined by Australia’s High Commissioner in London who envisages a deal “before the end of 2020”. The deal struck with the US is cause for confidence, “The reason I take that date is that it only took 15 months for Australia to complete our very, very ambitious FTA [free trade agreement] that is with the US some 15 years ago,” said George Brandis (pictured above). “The political will is there”.

ITV – New trade partnership with Mexico a win-win relationship, says Dominic Raab

Meanwhile, the foreign secretary has put pen to paper on a renewed trade arrangement with Mexico. “The UK is excited to be working with our Mexican friends to develop a win-win relationship. There are huge opportunities to boost two-way trade, create jobs, tackle poverty and inequality, and address key Mexican priorities such as strengthening transparency and reducing corruption,” said Dominic Raab on a whistle-stop tour of Central and North America, a region accounting for just shy of a third of global output, twice that of the EU, even with the UK included

Raab also visited Washington DC, where he met with his US counterpart, Mike Pompeo. “We support the United Kingdom’s sovereign choice, however Brexit ultimately shakes up, and we will be on the doorstep hand in hand ready to sign a new free trade agreement at the earliest possible time,” said Pompeo at a joint press conference.

Those warm words were echoed by Raab on his ensuing visit to Canada. “Words such as friend and ally somehow fall short in describing the relationship between Britain and Canada. The ties that bind are so strong, the affinity between us so deep, that I prefer to think of our countries as different branches of the same family,” wrote Raab in an op-ed published in the Globe and Mail.

Telegraph – Ten Singapore-style tax-free ports to be created after Brexit

At home, the government is looking to simulate trade by creating ten “free ports” around the country. Businesses, particularly those specializing in complex goods assembled from numerous components thrive in these low tax zones as they no longer incur import duties on finished and semi-finished goods being brough back and forth across borders. The absence of tariffs also cuts down on paperwork, lowering margins and boosting competitiveness.  “We should definitely be doing free ports and tax free zones. They have delivered around the world, there are about 130 countries who have them. We don’t because of our membership of the EU,” said Boris Johnson in July. After forming his new government, Boris dispatched Truss to the North East to unveil the big new project.

Guido – EU Exports down, UK exports up strongly

The outlook is far less optimistic on the continent however. Trade within the Eurozone has dropped 6.6% in the past year – the sole economic argument for a single currency and the massive sacrifices it entails is to boost trade, oh dear. Eurozone exports to the rest of the world are also down, 4.7%. Meanwhile UK trade is up, exports of both goods and services rose 4.5% in the year to June.

Belfast Telegraph – London ‘to keep status of global finance titan even in event of no-deal Brexit’

Dublin has been trying to nick business from the City of London as it desperately tries balance out concerns No Deal Brexit will hit its economy, already enfeebled by the Euro crisis, the hardest. However, a report by Ireland’s Central Bank has recognised London will remain the financial top dog as it leaves the EU. “While a less open, productive and rich UK might influence the future path of the City, according to our analysis the impact of fundamental factors could be very small,” the report states. As so many studies of its kind have highlighted, dispersing large amounts of business from the City to relatively minute centres across Europe will reduce the Continent’s financial stability, a major reason why the majority of players in the sector want London to hold onto its pre-eminent position and accordingly, have decided not to relocate.

Express – Boss of retail giant says Britain is ready for no deal

Lord Wolfson, CEO of clothing retailer Next, has dismissed No Deal Brexit fears, anticipating only “mild disruption”, a far cry from the hysteria constantly blaring over the airwaves. “I think the encouraging thing is that [under Boris’s new government] we are rapidly moving from the disorder and chaos camp to the well-prepared camp. The fact that HM Revenue and Customs has introduced these transition methods will make an enormous difference.” Lord Wolfson’s call for calm comes amid reports French customs have invested heavily in IT systems in order to reduce the need to manually check lorries, thereby easing the flow of trade in the event of No Deal Brexit.


Comment

Own Paterson – From gene editing to robotics, Brexit will free us to build the farms of the future

Brexiteer and former environment minister, Own Paterson provides numerous, not to mention fascinating examples of how the rest of the world is accelerating the use of technology in farming, pulling ahead of the traditional and unproductive techniques indulged by the EU’s disastrous Common Agricultural Policy. “France, for example, is missing out on over 4.5 tonnes per hectare in its maize yield compared to the US. That crop could be worth hundreds of millions of euros to the French economy, or free up 500,000 hectares for wildlife, recreation, or forestry.”

Patrick Minford – The UK economy has not been damaged by Brexit, but by our failure to deliver it

Esteemed economist Patrick Minford places recent underwhelming economic data in its proper context as Remainers perversely rejoice at negative growth in Q2 of 2019, “To get a reading on the underlying growth rate, it is best to average the two quarters and compare them with a year ago; this gives an annual growth of 1.3%. This tells us the economy has slowed down recently. But so has the world economy and this has had a negative impact on the eurozone too, as it has on China and many others.”

“Year-on-year growth in the first quarter was 0.7% for Germany, -0.1% for Italy, 1.2% for France and the same for the eurozone. The story is simple enough: the world has slowed and so have we”

“Uncertainty” has “undoubtedly… held back some investment plans; but these will come back into action once Brexit is done,” he adds. All the more reason to get on with it and get out.