UK’s ‘grace period’ a novel way to tackle Brexit challenges – Financial Times

UK’s ‘grace period’ a novel way to tackle Brexit challenges – Financial Times

Financial Times

UK’s ‘grace period’ a novel way to tackle Brexit challenges
Financial Times
When the UK unveils its full offer on EU citizen rights on Monday, the concept of a “grace period” for those affected will be one of the most novel and significant of the whole Brexit package. The two years of “grace” aims to help the 3m EU nationals

Brexit: Tim Martin’s JD Wetherspoon announces £13m investment in EU – The Independent

Brexit: Tim Martin’s JD Wetherspoon announces £13m investment in EU – The Independent

JD Wetherspoon, headed by vocal Brexit-backing chairman Tim Martin, has announced its biggest ever single investment – into the European Union.

The pubs chain is ploughing €15m into developing a new pub and 98-bedroom hotel in Dublin city centre, which will create 200 new jobs in the Irish Republic.

Development work at the site, currently a row of derelict properties in Camden Street, will begin in February 2018, with the pub and hotel set to open early 2019.

Since the Brexit vote, Mr Martin has accused the EU of bullying the UK and used several company updates to rip into German Chancellor Angela Merkel, former French president Francois Hollande and European Commission president Jean-Claude Juncker.

He has also lashed out at former chancellor George Osborne, the IMF, the Bank of England, the CBI, Goldman Sachs, Morgan Stanley and PwC, who he claims were too negative about the impact of a Leave vote.

But announcing the investment on Monday, he said of the Dublin site: “We are looking forward to developing the site into a fantastic pub and hotel.

“It will be the biggest single investment undertaken by Wetherspoon and will result in our largest hotel alongside a superb pub.

“Our pubs in the Republic of Ireland are thriving and we are confident that the pub and hotel will be a great asset to Dublin and act as a catalyst for other businesses to invest in the city.”

Press Association

Treasury Executive Order Report Key on Cyber Improvements – Morning Consult

Treasury Executive Order Report Key on Cyber Improvements – Morning Consult

Treasury Executive Order Report Key on Cyber Improvements
Morning Consult
Regulations need to reflect the dynamic and evolving nature of the threats that exist to essential business and sector operations, and this month’s Treasury Department report on modernizing financial regulations is a critical step in the right

Japan seeks early free trade talks with UK amid Brexit fears – The Guardian

Japan seeks early free trade talks with UK amid Brexit fears – The Guardian

Japan wants to hold early free trade talks with Britain, in a sign of growing concern among the country’s businesses over post-Brexit access to the European market.

Japan’s prime minister, Shinzo Abe, is hoping to soften the blow that Britain’s expected withdrawal from the single market could inflict on Japanese companies by starting informal talks on free trade before Britain leaves the EU, the Nikkei business newspaper said, citing unnamed sources.

Under EU rules, official negotiations cannot begin until after Britain has left the trading bloc. But Abe’s enthusiasm for an early free trade agreement will encourage Theresa May and other pro-Brexit politicians who insist that leaving the EU will mean Britain is better placed to trade freely with major economies.

The Japanese leader is “concerned” about the consequences of Brexit because of the widely held perception that it will negatively affect Britain’s international standing “at a time when Japan desires a stronger bond between our two island and maritime democracies”, an official in Tokyo who is familiar with Abe’s thinking told the Guardian.

The official, who asked not to be named, added that Abe was aware that the final Brexit deal “is beyond the reach of the Japanese government”.

He said: “Whether the emerging circumstances will turn out to be in favour, or otherwise, of the City of London’s interests is what London and Brussels must work out. Needless to say, Tokyo is lobbying London so that Japanese financial interests are protected.”

Brexit poses serious risks for Japanese firms if, as expected, it leaves Britain outside the single market.

Japanese financial institutions are concerned about the loss of the “EU passport”, which enables banks based in London to operate freely across Europe’s financial markets while retaining most of their staff and operations in the capital.

