2 August 2017

Trump seeking “major trade deal” with the UK

US President Donald Trump has told the Wall Street Journal that the US is seeking a comprehensive trade deal with the UK, to be implemented “as soon as it’s appropriate.” He told reporters, “It’ll be a big trade deal – much, much more business than we do right now, many, many times,” claiming that the US is “going to be very involved with the UK.” He criticised the EU for being “protectionist” when it comes to agriculture trade, saying, “You know, our farmers and others can’t even deal with [the EU]. It’s very unfair. And that’s what I’ve been talking about for a long time. It’s so stacked against the United States. Now, the EU was conceived to the point that they wanted to do something to compete with the United States. Well, you know, you could say that’s a friendly act or an unfriendly act. But it’s very protectionist. Among the most, we have farm products that you just can’t get into the EU. And we don’t do that to them.” He also asserted that trade in services would be included in the proposed deal, saying, “It would include everything.”

Source: Politico

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Eurozone economy shows strong growth

The Eurozone economy has grown at its fastest rate since the onset of the debt crisis six years ago, highlighting a more positive outlook after European elections which eased fears of a populist threat. Eurozone gross domestic product growth rose from 0.5 percent to 0.6 percent in the three months to June, driving year-on-year Eurozone expansion from 1.9 percent to 2.1 percent, the highest rate since 2011 and now higher than the UK at 2 percent. The European economy has now expanded for 17 consecutive quarters, and unemployment has dropped to a nine-year low of 9.1%. James Nixon, chief Eurozone economist at Oxford Economics, said, “These numbers are at the top of what is possible to be sustained. If you look at the number of jobs that are being created, this is a very impressive performance.”

Separately, the National Institute of Economic and Social Research (NIESR) has held its growth forecasts for the UK economy at 1.7% for 2017 and 1.9% in 2018. In a press release, NIESR said, “The economy has slowed each year since 2014 and, according to our forecast, 2017 will mark the trough for GDP growth. Thereafter, we envisage a modest recovery that takes economic growth to a level that is close to potential.” It noted that this forecast depended “on a return to meaningful productivity growth from 2018 onwards.”

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Leaked emails from Macron’s inner circle reveal importance attached to maintaining British military alliance

The Times reports that leaked emails from advisers in French President Emmanuel Macron’s inner circle argue that Britain will remain France’s “most important” military ally after Brexit and reveal French suspicion of Germany’s commitment to plans for deeper EU defence co-operation. In correspondence published by Wikileaks, Hervé Grandjean, a senior French official at the defence ministry and adviser to the new administration, wrote to Quentin Lafay, Macron’s chief speechwriter, noting, “In terms of multinational interventions and industrial cooperation, France will be caught between the temptation to seize ‘Brexit’ to advance the CSDP [EU security and defence policy] and the desire to maintain a critical mass of exchanges with the British, who – despite their present obvious withdrawal – remain the most important and the most active country in the field of defence.”

Meanwhile, in a separate exchange, Clément Beaune, Macron’s adviser on the EU and Brexit, wrote that France was “tempted” to stick with bilateral cooperation with Britain “to better hold a firm position in the Brexit negotiation,” noting German reluctance to embark on and fund a fully-fledged joint EU defence policy.

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The Guardian: Cross-party group of MPs to attempt to keep UK in EEA

The Guardian reports that a group of Labour and Conservative MPs will attempt to force a vote on whether the UK should stay in the European Economic Area (EEA) for a number of years post-Brexit. Labour MPs such as Stephen Kinnock, Chuka Umunna, and Heidi Alexander are hoping to work with those Conservatives opposed to a ‘cliff-edge’ Brexit in order to force the government’s hand on the issue. The Guardian reports that one Conservative MP, who is fighting the government’s stance on Brexit, has said there is a chance that an amendment to the EU withdrawal bill could defeat the government unless Theresa May gave more guarantees about the nature of the transition period. Number 10 has ruled out staying in the EEA. Shadow Brexit Secretary Keir Starmer has told the Guardian that Labour is planning to table amendments to the EU withdrawal bill to “ensure it is possible to achieve transitional arrangements on the same basic terms – including the single market and the customs union”.

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Departing Irish UK ambassador calls for UK to remain in customs union or secure special customs arrangements

Dan Mulhall, Ireland’s departing ambassador to the UK has expressed personal “sadness” over Brexit, describing it as a threat to decades of improving relations, and has ruled out the option of a border on the island of Ireland. He said in an interview, “It’s not acceptable to have a border on the island of Ireland because it would be economically disruptive and politically risky. You can’t have a border, it’s not practical. It’s a 300-mile border. It has no geographical basis – it’s not like the river Rhine is running along the border. It’s got hundreds of crossing points. It’s just not feasible to have a border. So you don’t try to do what you can’t do. We have to work out what it [the solution] is.” He continued, “Our first hope would be…a decision on part of the British government to remain in the customs union or something akin to the customs union.” He also dismissed fears that the UK could become a low-tax, low-regulation economy, saying that would make it “next to impossible [for the UK] to secure access to EU markets”.

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Government publishes plans to create new sanctioning powers after Brexit

The Government has today revealed its plans for a Bill granting it legal authority to impose sanctions after the UK leaves the EU. The UK’s ability to impose international sanctions currently derives from EU law, and so in the absence of new legislation the Government would lose this power. Minister for Europe, Alan Duncan, said the Bill “will enable us to impose sanctions as appropriate either alone or with partners in the EU and around the world, to take targeted action against countries, organisations and individuals who contravene international law, commit or finance terrorism or threaten international peace and security.” These new powers would come with an annual review to ensure they remained appropriate, and would also allow individuals or organisations to challenge imposed sanctions.

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YouGov: 61 percent of leave voters say “significant damage” to UK economy would be an acceptable price for Brexit

According to a YouGov survey, 61% of people who reported voting to leave the European Union agreed that “significant damage to the British economy [would be] a price worth paying for bringing Britain out of the European Union,” while 20% of leave voters disagreed. For remain voters, 34% thought that it would be worth undergoing economic harm in order to keep the UK in the EU, while 38% thought that preventing Brexit at any cost would be too much. On age ranges, 46% of leave voters between 18 and 24 years old saw economic damage as a price worth paying for Brexit, while 71% of leave voters of aged 65 years or older said the same.

Asked whether losing their job or a family member losing theirs was an acceptable price for leaving the EU, 39% of leave voters agreed, while 38% did not, For remain voters, 18% said personal or family job loss would be an acceptable price in order for the UK to remain in the EU, while 61% did not.

19% of remain voters also agreed that “significant damage to the British economy after leaving the European Union [would be] a price worth paying to teach Leave politicians and Leave voters a lesson.”

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Bill to relocate EU medicines agency expected to reach almost €600m

The relocation of the European Medicines Agency (EMA), which is due to leave London following the UK’s withdrawal from the EU, is expected to cost €582.5 million. The majority of the bill reportedly stems from outstanding commitments on its current rental contract for offices in Canary Wharf. The EU has demanded that the UK cover costs of relocating both the EMA and the European Banking Authority (EBA) as part of its financial settlement.

Separately, notes from a private briefing to the European parliament’s budget committee warn that 75% of the EMA’s 890 workers “would not want to go to a new location.” This comes as Conservative MP Geoffrey Clifton-Brown has urged the UK government to retain the high-skilled scientists currently working at the EMA. He told The Daily Telegraph, “A lot of those people were involved in shaping the European legislation and I imagine our legislation will have to be very similar to the Europeans’…If there is anything economically and legitimately sensible that we could do we should try and keep them.”

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