Brexit and Trump push world trade deals up EU priority list – Financial Times

Brexit and Trump push world trade deals up EU priority list – Financial Times

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For the UK government, a strong selling point of Brexit is that it will open free trade opportunities for Britain across the globe. Yet identical opportunities exist for the EU’s 27 remaining countries. In fact, Brexit and the Trump administration’s “America first” economic policies are pushing new trade deals up the EU’s list of priorities. A rapidly negotiated EU-UK deal will not necessarily be top of this list.

Even before the UK’s June 2016 Brexit referendum, EU trade deals were on the horizon with various partners in Asia and the Americas. By threatening to loosen the EU’s commercial and geopolitical moorings, the Trump administration’s hostility to multilateral trade deals and its attack on German economic policies make these accords more important.

Without officially killing it, the Trump administration has in effect frozen talks on a US-EU trade and investment deal that started in July 2013 during President Barack Obama’s second term. For sure, some elements of the proposed agreement were under fire in Europe, anyway.

The negotiations, which started in March 2013, were held up for a long time by Tokyo’s reluctance to open its economy to European agricultural goods and EU opposition to lower barriers on Japanese car imports. But Brexit and Mr Trump’s actions have concentrated minds.

The Europeans have concerns over data privacy and procurement practices in Japan’s railway market. The Japanese have concerns over how a mechanism for settling trade disputes might work. But the political will to do a deal appears strong.

Progress on an EU-India trade deal is also possible. Talks began in 2007 and rarely seemed a priority for either side. But some obstacles, such as Indian tariffs on Scotch whisky and British resistance to a liberal visa regime for Indian workers, were primarily about the UK. Brexit may smooth the path to an EU-Indian accord.

There is movement on other fronts. Brussels has completed, or almost completed, trade talks with Canada, Singapore and Vietnam. Ratification is by no means straightforward, especially when regional Belgian assemblies are involved. But Europe’s strategic interest in such agreements means that it presses on. The EU is also negotiating an updated trade accord with Mexico and will soon open talks with the four Mercosur nations of Argentina, Brazil, Paraguay and Uruguay.

Seen from London, a post-Brexit trade deal with the EU is highly desirable. It will be needed to clarify the commercial and legal frameworks in which UK businesses and foreign investors will operate after Brexit. After all, almost half the UK’s trade is with EU countries.

From an EU perspective, however, a trade deal with the UK is only one piece of a bigger picture. According to economist Jonathan Portes, slightly less than 16 per cent of the EU-27’s trade is with the UK.

This does not make a trade deal with Britain undesirable for the EU-27. Far from it. But when it comes to global trade, the EU operates on a much bigger scale than the UK. The EU’s stepped-up engagement with Japan and other countries demonstrates Europe’s vital interest in upholding an open, rules-based international trading order. 

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Further reading

Brexit’s frontline Four chief executives reveal the real-life impact from decisions made in Westminster in a two-year project. (Bloomberg) 

Juncker’s plan European Commission President Jean-Claude Juncker’s plans for EU integration after Brexit display little willingness to undertake wholesale reform, according to Pieter Cleppe (Open Europe) 

Major warning John Major, the former Conservative prime minister, has urged Theresa May to face down Tory Eurosceptics during the Brexit negotiations, warning that they are fickle friends who want a damaging “total divorce” from the EU. Boris Johnson is expected to reply in a speech to the British Chambers of Commerce. (FT, Guardian)

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Hard numbers

From the FT’s Chris Giles:

Industries servicing Britain’s shopping habits have accounted for a quarter of UK growth since the Brexit referendum, more than double their normal importance, highlighting the economy’s vulnerability to a consumer slowdown.

Official figures show the unusually unbalanced nature of growth since the vote on June 23 last year: industries accounting for 45 per cent of output were responsible for all of the total growth recorded, while a third of industries were contracting.

The figures come from the Office for National Statistics’ “low-level aggregates” of the economy every quarter, which were updated last week.

