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Boris Johnson leads a new British government that is composed mostly of ministers who want to see Brexit happen, and giving the positions of Home Secretary and Foreign Secretary to persons who do not care what happens as long as Britain leaves the European Union. Johnson's date is October 31st for leaving the EU. Sajid Javid, a former Deutsche Bank AG executive is the new chancellor of the exchequer. Priti Patel is new Home Secretary. Dominic Raab a former lawyer who has called for parliament to be suspended if need be so that Brexit can be pushed through is the new Foreign Secretary. Dominic Cummings who headed the Leave campaign for the Brexit referendum in 2016 is the new adviser at 10 Downing Street. Johnson's strategy is to pack the cabinet with people loyal to his vision of leaving the EU October 31st regardless of what the EU does.  The EU has not changed its position and is even less likely to consider any new Irish border proposals. Three top ministers are opposed to Mr. Johnson's views and resigned. Treasury chief Philip Hammond, Deputy primeminister David Lidington, Justice Secretary David Gauke, all resigned in opposition to Mr. Johnson simply pulling Britain out of the EU. Johnson once said all he feared from Britain abruptly leaving the EU was a shortage of Mars bars. During the election in the Conservative party Mr. Johnson was mostly quiet and avoided any gaffes to sound statesman like, yet as the process unfolds Mr. Johnson is likely to face the same problems faced by his predecessor Mrs. May. Added to this is the new opposition of moderates like Mr. Hammond and Gauke in the Conservative party that could topple the government and lead to a general election with just three vote swing in the other direction doing this. Mr. Johnson has prepared for this by having Mr. Cummings as a top adviser in the event he faces a general election. Meantime the Labour party initially not favoring a second referendum with Mr. Corbyn's ambiguous views on Brexit, as shifted gradually to the leadership and the rank and file all favoring a second referendum and for Remain. As Greg Ip has pointed out in the WSJ this week the conditions have changed with protectionism, nationalism and hostility to globalization, and president Trump not planning concessions of any sort even for the UK in trade negotiations. This means to low productivity of less than 1% to support stifled wages, one would have to add a 3.5% hit to GDP from a no deal Brexit such as Mr. Johnson approves according to the IMF. With the migration issue not what it was three years ago and reduced to a trickle this new situation must be on the minds of Mr. Corbyn, Labour and Conservative moderates. ...

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The only way the Conservatives can form a majority to govern in Britain is by getting the support of the Democratic Unionist Party with its 10 seats, and this would still give Conservatives 328 seats in parliament, with 326 required for a majority. This very thin 3 seat majority could lead to a fall of the government if a couple of Conservative party members defected. Here Davies points out that though the Democratic Unionist party supports Brexit it is of a very different nature. The party is based in Ireland and originated with Rev. Ian Paisley. With its Irish roots it wants free movement of goods and people across the border with Ireland which is an EU member, access to EU funding and protection for farmers. Ireland has shown serious concern about the Brexit vote, and Northern Ireland voters voted against Brexit 56% to 44% for Brexit. This open border and EU support is close to what is currently in place. As Davies points out this puts the whole Brexit negotiating process in doubt, with no coherent position for Britain at all, leading to a collapse of the talks and no deal with the European Union. Another reason the doubts about Brexit are likely to grow is that a large part of the UK Independence Party support has disappeared, with UKIP getting 1.8% of the vote compared to about 11% in 2015 election. The combined vote of the parties that see Brexit as a priority for Britain was in fact about 45.1%, combining Conservatives 42.4%, Democratic Unionist 0.9% and UKIP 1.8%. The parties that did not see Brexit as a priority for Britain won over 50% of the vote this time- Labor 40.0%, Scottish National party 3.0%, Liberal Democrats 7.4%, according to BBC. Davies says the increasing uncertainty is bad for the British economy. In coming months doubts are likely to grow about whether the referendum was a priority for Britain, and how this is a distraction from the other serious issues facing the British economy to ensure a better future. ...

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EU foreign policy is process driven and requires the agreement of 27 countries in the EU, which is called the coalition of the unwilling. British foreign policy is ideologically driven. After the Brexit deal was reached in the last week of December 2020, no mention was made of coordination in foreign policy. The Boris Johnson government has quietly dropped the whole idea of cooperation with the EU in foreign affairs that the government of Theresa May supported. May supported deep cooperation between Britain and the Eu at the Munich security conference in 2018.  Today most cooperation is absent and Britain sees itself freed from the constraint of coordinating its foreign policy. Britain is now free to act independently in foreign policy they very reason for Brexit. It means Britain will negotiate its own relationships with other countries based on what is good for  Britain. British euroskeptics were always critical of the French way of saying France would act independently in making foreign policy and at the same time saying it was working within the EU. ...

