John Bolton's, erm, "ambitious" sectoral trade deal idea might escape the clutches of WTO law for a while but would run smack into the US Congress. In fact it's mainly a foreign policy signal(from US side) and to sway gullible MPs and voters (from UK). Me: ft.com/content/34c5bb…
NB v quick thread on interesting wrinkle on attitudes to Ireland and UK in Washington. During the Troubles, State Dept and some foreign policy hawks were always more pro-UK for natsec reasons, as opposed to the largely Dem Irish-American caucus on the Hill. 1/n
Obviously since GFA those tensions have dissipated. In the meantime, not least because of that dissipation, the Irish-American caucus in Congress has become more bipartisan. That's not good news for the UK trying to get US support in case of a no-deal Brexit. 2/n
The influence of Irish interest can be seen in Nancy Pelosi's repeated to warning to the UK to forget a US-UK trade deal if it threatens the GFA. irishtimes.com/news/politics/… Unfortunately for UK, it's a lot easier to block a trade deal on Capitol Hill than to get one through. 3/n
Added to which, if there is a weak/sectoral deal, the traditional US mercantilist interests like farmers will also be against it. So you've got irate blocs of Congress on foreign policy (Ireland) *and* export grounds. In a no-deal Brexit this deal ain't gonna happen. 4/4
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Today's col. This Macron-in-China thing. He has form, 2 years ago alienated half the EU pushing a dodgy investment deal with China. EU assertiveness isn't foiled by manipulation from DC or Beijing but by internal divisions his approach doesn't fix.🧵1/n
This was the Comprehensive Agreement on Investment (CAI), driven through by Angela Merkel literally in the dying hours of Germany's presidency of the EU member states in December 2020 while the incoming Biden admin was still in transition. 2/n
France publicly sceptical till last minute on human rights grounds then switched to be keen. So keen in fact that Macron breached protocol (annoying esp Italy) by joining the videoconference that sealed the deal with Merkel, von der Leyen, Michel, Xi. corriere.it/economia/finan… 3/n
Today's Trade Secrets. The UK, that noted Asia-Pacific nation, is joining the Trans-Pacific Partnership. Entry talks have been a rough ride & it's conceded things (palm oil & beef imports) it might get flak for. Worth it in the end? I say no. A🧵: 1/n
The narrative is all "buccaneering free-market Global Britain making its mark in the fastest-growing region on earth", blah blah. Keeps the pound-shop David Ricardos in the right-wing British think-tanks happy. In reality the gains are utterly minimal (0.08% GDP). Why? 2/n
Ironically because the UK already inherited & replicated the EU's bilateral deals with the biggest economies in the CPTPP (Japan, Singapore, Chile, Mexico, Canada). This adds v little on top. It would add more if Korea joined the CPTPP, but still only c. 0.2% of GDP. 3/n
Today's Trade Secrets and a 🧵. Biden's new chip export controls are, unlike Trump crashing clumsily about, a v serious attempt to decouple US/China in tech and more. TBF they tried hard to get allies like EU on board but then went it alone. RISKY. 1/n
Not just obvious stuff (China retaliates on rare earths, ramps up manufacturing basic chips and floods world market to create dependence). Also combining it with Biden's onshoring industrial policy, Chips Act etc increases chance of ruptures in supply network. 2/n
You're not going to know what weaknesses are in the network and what effect severing major links will have unless you've done it. Semiconductor production is a complex ecosystem, not a simple supply chain. Weaponised interdependence can hurt the aggressor too. 3/n
Reupping Trade Secrets from this morning with a thread. A lot of complaints around the world about the strong dollar and high Fed rates. But US unlikely to be moved and go for a 1985 Plaza-style deliberate weakening for a while yet. 1/n
Some countries seeing their currencies tank are obviously partly themselves to blame (Turkey seems to be setting monetary policy, and the UK fiscal policy, on a dare). Overall the rise of the dollar is entirely explicable but the magnitude looks excessive. 2/n
However from US's POV the strong dollar is providing some helpful anti-inflationary pressure. Back in the 80s, it was complaints from manufacturers and farmers over competitiveness that got the Reagan admin to shift position and support weakening the dollar. 3/n
Basically UK fiscal policy at the moment is just a doctoral fieldwork assignment gone horribly wrong.
In fact, since it was about William III's (failed) effort at improving the quality of English coinage, there's also a "continental European immigrant comes in to fix stuff the English have broken" angle. Just as well William only needed a massive invasion force & not a work visa.
Seeing this graphic doing the rounds a lot WRT to the UK-Australia trade deal. It's really quite misleading. Here's why. AFAICT (happy to be corrected) most of these issues are either legally unchanged as a result of the deal or will make no difference anyway. Specifically: 1/n
- Australia's really not going to be exporting any significant amount of chicken or pork to the UK - it's too far away and they're not a low-cost producer.
2/n
- Hormone-raised beef is legal in Oz but unless they've written something specific into the trade deal the UK can continue to ban it as a food safety rather than an animal welfare thing. Oz also has hormone-free cattle farming, from which they already supply the EU and UK. 3/n