More than 1,000 Japanese firms operate in Britain, employing some 140,000 people, and have invested more than £40bn in the country.

Evidence that Japanese firms are preparing for a hard Brexit surfaced recently when Daiwa Securities, which has its headquarters in London, announced that it would open a subsidiary in Frankfurt.

Nomura Securities, Japan’s biggest brokerage, is reportedly planning to make Frankfurt its post-Brexit base, but will retain a large number of staff at its current EU headquarters in the City. Other Japanese banks are expected to follow suit.

Analysts said that Abe was trying to ensure that Japan’s strong commercial ties would remain relatively unaffected, even by a hard Brexit. Tokyo is also reportedly months away from agreeing a free trade deal with the EU – where more than 600,000 jobs are linked to exports to Japan – after more than four years of negotiations.

“There are growing voices within Japanese business and industry calling on the government to ensure minimal disruption to bilateral economic ties,” said Osamu Tanaka, chief economist at the Dai-Ichi Life Research Institute in Tokyo.

Abe’s overture is based on the premise that May will set Britain on course for a hard Brexit, despite the blow to her authority from the general election result.

“I’m not expecting an exodus of Japanese banks to Germany, but they recognise that they need to have some sort of presence inside the EU after Britain leaves,” Tanaka said.

Manufacturers and other firms would adopt a “wait-and-see” approach, he added. “Even a hard Brexit might not dramatically affect trade between Britain and the EU, so companies like Nissan are not going to prepare to leave only to discover at a later date that there was no need.”

Martin Schulz, senior economist at the Fujitsu Research Institute in Tokyo, predicted that Japanese banks would have a significantly weaker presence in the City after Brexit.

“Japanese banks are particularly affected by Brexit because most major banks have their strategic global headquarters in London, which is not the case for US and EU banks,” Schulz said.

“Most western banks are planning to diversify into the European market, which brings more business to Frankfurt, Dublin and Paris. That strategy is more difficult for Japanese banks, but they will likely follow.”

Japan’s major carmakers have so far indicated they have faith in the British economy after Brexit.

Toyota announced a £240m investment in a car assembly plant in Derby, while Nissan committed to build its new Qashqai model at its plant in Sunderland, following a sweetheart deal between the business secretary, Greg Clark, and the firm’s chief executive, Carlos Ghosn.

Last August, the Japanese telecoms and internet firm SoftBank mounted a £24bn takeover of Britain’s most valuable technology company, ARM.

Other analysts were confident that Japanese banks would retain a significant presence in London.

“Of course the main drawback of Brexit for Japanese financial institutions is the issue of the single licence [EU passport], so it would be natural for them to shift to Frankfurt, Amsterdam or Dublin,” said Nomura’s chief economist for Japan, Takashi Miwa.

“But my sense is still that the UK has other advantages – like its legal system and financial knowhow – so Japanese financial institutions will retain major functions in London even after Brexit.”

Japan’s government and Keidanren, the country’s biggest business lobby, have made little secret of their concern over post-Brexit risks to the British and Japanese economies.

At last year’s G20 summit in Beijing, Tokyo issued a strongly worded letter to the EU and UK outlining fears over the future potential to export from Britain to third countries.

“The Japanese government and Keidanren are most concerned that the UK will lose its status as a free trade partner with the European continent, and that will in turn mean Japan losing certain advantages,” Miwa said.

This simple switch in technique could save tense negotiations like Brexit – Quartz

This simple switch in technique could save tense negotiations like Brexit – Quartz

The road to Britain’s exit from the EU has been rocky. UK prime minister Theresa May has adopted a hard stance, repeatedly claiming that “no deal is better than a bad deal,” and threatening to walk away if she doesn’t get what she wants (now that negotiations have officially started, she’s started making offers.) The EU, for its part, has fixed the timetable of the negotiations around a three-step plan (paywall) and dismissed any attempt by the UK to cherry-pick the conditions of the deal.