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Landler and Barry say in this report in the NYT that the situation of government paralysis in the U.S. parallels the one in the UK with no-deal Brexit around the corner. President Trump wants a border wall (steel or other kind) on the border with Mexico as a campaign pledge. In the UK Conservative party faction supporting Leave from the European Union, including supporters of Boris Johnson, seek Leave at all cost. Johnson called the shortage of Mars bars a small inconvenience, as the Theresa May government prepares to push its own Brexit deal through Britain's parliament. In a separate report the NYT tries to show that over 80% of the drugs come in through entry ports and the border crossings are largely families or unaccompanied children. For the first time -since the 1950's and the segregation struggles in the U.S. -populists battle the elites in the large cities, say Barry and Landler. The rural urban divide, is seen in both sides of the Atlantic, in Europe and the U.S. ...

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A confidential report made for the British government is leaked to Buzzfeed News. The report points out that under every plausible scenario the British economy would take a hit from Brexit even it it remains in the single market. In the best possible scenario that it remains in the single market after leaving the EU Britain's GDP would decline by 2% over a 15 year period. In the scenario where Britain made a comprehensive trade deal with the EU, yet remained outside the single market growth would be lower by 5% than current forecasts. Ever sector of the economy is negatively affected except agriculture, according to the report- "EU Exit Analysis- Cross Whitehall Briefing." The current situation is that of a transition period for Britain with the EU  giving Britain 21 months of membership benefits, without the power to form new EU laws. UK economic growth of 1.8% for 2017 is the lowest since 2012, with the decision for Brexit affecting the economy adversely. This even leaves open the possibility of a new referendum on Brexit in coming years. ...

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Britain's parliament voted Jan. 15, 2019 to reject the Brexit deal crafted by Theresa May with the European Union by a huge margin of 230 votes. The vote was 432 to 202, with 118 Conservative MP's voting against along with the entire Labour Party members. 

If a no-confidence vote by the opposition Labour Party is defeated as expected with 118 Conservative MP's backing the government in that vote, the uncertainty and rancour and bitterness will continue. May will look for ways to tweak the deal to get it through parliament. If this fails Britain could march out of the EU with no deal on March 29, 2019, or the date is extended. She opposes extending the date or having a second referendum.

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Jeremy Corbyn was a euroskeptic calling the European Union a "banker's club." Most of his Labour Party's membership opposes Brexit. Experts say a substantial part of the Labour Party's parliamentary vote is needed for any Brexit deal to pass. So far only three members of the Labour Party have deviated from the party direction, and Labour remains united. Corbyn now has the choice to reverse his own skepticism of the EU, so that Labour has a shot at forming a new government to reverse years of Tory policies that Labour sees as neglecting workers.

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Mr. Trump told Irish prime minister Leo Varadkar at the White House he is disappointed with the way Brexit has evolved in the three years since he supported Brexit during the election campaign. Trump said "it is tearing the country apart. Its actually tearing a lot of countries apart."  After a series of votes in the British parliament Trump told reporters he gave May some negotiating advice. "I gave the prime minister my ideas on how to negotiate. I think she would have been successful., she did'nt listen to that." So what happened? What advice did Trump give on negotiating? There are only some hints on this. Theresa May told the BBC in an interview after Trump's visit to London in July 2018- "He told me I should sue the E.U. -not go into negotiations., Sue them."  Trump made a prediction a day after the referendum to Leave saying "the E.U. is going to break up." This was at the time of the financial crisis in the European Union with problems in Greece, Spain and Portugal. Since then the economies of these countries revived. Spain has 3% growth for three years even though it faces fresh elections. In his 2000 book "The America we Deserve" Trump pointed out his sense threat the U.S. should pull back from the E.U and save millions of dollars annually. In recent years he has suggested that the E.U was "a foe"  and "it was formed as a consortium so that it could compete with the United States." The problems in Europe happened in the period 2016-2018 with divisions emerging on the issue of immigration. This wave of immigration was a result of Arab and African conflicts and lag in Africa between development and the rapidly rising population. Chancellor Merkel was ill prepared to handle this wave of immigration and in retrospect her policy did little to address the roots of the problems of immigration from North Africa, a policy later adopted when popular support for immigration of this kind and scale declined. It affected the vote for Brexit playing into deep seated doubts about the benefits of EU membership in parts of Britain.  Mr. Trump supports no-deal Brexit which was defeated by large margins in the British parliament and lacks support across all parts of society, business and political parties in Britain. Trump own sense that Brexit has divided many countries and his dialogue with the Irish prime minister must show an awareness of the views of Ireland about the hard won peace and E.U. borders in Ireland.     ...