Even though the ONS’s measurements are stuck in the 1950s, with disproportionate detail on manufacturing in a service-dominated economy, they provide insight into the unexpectedly strong economic performance since the Brexit vote.

The figures underpin the headline statistics for gross domestic product but are rarely explored — though some caution is needed as Nick Vaughan, chief economic adviser at the ONS, told a conference last week that “parts of the service sector are not just ill-measured but completely mismeasured”.

Dyson shrugs off Brexit fears with massive UK expansion plan – The Guardian

Dyson shrugs off Brexit fears with massive UK expansion plan – The Guardian

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Dyson, the technology company, is to undergo a dramatic expansion in the UK by opening a new 517-acre campus as part of a £2.5bn investment that will support its development of new battery technologies and robotics.

The company, led by billionaire inventor Sir James Dyson, will increase its UK geographical footprint tenfold by developing the campus on a former Ministry of Defence airfield and intends to at least double its workforce of 3,500 over the next few years.

The new facility in Hullavington, Wiltshire is part of a £2.5bn investment by Dyson in new technologies and will focus on research and development. The size of the campus and the company’s work on batteries, robotics and artificial intelligence will increase speculation that Dyson is developing a driverless electric car.

Theresa May said said: “This investment is a vote of confidence in our modern industrial strategy and our determination to cement the UK’s position as a world leader in high-tech engineering.

“Dyson’s exporting strength and commitment to creating jobs in Britain is a real success story that demonstrates the opportunity that our plan to create a truly global Britain can present.”

The expansion plan is a boost for the government amid growing speculation about the future of other key industrial facilities. BMW is considering building its new electric Minis in Germany rather than its factory at Oxford. There are also concerns that jobs could be lost at Vauxhall’s factories in Ellesmere Port and Luton if PSA Group, the owner of Peugeot, completes a deal to buy parent company General Motors’ European business.

Dyson was one of the most prominent business leaders to publicly support Brexit before the referendum in June. His company has developed from a business specialising in bagless vacuum cleaners into a fast-growing multinational technology company selling bladeless fans, air purifiers, hand-dryers, hairdryers and robotic vacuum cleaners.

Dyson said he did not understand claims that the UK is suffering from economic uncertainty and that the prospect of the country leaving the EU had not dissuaded him from investing.

“We have got the opportunity to export globally – Europe is only 15% of global trade and declining. The world outside Europe is expanding faster than Europe, and that is the same for Dyson,” he said.

The tycoon said that Britain is a “great place to do business” due to the low rate of corporation tax, the skills of engineers and scientists, and the decline in the value of the pound against the dollar and euro. “These are far more important elements than any WTO [World Trade Organisation] tariffs.”

When asked what the new facility will be used for and whether it will help to build a driverless vehicle, Dyson said the company’s new facility will do “a lot on batteries and a lot of other top secret work”.

The new campus is close to Dyson’s headquarters in Malmesbury near Bath, and is on the site of a former Ministry of Defence airfield. Dyson will begin work on the first phase of the development next week. It aims to restore six second world war hangers on the site and have them ready for occupation by the end of the year.

The company declined to clarify how much it was spending on developing the new campus, saying it was part of £2.5bn committed to new technologies. This £2.5bn includes £1bn on battery technology, £250m on expanding Dyson’s existing headquarters, and the rest on research and development.

Dyson said: “After 25 years of UK growth, and continuing expansion globally, we are fast outgrowing our Malmesbury campus.

“The 517-acre Hullavington campus is an investment for our future, creating a global hub for our research and development endeavours. It will enable us to continue creating world class products and jobs right here in the Cotswolds.”

The investment is the latest in a number of expansion announcements by Dyson. Last year it unveiled a £250m extension of its existing Malmesbury headquarters and earlier this year it opened a new technology centre in Singapore.

Dyson has tripled its UK workforce in the last five years and its sales have doubled. Dyson reported revenues of £1.7bn in 2015, up 26% year on year, with profits of £448m. It is investing £7m a week in research and development.