In the world of business, this style of negotiation is called “positional bargaining.” It centers on each side taking fixed positions during deal-making. But the result is almost always a trade-off that leaves people dissatisfied. A simple switch in strategy could change that dynamic, according to William Ury, co-founder of Harvard University’s Program on Negotiation, and Roger Fisher, the Program’s former director. They advise focusing instead on preparing for talks and conducting them in a way that finds an outcome that works for all. This strategy, called ‘principled bargaining,’ is outlined in their book Getting to Yes: Negotiating an Agreement Without Giving In, originally published in 1981, and revised in 2012.

This principle follows four key points:

“Separate the people from the problem”

Focusing too heavily on the individual leaves negotiations vulnerable to egos and emotions. Time would be better spent thinking about to work together towards a common goal, Ury and Fisher write.

The Brexit team is not short on personality. May made a ‘hard’ Brexit seem like the only option. After her snap election flop, this is no longer the case. Negotiators should move from seeing the negotiations as an outcome driven by May, or by one member of a much larger bloc, to one driven by diverse governments responding to various demands.

“Focus on interests, not positions”

Focusing on positions often overlooks what people really want. Instead, the negotiators should look at the underlying reasons driving those decisions, which can promote understanding and compromise.

Despite their disagreements, EU members are united by a need to represent the interests of the individuals in their countries. Cambridge University law lecturer Felix Steffek argues that this is where Brexit efforts should be concentrated —not among states. May is acting as an agent on behalf of the people while also contending with her own thoughts, and those of her party, on how Brexit should be tackled. The interests of all citizens within the EU and the UK should instead drive discussions.

“Invent options for mutual gain”

Fixed positions treat the world as black and white, and it’s anything but. Creative thinking outside the formal negotiation process produces better results.

Professor Lawrence Susskind, co-author of Negotiating on Behalf of Others, argues that the best way to deal with two opposing point of views is to brainstorm ideas. The opt-in, opt-out models of Norway and Switzerland, in which both countries remain non-EU members but still retain ties to the bloc through membership to the European Economic Area (Norway) or European Free Trade Association (both), should act as a springboard to spur ideas on the possibilities available. Susskind says the time is ripe for “exploration of a wide range of options and strategies” which could involve “multiple teams working jointly to generate good ideas on key issues, rather than a final agreement.”

“Insist on using objective criteria”

Moving away from what people are willing or unwilling to do and deferring to a fair standard that all agree on can help keep negotiations on track.

A mediator can help establish that standard during difficult discussions. The UK seems open to outside help: reaching out to the negotiation don himself, William Ury, for advice. It also just hired former New Zealand minister Crawford Falconer as its chief negotiations adviser. Falconer’s separation from European politics and expertise in global trade (he has also worked for the OECD) will hopefully allow him to offer fair and insightful judgments. Settling on what both sides consider crucial to future prosperity, like trade and the economy, will produce a result that is most pleasing to all.

A little flattery doesn’t hurt

Before and during negotiations, Ury and Fisher recommend appealing to your opposing side with gestures that acknowledge their humanity. Benjamin Franklin liked to flatter his adversaries by asking to borrow a certain book. That way, they felt like Franklin owed them. The Brexit team seem to be taking note. On Monday, Brexit talks in Brussels kicked off with the UK’s secretary of state for Brexit, David Davis, bringing a signed first edition copy (paywall) of the mountaineering classic Regards vers Annapurn. The EU’s chief negotiatior Michel Barnier, meanwhile, presented a walking stick from his home region of Savoie. Both men enjoy walking, you see.

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Finance Brief: Week in Review & What’s Ahead – Morning Consult

Finance Brief: Week in Review & What’s Ahead – Morning Consult

Finance Brief: Week in Review & What’s Ahead
Morning Consult
The stress-test results give financial deregulation advocates, including those in the Trump administration, a new point of argument in their push to roll back financial regulations, while advocates for regulations that arose from the 2008 financial