In this episode, the Trade Guys sit down with Sweden’s Ambassador to the United States, Karin Olofsdotter. Together they discuss the perks of being a Swede, the U.S.-Sweden trade relationship, and the latest Brexit news.
What We’re Reading
“May ‘shares concerns’ deal could lock UK into backstop agreement”
“Theresa May has admitted she ‘shares concerns’ that the UK could be locked into the backstop arrangement, amid testy exchanges in the House of Commons following the departure of two cabinet ministers.”
“May insisted the UK had clinched a bespoke Brexit deal that was better than any other model, but conceded that ‘difficult choices’ had been made, which triggered the exit of cabinet ministers Dominic Raab and Esther McVey.”
“In a plea to MPs to back her, she said that delivering the deal was ‘in the national interest’ and that any move by MPs to block it would take negotiators ‘back to square one, more uncertainty, more division’”.
Why it matters: In order to avoid a hard border between Northern Ireland and Ireland, the United Kingdom and EU agreed to a backstop arrangement which would leave Northern Ireland largely in line with the rules required to be in the EU single market until a permanent solution can be found at the end of the exit transition period in December 2020. Critics argue this result abandons UK sovereignty to the EU while removing the UK’s ability to influence the EU because it would leave Northern Ireland, and by extension the UK, at the whim of EU rules. Critics of this arrangement also worry that it will harm the cohesion of the UK as well as its sovereignty because it would create a separate customs scheme for Northern Ireland compared to the rest of the UK.
Key questions: Why is it important that Brexit include an arrangement to allow a seamless border between Ireland and Northern Ireland? What would the economic and political implications be of a hard border between the two? Are there any alternatives to the backstop arrangement? What does the backstop mean for the UK’s ability to independently negotiate trade agreements?
“U.K.’s Brexit Deal in Jeopardy as Senior Ministers Resign”
“U.K. Prime Minister Theresa May was fighting to save her Brexit deal within hours of it being sealed, after a series of ministers resigned amid deepening political turmoil over the terms of her plan to exit from the European Union.”
“Six government ministers, including Brexit Secretary Dominic Raab, one of the architects of the deal, quit Thursday as the prime minister faced a barrage of criticism over the plan in Parliament, raising the possibility that she could face a challenge to her leadership.”
“In a press conference late Thursday, Mrs. May stood by her deal and suggested she would fight any leadership challenge. ‘This is a Brexit that delivers on the priorities of the British people,’ she said, adding that not moving forward with it ‘would be to take a path of deep and grave uncertainty when the British people just want us to get on with it.’”
“’Am I going to see this through? Yes,’ she said.”
Why it matters: Even though Prime Minister May has managed to reach an agreement with the EU on the United Kingdom’s exit, she still must get it approved by her parliament. Members of Parliament within Prime Minster May’s party and outside of it have voiced disapproval of the deal and some of her cabinet ministers, including the member responsible for negotiating Brexit, have resigned over the content of the deal.
Key questions: Why are members of parliament unhappy with Prime Minister May’s Brexit deal? What happens if Prime Minister May fails to get parliamentary approval of her Brexit deal or receives a vote of no confidence?
“Brexit: EU leaders dismiss talk of renegotiating draft agreement”
“EU leaders have dismissed talk of renegotiating the draft Brexit deal and warned the UK’s political situation could make a ‘no-deal’ more likely.”
“German Chancellor Angela Merkel said there was ‘no question’ of reopening talks as a document was ‘on the table’.”
“Meanwhile French PM Edouard Philippe said there was a need to prepare for a no-deal because of UK ‘uncertainty’.”
“The EU has set out a series of meetings leading up to 25 November when it plans to approve the Brexit agreement.”
Why it matters: European Union leaders are clearly signaling that they are unwilling to reopen negotiations, even as it appears that Prime Minister May’s proposal may fail to get approval by parliament. This could raise the chance that a no-deal Brexit occurs, also known as a hard Brexit.
Key questions: What would a hard Brexit mean for trade among the UK, EU, United States, and rest of the world? How can companies and governments prepare for a hard Brexit? Is a hard Brexit now the most likely scenario?
“Europe ready to retaliate if U.S. imposes auto tariffs: EU trade chief”
“European Union Trade Commissioner Cecilia Malmstrom said on Wednesday that the EU has a list of potential retaliation targets ready in case U.S. President Donald Trump imposes auto tariffs on the bloc’s member states.”
“Malmstrom told reporters after a meeting with U.S. Trade Representative Robert Lighthizer that they did not speak specifically about auto tariffs, but focused instead on regulatory cooperation issues and ways to enable EU countries to import more American soybeans and liquefied natural gas.”
“Malmstrom did not specify the U.S. products on which the EU would levy retaliatory tariffs, as consultations with member states would need to take place, but she said the list could include ‘all kinds’ of products.”
Why it matters: Despite the Trump administration pledging that it would not impose auto tariffs on the EU while negotiating a trade deal, the EU is still preparing to retaliate against such an eventuality. The scale of retaliation would likely be massive.
Key questions: What U.S. products could the EU retaliate against if the U.S. imposed auto tariffs? Why would the U.S. impose auto tariffs on one of its allies, the EU? What amount of trade would be impacted?