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President Macron of France tests positive for coronavirus on the morning of Dec. 17. He will now self isolate for 7 days. Leaders who he has met recently are the prime ministers of Spain Pedro Sanchez and Portugal Antonio Costa. He was seen embracing Antonio Costa. Mr. Macron was part of the tough negotiations for the European trillion dollar stimulus, for a recent all night EU negotiation, and involved in Brexit talks. He met with Charles Michel of the European Council and Ursula Leyen, head of the European Union. All or most of these leaders will now have to self isolate. Mr. Macron wore a mask during the entire period and was careful not to shake hands. 

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Executives are outspoken in their frustration with having to develop plans to operate in the event Britain leaves the European Union on March 29 without a deal. Ties in logistics bind Britain with the single customs market of the EU. 

The British plans of a German toolmaker Heller are shown here to continue operating. Questions are raised whether Heller will close it Brexit goes the wrong way. Across Britain plants have closely timed cross border supply chain. Airbus Chief Enders calls the Brexit failures a "disgrace."

All the uncertainty means new investments will be postponed, and the cost of contingency planning will increase. Some say they have difficulty believing this crash culture and say its not British way of doing things.

 

 

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What happens if Theresa May's deal with the European Union is rejected by parliament. This report in the BBC News says May has several options, including going with no deal Brexit, or shifting her stand for having a customs union with the EU under another name. The second option would tear the Conservative Party apart. Or Delay which this report says is a tactic favored by Theresa May.

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The parliamentary elections in Britain have changed the environment in which the first day of Brexit talks took place on June 19, 2017. There is a great deal of uncertainty as the government of Theresa May has only a thin majority in parliament. A debate is now taking place on how much support Brexit has after the parliamentary election, and what kind of Brexit should take place, what are the risks and uncertainties for Britain. As expected the European Union negotiator Michael Barnier emphasized that some issues have to be resolved first- that Britain owes the European Union between 40 to 60 billion euros over 5 years, the rights of EU citizens in Britain, for the beneficiaries of EU policies and for the impact on borders particularly in Ireland.  Only then would the EU discuss access to the EU market for Britain. Mr Barnier handed British negotiator David Davis a hiking stick, a way of saying this will be a long hike up the mountain. In Britain there is a growing sense that the talks cannot be completed by the current deadline in 2019, that it might take 5 years. Another hurdle- Britain cannot have access to the single market if it seeks to control immigration. For the European Union there is the additional problem of how to negotiate with a government that may not be there in a few months, say experts. For the European Union Brexit is now more of a distraction, as there are other issues that rank higher such as relations with the Trump administration, NATO and Russia, refugees and borders.       ...

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President Trump on a three day visit to the UK promised a free trade deal with Britain if it made a decisive break with the European Union. Such a free trade deal could take years, offer small benefits compared to the loss of the much larger trading relationship with the European Union. It would face hurdles in passage through Congress because Democrats controlling the House of Representatives see a decisive break with the European Union including the customs union arrangement as affecting the open border in Ireland risking the hard won peace in Northern Ireland.  Prime Minister Theresa May proposed a withdrawal arrangement that would keep the customs union arrangement but has failed to secure the support of a faction within her Conservative party that favors a decisive break from the EU. Such a break that Mr. Trump and Boris Johnson the leader of this faction -and a favored candidate to succeed prime minister May after her resignation- would reduce Britain's GDP over the next 15 years at the higher end of the range of 0.1% to 9% a year. A decisive break called a no deal Brexit with no arrangements or agreement for withdrawal with the EU, would lead to a loss closer to the 9% estimate. British experts to the EU are about $275 billion or 44% of its total exports compared to about $44 billion to the U.S., according to HMS Customs source, showing how important it is for Britain to maintain a close trading relationship with the European Union. British farmers would also face competition through agricultural imports from the U.S. in a free trade deal. During his visit Mr. Trump also stated the National Health Service, everything would be on the table in a free trade deal with the U.S.  Theresa May responded by saying that the NHS would not be open for negotiation to American corporate involvement. Public sensitivity is high on any change to the National Health Service. The trip of president Trump to London in which he supported Boris Johnson as candidate to succeed Theresa May, with discussions between Trump and Johnson for 20 minutes, and a visit by Nigel Farage to the U.S. embassy, and no meeting with Labour party leader Corbyn, only shows the widening of differences on the issue of British withdrawal from the EU making any deal for withdrawal even less likely. Labour party leader Jeremy Corbyn now favors a second referendum on whether Britain should leave the EU.  ...