Dyson himself still owns 100% of the company and is estimated to be worth £5bn – more than Sir Richard Branson.

Brexit will lead to unfair deportations of EU citizens, academic warns – New Statesman

Brexit will lead to unfair deportations of EU citizens, academic warns – New Statesman

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EU citizens in the UK will find themselves unfairly deported after Brexit whatever the arrangements, a European politics specialist has warned.

According to Anand Menon, a professor of European politics at Kings College London, inflexible bureaucratic rules could catch out EU citizens who have moved back and forth from the UK, or have similarly unusual circumstances.

He was speaking after Irene Clennell, based in Durham since 1988, was deported to Singapore because the Home Office judged her time spent outside the UK caring for her parents invalidated her right to remain. 

Menon said: “Bureaucratic rules don’t take into account the specific circumstances of the individuals. Any possible model for EU citizens in this country will involve unfairness. 

“I am sure there will be ladies like Irene Clennell. The Daily Mail will be full of stories about terrorists who are allowed to stay and The Guardian will be full of the pregnant lady who has to leave.”

Despite the inevitable embarrassing stories, Menon said he did not think press coverage would damage the government: “Public opinion seems pretty set.”

Civil servants were already looking into the different visas and work permit options available, he said: “There is an awful lot of thought being put into this in the Home Office.”

The House of Lords is expected to vote for an amendment to the Article 50 bill protecting EU citizens on Wednesday, which would in turn force MPs to reconsider the issue.

However, even if the government offers right to remain for EU citizens in the UK, there could be complications, according to Menon: “If we say on March 15th that anyone here can stay, what about the guy who has popped out of the UK to visit his dying aunty?”

Migrants’ Rights Network director Fizza Qureshi said that while there was a lack of clarity on EU citizens’ rights, there were worrying precedents.

She said: “From the way standard immigration rules are applied, even when people meet the minimum income threshold [of £18,600 a year], applications are still being rejected on technical grounds.”

 

Brexit: UK economy ‘sleepwalking into a disaster’ without regional immigration policy – The Independent

Brexit: UK economy ‘sleepwalking into a disaster’ without regional immigration policy – The Independent

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The Independent

Brexit: UK economy ‘sleepwalking into a disaster’ without regional immigration policy
The Independent
The UK economy is “sleepwalking into a disaster” unless the country adopts a nuanced regional immigration policy to fill the skills gap left by lower immigration after Brexit, a Parliamentary Committee was told on Tuesday. Professor Robert Wright

Sturgeon: new vote on independence likely if Scots get no EU deal – The Guardian

Sturgeon: new vote on independence likely if Scots get no EU deal – The Guardian

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Nicola Sturgeon believes a second independence referendum will become a “legitimate, almost necessary” step unless Scotland secures a special relationship with the European Union before article 50 is triggered.

The first minister used a speech in Edinburgh to accuse Theresa May’s government of putting the settlement which established the Scottish parliament under “grave threat” by rejecting Sturgeon’s calls for a special deal.

Sturgeon earlier blamed her moves towards a second referendum on the prime minister’s “sheer intransigence” in an article for the Times, in a further effort to push May into fresh concessions.

May is under pressure from within her cabinet to counter Sturgeon’s agitation, increasing expectations the prime minister could set out what Scotland will gain from Brexit when she addresses the Scottish Conservative annual conference in Glasgow on Friday.

May has been publicly warned by two former prime ministers, Sir John Major and Tony Blair, that her quest for a hard Brexit threatens to trigger a second independence referendum.

Blair said earlier this month a hard Brexit would make Scottish independence “much more credible”.

In turn, there is growing speculation Sturgeon will use her conference speech in Aberdeen later in March to confirm she plans to table a new referendum bill at Holyrood, or demand the UK government gives Holyrood the powers to stage one.

Hinting again that she is on the brink of calling a new independence vote, Sturgeon told the David Hume Institute on Tuesday the prime minister had to prove that Scotland would have a bespoke deal before she triggered article 50 by the end of March.

