On Wednesday next week, the US Trade Representative will hold a public hearing on whether the US should reinstate retaliatory tariffs on various imports coming from the EU, in retaliation for an EU ban on US hormone-treated beef exports. This is a longstanding trade irritant between the EU and the US, first erupting with a (successful) US complaint at the WTO in 1996. A compromise reached in 2009 allowing greater quantities of non-hormone beef on the EU market temporarily removed US punitive tariffs, but US farmers believe they have not done as well out of these expanded quotas as they should have. Wednesday will see a debate on putting tariffs back.
The British Prime Minister has just returned from an important visit to a large UK trading partner with a controversial and often provocative leader. There was talk of a possible future bilateral trade deal between the two, and agreement to start preliminary discussions to this effect. This was a cause of mild irritation in Brussels, where the UK’s right to trigger such bilateral engagement is contested, and its tendency to break European ranks seen as a political problem. Yes, Theresa May has just been in Ankara.
Yesterday’s government White Paper on Brexit confirmed that the UK will leave the European nuclear research and cooperation framework Euratom. Having concluded that Euratom is “uniquely legally joined” with the EU, the government argues that Brexit will require the UK to leave Euratom when it leaves the EU. While Euratom has its own treaty status, it is the central role of EU institutions – specifically the European Commission and European Court of Justice - in Euratom which appear to have determined the government’s position. The timing is unfortunate for a UK nuclear industry which has been progressing – albeit slowly - towards new build projects at Hinkley Point C, Wylfa and Moorside, but will now be caught in a wave of new uncertainty.
A poll this week shows French presidential candidate Emmanuel Macron for the first time making it to the second round of the elections. It also suggested that he would easily defeat Front National leader Marine Le Pen. Previously dismissed, the former investment banker and minister under François Hollande, has now become the unexpected frontrunner in France’s most open election in decades.
Manuel Valls’ elimination from France’s Presidential race meant one certainty in an unpredictable election: on 7th May voters will choose a ‘change’ candidate. It may mean the ‘new politics’ promised by Emmanuel Macron, eschewing left/right party structures. It may be the ‘new economy’ promised by François Fillon, with radical structural reforms. Or it may be the ‘new social model’ offered by Benoît Hamon, guaranteeing a Universal Basic Income. But the most immediate change could be a more coherent and assertive foreign policy, driven by a refreshed relationship with Berlin.
It would appear that Macquarie’s status as preferred bidder for the Green Investment Bank, a UK government owned renewable energy investor, is under threat. While the sale was supposed to have been finalised at the end of 2016, Climate Change Minister Nick Hurd confirmed on Wednesday that the government has not taken a final decision on the structure of the sale or whether Macquarie’s bid satisfies the criteria initially set out when the sale was announced. The sale is now being pulled into the UK’s renewed industrial strategy debate.
Yesterday in Wiesbaden, Bank of England Governor and Financial Stability Board (FSB) Chair Mark Carney gave the clearest articulation yet of how financial regulators are weighing the future of fintech. While at pains to predict a “shining future” for financial disruption, he put both innovators and incumbents on notice. The speech gave us three clues about what he and the FSB might conclude when they report to the G20 on fintech in July.
There has been quite a lot of media coverage of the recently finalised negotiations between the EU and the US Department of Treasury and Federal Insurance Office on a “covered agreement” for (re)insurance services. Notable features of the deal include the national, uniform treatment of collateral requirements, exchange of regulatory information between leading supervisors and mutual recognition of financial oversight regimes. This last point in particular couldn’t be more topical.
As the Davos elite gather in the shadow of the Trump inauguration, much of the talk is of uncertainty over the future of globalisation. Davos sessions with titles such as ‘Climate change: COP out?’ highlight the very real fears that the new mood could see politicians privilege the national and local at the expense of the multilateral and global, with damaging impacts on future climate policy.