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In an earlier interview with the Sun newspaper, Mr. Trump said he disagreed with Theresa May's approach to Brexit and called it "turmoil" that Boris Johnson had resigned as Foreign Secretary. He went on to say that Boris Johnson would make a great prime minister, that May's handling could "kill" a trade deal with the U.S. At the meetings and press conference Trump reversed this and called it "fake news" as it did not tell the whole story and his positive comments. Trump said at the joint press conference with May that he was open to a trade deal and that how May handled Brexit was upto the prime minister- "Whatever you do is OK with me."

Protests took place in London for Trump's visit including a Blimp over London during the rally.

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A vote on Brexit giving parliament a bigger voice if no deal is reached with the EU was defeated narrowly in parliament with 324 for and 298 against. Tory members led by Mr. Grieve called for parliament to take part in future strategy if no deal is reached by March 2019. British prime minister Theresa May argued that this would weaken Britain's negotiating position with the EU in Brussels. Mr. Grieve and Tory dissenters agreed to support the government. The recent election with Labor winning 40% of the vote leaves the Conservative Party's Mrs. May dependent on a small number of MP's from Northern Ireland for her government to survive. Some members of May's cabinet feel cutting off Britain from the EU market will hurt the economy in their districts, and a junior minister resigned. 

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Britain's parliament voted 358 in favor and 234 against to back prime minister Boris Johnson in his effort to get Britain to leave the European Union by January 31, 2020. Negotiation will not be extended beyond 2020. With a comfortable 80 seat majority and many lawmakers newly elected in parliament in favor of Brexit the process appeared easy compared to the problems faced by Theresa May who lacked a majority. In October Mr. Johnson negotiated a deal with the EU which stated how Britain plans to leave the EU. This covered citizens' rights, a financial settlement to leave, and an arrangement to avoid a physical border in Ireland. With another vote in parliament and passage in the House of Lords the process now appears certain to be completed before January end 2020. To get Brexit done Mr. Johnson sought blue collar support in the north of England and the Midlands, a region neglected by Labour and the old Conservatives. Too much of the focus had remained on London. This strategy worked after neglect of working class districts by Labour under Blair and Brown. Mr. Johnson's approach was to commit the Conservatives to new infrastructure spending, spending on schools and the NHS, just as Mr. Trump had done in the U.S. to permanently change the Republican party. This combined with an appeal to patriotism and the idea of Britain drew strong support across England in the election. ...

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A tentative Brexit deal with the EU is reached but it is not clear that it can win support of the Cabinet of prime minister Theresa May, even before it has any chance in the British parliament. March 29, 2018 is the 2 year period for negotiations to arrive at a deal with the EU. The pro-EU transport minister Jo Johnson resigned and called for a second referendum, saying that the decision in the first referendum to leave the EU was made because false prospects had been presented by the Leave EU campaign. 

Because of the issue of Northern Ireland the U.K would remain indefinitely in the customs union, and this is opposed by the Leave EU supporters in the Conservative party government of prime minister May.

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Ivan Rogers, UK ambassador to the European Union for three years till 2017 was sharply critical of the British government and forecast some of the Brexit problems. He has a book "9 Lessons in Brexit," which appeared in Feb. 2019. Here he is interviewed by Der Spiegel. He says he expected some of the problems but is still surprised that 4 weeks before the deadline the political class in Britain has not yet figured out what kind of Brexit they want. Here he points out that Cameron and Blair represented the centre in British politics. But that centre has now collapsed after the financial crisis and the period of austerity led to widening gaps between the different parts of British society. The public is now deeply alienated from both major parties. In both parties the populists on the left and the right have gained a bigger influence, as a result there are no centre right or centre left figures who command public influence. Rogers is a civil servant of high rank who has worked with several prime ministers including Blair and Cameron. His comments are worth listening to.  Was Theresa May the right person to tackle Brexit? Her problem says ROgers is that she started with a hardline position of reducing the number of people entering the UK from inside or outside the EU. Once you do this you cannot have free movement of goods, services and capital, so you have to leave the single market. And if Britain wanted a fully autonomous trade policy then it cannot stay in the customs union. Rogers thinks Theresa May never really understood what this meant- that it was going much further out of the European Union than Norway or Switzerland, or even Turkey. Now as she is trying to go back her right wing cries betrayal. Do British prime ministers understand the single market, the customs union, or how the EU really works? Rogers worked on European issues for a long time and he says after working very closely with British prime ministers that none of them had a deep understanding of how the European Union works. Plus they lack any emotional attachment to the EU, because of the mercantile relationship Britain has had with its neighbors. About the relationships in Europe between the Germans, the French, the British, what is it and what will it be like? Rogers says he has not seen a thinner relationship in his lifetime. He thinks the European political elites are not talking to each other anything like what was done 20 or 30 years ago. He says the Brits have to take a lot of the responsibility because the British political class lost interest in Europe. What could the Europeans have done? Rogers says the chaos continues because the British don't really know where they want to go. It opaque about the relationship on purpose. Have the Europeans thought about what kind of a continent they want to see after all this is over? This interview tells you more about the Brexit problem that many reports and opinions, bringing a thoughtful way of looking at the problem. ...