Sturgeon said that if May failed to do so, then “proposing a further decision on independence wouldn’t simply be legitimate, it would almost be a necessary way of giving the people of Scotland a say in our own future direction”.

She added: “It would offer Scotland a proper choice on whether or not to be part of a post-Brexit UK.”

Ruth Davidson, the Scottish Tory leader, accused Sturgeon of deceiving voters since the UK government’s white paper on Brexit stated unambiguously that none of Holyrood’s existing powers would be removed. The document also suggested Holyrood would gain extra powers.

“This hyperbole from the first minister takes synthetic grievance to a whole new level. Frankly, she sounds shrill,” Davidson said.

“Nicola Sturgeon’s attempt to use Brexit to manufacture the case for a second referendum has quite simply failed.”

NHS and social care in England risk new staff crisis because of Brexit – The Independent

NHS and social care in England risk new staff crisis because of Brexit – The Independent

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NHS and adult social care services are facing a further crisis after Brexit unless the Government guarantees the rights of EU workers to remain in the UK, new analysis has shown. 

More than 140,000 NHS and adult social care workers in England are EU migrants, with London, the South East and the East of England the most vulnerable to losing vital staff, the TUC found.

London would be the worst hit, with 13 per cent of adult social care workers and 9.8 per cent of the NHS workforce made up of non-UK nationals from the EU.

Across the country, 7 per cent of adult social workers and 4.5 per cent of those in NHS jobs could be affected, numbers which already overstretched services can ill-afford to lose.

“The government is creating appalling uncertainty for thousands of NHS workers and care workers. It’s a terrible way to treat dedicated public servants. And if Brexit means they have to leave, our health and social care services will struggle to cope,” TUC General Secretary Frances O’Grady said. 

Earlier this month MPs resoundingly voted down an amendment to the Brexit bill unilaterally guaranteeing the right of around 3 million EU nationals already in the UK the right to stay after the country exits the EU.

Ms O’Grady called on Prime Minister Theresa May to immediately guarantee the right to remain before Brexit negotiations officially begin.

“It’s the right thing to do. And it will regain some of the goodwill Britain needs to negotiate the best possible Brexit deal,” Ms O’Grady said.

Any loss of workers would come at a time when social care spending has already been cut by a fifth from £8.1bn in 2005-06 to £6.3bn in 2014-15, according to figures from Age UK. 

NHS England data also shows that the number of A&E patients attended to within four hours has also hit record lows.

Nicola Sturgeon’s Brexit deal ‘would lead to fracturing of UK trade’ – Telegraph.co.uk

Nicola Sturgeon’s Brexit deal ‘would lead to fracturing of UK trade’ – Telegraph.co.uk

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The plan would require Scotland to join the European Free Trade Association (EFTA) and the European Economic Area (EEA) but the Tory report noted only sovereign states can follow this route and there is “no indication” member states would allow it.

Ms Sturgeon’s proposal would also mean having to differentiate exports from Scotland and those from the rest of the UK, which would be subject to separate trading arrangements.

The report said “inevitably” the flow of goods between England and Scotland would have to be controlled, with “partial tariffs” if a product contained components from both sides of the Border. “The complexities of such an arrangement are staggering,” it noted.

Instead it endorsed Mrs May’s plan to request special deals for certain sectors, such as financial services and agriculture, which would apply across the UK.

With the proportion of Scottish exports going to the EU in decline, it argued that Brexit is an opportunity to expand markets in other parts of the world.

But a spokesman for Mike Russell, the SNP’s Brexit Minister, said: “It’s hardly a surprise that a Tory Commission including a heavy dose of Tory politicians backs the Tory Government’s plan to drag Scotland out of Europe against its will – despite Ruth Davidson’s backing for our continued place in the single market immediately after the Brexit vote.”

The Scottish Chambers of Commerce also argued that having a different immigration policy would not mean creating a hard border with England. Liz Cameron, the organisation’s chief executive, said “an effective and efficient process” could be put in place.