The Brexit Deal, The EU, and the North American Trade Aspect…


Trying to find the details within the U.K-EU Brexit deal is more difficult than finding evidence of a Yeti.  The negotiating team secrecy is inherent to the way the elites within the European systems work. Essentially the “betters” rule the proles by hiding the details and relying upon the electorate to “trust” the outlined framework of their elected superiors.

Hiding details is a feature within the European system and the way the government looks at their role.

That said, tomorrow British members of parliament will begin debating the deal for the UK to exit the EU.  The deal was modified by Boris Johnson.  A backgrounder:

.

Farage is concerned, rightly, about how the framework of the EU customs union is constructed to influence the UK after Brexit.  From what can be determined there’s a triggering mechanism where the UK and EU begin a lengthy process to construct a UK trade agreement with the EU after Brexit takes place.

Within that post-Brexit automatic trade-framework is where the European Union is seeking to retain their influence over the United Kingdom. However, it is not accurate to overlay EU influence too heavily, and here’s why….

Within the current framework there’s a customs union design similar to a Venn diagram, that consists of Northern Ireland remaining attached to EU tariff rules, and yet the UK is not subject to the same parameters.  So there’s three different sets of trade rules in place.

One set between the EU and Northern Ireland; one set between Northern Ireland and the UK; and one set between the EU and the UK.   All of this is designed to stop the UK from having independent trade wealth that is beyond the reach of the EU to control.

It’s complicated.

However, here’s the aspect you won’t find discussed.

Within the agreement as it appears the EU can, likely would, punish the UK for having more favorable trade agreements with other nations.  Meaning if the UK gives better deals to others than it does the EU, the EU will increase tariffs against the UK intended to punish the UK by restricting access to the EU market for UK products.   But that’s the limit of what the EU will be able to do….

Meaning, the EU cannot stop the UK from entering a trade deal with North America (think USMCA).  And there’s every visible likelihood President Trump is constructing a U.S.-U.K trade agreement with that in mind…. Meaning the U.K. will have preferential access to North America, and the USMCA countries (Mexico, U.S. and Canada) will in turn have preferential treatment in trade with the U.K.

This is important.  The EU will not be able to influence the U.S-U.K. trade agreement beyond imposing tariffs on Britain as punishment.  This is where the importance of Donald Trump comes in….  Trump can, I would say: likely will, give preferential treatment to exports from the U.K., so long as PM Boris Johnson is reciprocal toward the U.S.

Simultaneously, President Trump can hit the EU much harder than the EU can hit Great Britain.  If, say, the EU hits the UK with a 25% tariff as punishment for a better trade deal with the U.S. on any individual segment, Trump can hit the EU with a 25% tariff back on the EU.

The EU needs access to the $20 Trillion U.S. market much more than the EU needs access to the newly freed U.K. market.  Brexiteers should remember this.  President Trump and PM Johnson can work together to leverage this trade situation to both of their benefits.  The EU will want to keep selling their stuff into the U.K. (less important); but the EU *has to* keep selling their stuff into the U.S. (very important) in order to survive.

Trump and Johnson can work on a U.S-U.K. trade superhighway.   Our research already sees this construct in the discussions.  Simultaneously, Trump can pummel the EU with tariffs.  [Keep in mind the U.S. just won a WTO ruling for $7.5 billion a year in countervailing duties the EU cannot legally try and counteract.]

Combine the $7.5 billion WTO ruling with the potential for President Trump to hammer additional duties against the EU for adverse trade action within the Brexit customs authority, and what you see is an EU that can threaten action, but has limited recourse (just like China).

President Trump is itching to trigger more tariffs against the EU and looking for any economic excuse to do so.  Brexit provides just that excuse.

This is why, despite the flaws inherent within the UK-EU Brexit agreement, it would be in the best interests of the U.K. to vote in support of the current deal and get out.

Once out, President Trump can then provide trade incentives for EU products that come from the U.K. that do not come from the EU itself.   No U.S. tariffs on Great Britain, while Trump puts heavy U.S. tariffs on the EU.

The result of this process would push EU manufacturers and suppliers into the U.K. as a trade hub for access to North America, specifically the United States.  Simultaneously, EU companies wanting to avoid the U.S. tariffs against the EU could distribute their products through operations within the U.K.

As described this trade network provides PM Boris Johnson with the ability to pick and choose the EU entities that he would permit to operate in the U.K.  In essence, this provides Prime Minister Boris Johnson with leverage against the EU for “other issues” of importance.

It’s all about the economics.

Without money to finance their ideology, everything stops.

All of the above stated, this is another reason why Nancy Pelosi and the ideological leftists are trying to stall the USMCA. The North American Trade agreement is the trade fulcrum for a massive global economic reset.

The corporate multinational profit schemes to use China/Asia, and the political ideology behind the socialists/leftists that align with the EU (ie. “share the wealth”), are both weakened by a North American trade alliance, USMCA, that relocates the best return on international investment.

At the center of this realignment is “America First“.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.