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Japan and the European Union announce a new trade agreement, in a response to the protectionist tone of the Trump administration in the U.S. The deal is announced at the time of G-20 meetings in Hamburg, Germany. The deal removes the 10% duty on Japanese car imports to the EU, and removes barriers to European automakers in Japan. Experts say the deal comes at a time when the European Union wanted to come up with a response to Brexit and Trump style protectionist sentiment. European automakers say they need assurances that they will have better access to the Japanese market.

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Brexit is now seen as based on some mistaken ideas that were presented to the public without much thought or seriousness. One of these ideas is that Britain would simply be free to sign its own trade deals with other countries. One such deal would be with a 1.3 billion people rapidly expanding economy like India. Yet India - Britain trade is very small today and is vastly overshadowed by EU - India trade relations. In fact the European Union is India's largest trade partner. By removing non tariff barriers and tariffs India's economy would expand by 1.3 % annually adding $25 billion to India's GDP each year, Ifo research shows. The EU would see 0.14% growth in GDP, a gain of 21 billion euros annually. Germany would boost its automotive and machine tools industries, and India its textile and services industries.  Many British companies manufacture in India and are not exporters. This situation is not likely to suddenly change with Britain able to strike its own trade deals. ...

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Three members of parliament from Britain's Conservative Party who backed a second referendum on Brexit to cancel Britain's exit from the European Union left the party to join eight members of the Labour Party who left the Labour party earlier. They formed a new group in parliament called the Independent Group. This narrows Theresa May's majority in parliament to 8 members and increases chances for a new election. Several members of May's cabinet are threatening to quit if Britain leaves the UK without a deal.

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Following Brexit on January 31, 2020, Britain's government led by Boris Johnson prepares to negotiate new trade deals with the U.S. and other countries. The freedom to negotiate these trade deals was a key part of the plan of Brexit supporters and Mr. Johnson. The Times, Britain's leading newspaper, looks at the prospects of trade deals with each country- the U.S., Australia, New Zealand, Japan. Facing re-election Mr. Trump is seen as favorably inclined to work out a trade deal that he can show during the campaign. Trade discussions have taken place between the UK and Australia, Japan. Mr. Morrison in Australia and Mr. Shinzo Abe want to see strong trading ties and investment with Britain. Japan or Australia could be the first countries that work out a trade deal with Britain as discussions are at an advanced stage.  Britain has a small deficit with Japan in trade. It has a small dollar surplus in trade with the Australia and New Zealand. With the U.S Britain has a large surplus, it exports 121 billion pounds and imports 76 billion pounds. The prospects of trade deals are enhanced by the similarity in outlook of the governments of the U.S., Australia, and Japan, which share views on jobs expansion, economic growth and are centre right in economic philosophy. They also share a strong connection with working class voters under Johnson,Trump and Morrison. Mr. Trump is seen as a strong deal maker so that any deal would involve some concessions from Britain that increase U.S exports, including farm exports. Difficult issues with the U.S. are -pharmaceutical drug imports that could increase Britain's NHS cost for drugs, the digital services tax from Britain on U.S.  companies such as Google and the Trump retaliatory threat to impose tariffs beyond the current 2.5% on car imports of $11 billion from Britain. On agricultural imports Britain's natural foods preference conflicts with imports of genetically modified (GMO) foods from the U.S. Experts say this could lead to a partial or Phase 1 deal that does not need approval from the U.S. Congress, similar to the Phase 1 trade deal with China which sidestepped the thorny issues on trade. This is something both sides can show their support base as a win. ...