The bumpy road to the global UK


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Hello Brussels, and welcome to the penultimate issue of Trade Secrets in 2021. The last issue will be on Monday, when we will summarize the year, and then we will come back in January, change the format, and even if you can imagine, more licenses have strong opinions. Today’s main content is about the first full year of Britain’s truly independent trade policy. The result is not necessarily what many people (including us) have assumed.

Concession waters There are statistics on how the world’s semiconductor manufacturers actually increased production during the pandemic, even though all are talking about shortages.

We hope to hear from you.Send any ideas to [email protected] Or email me [email protected]

Diplomatic skills but minister quirks

It’s almost a full year since “Trade Secrets” Expected (And subsequently proved to be correct in our generally accepted biased judgment) Britain’s annual surrender in trade negotiations with the European Union is approaching. 2018 is make out There is no middle way between single market membership and bilateral trade agreements; in 2019 it is accept Customs border in the Irish Sea; it will be in 2020 Give way to Regarding the issue of a “level playing field” that restricts trade-distorting behavior.

And this year?Well, the UK seems retreat No one from the island of Ireland may recognize the existence of the European Court of Justice, lest they be exiled to exile or other positions. It gave the French a fishing permit that it said it would not.The facts a senior British official told EU media reporters one thing Then Downing Street quickly rebutted it convincingly, which is roughly the same process as the Brexit deal: not only a retreat, but a disorderly retreat.

In other news of trade surrender, the United Kingdom Australia and new Zealand The negotiators obtained almost all the agricultural market access they requested.An attack in Australia met with more British resistance The first ashes test Last week, this said something.

Britain claims to combine foreign policy with trade, which is not a good start either.As our distinguished Financial Times colleagues discovered, the Biden administration has Make a deal The tariffs on steel and aluminum in the Trump era until Britain got worse on Northern Ireland (our description, not the government’s description).

So, is Global Britain a bit of a joke? Does the government just follow the route of least resistance to give the impression of activity? Kind of, but not quite.

First of all, British civil servants and diplomatic operations seem to be working well-remember International Trade DepartmentThe Cabinet Office that deals with bilateral and regional trade agreements and World Trade Organization issues is different from the Cabinet Office responsible for relations with the EU after Brexit.

It is true that the arrogance of ministers overlaid on this is usually stupid.One claim The UK “helped to facilitate” a fairly small-scale transaction on WTO services regulation, which was news to most observers of the trade agency.And one speech This week’s junior trade minister’s comparison of Brexit with the U.S. Declaration of Independence is simply embarrassing. But, for example, the general significance of Geneva is that Britain’s participation in the WTO is convincing, and despite its relatively small scale, it has little direct impact.

It remains to be seen how the United Kingdom will perform in its application to join the Comprehensive Progressive Agreement for Trans-Pacific Partnership (CPTPP). The members of the agreement will receive the least economic benefit to the United Kingdom under any circumstances.But it shows some organizations and determination to bid together, a move largely due to Crawford FalconThe veteran New Zealand trade official is now the chief negotiator for the UK.In other “small but not invisible comforts of leaving the EU” news, the UK can also take a more constructive stance on solving the problem. Numbers and data issues In the trade agreement.

However, as far as our money is concerned, the most compelling thing the UK has done-which is not what we expect-is to overthrow the UK Agriculture Hall Complete the agreement between Australia and New Zealand.British speed Give way In the negotiation, it is a failure in the sense of mercantilism. But what is impressive is that, in a somewhat nihilistic way, the Conservative Party, which has supported agricultural protectionism for centuries, is ready to let its farmers reach their goals.

British communications after Brexit

Learn about the latest developments after Brexit through original insights provided weekly by our public policy editor Peter Foster and senior writers from the Financial Times. Register here.

It is true that Liz Truss, who was then Minister of Trade (now promoted to Minister of Foreign Affairs), was not widely praised for his sophisticated ideological vision, and the suddenness of the decision does not indicate (malicious expression) ) Systematic and predictable model management of “stakeholders”. However, whether you think this is a good idea or not, you must admit that for a conservative secretary of state, especially a secretary of state representing a large number of rural constituencies, The removal of agricultural tariffs on the two most efficient agricultural exporters in the world is a rather bold move.

Can the government withstand a similar political boom in Northern Ireland and ease the situation through a full retreat?We are totally amateur in judging this point, but the ministers have already attacked the unionists twice, so if they feel cautious about doing so for the third time, it would be surprising, especially since the EU has already provided some discount Solve the problem. They need to continue to provoke the fight against the European Union to divert the attention of British voters and stay away from the chaos elsewhere, which may last longer.

The bottom line is this. In terms of trade policy, the UK has a competent civil service and a somewhat eccentric but not ineffective ministerial leadership. Paradoxically, the thing that should give it more credibility now is to retreat from Northern Ireland’s untenable position, thereby providing further evidence that it is not a prisoner of a domestic constituency. But this seems to be the kind of coherent strategic thinking that has not yet emerged.

Concession waters

The speeches and research of Hyun Song Shin, head of the research department of the Bank for International Settlements are always worth reading. His latest No exception.As Martin Sandbu said In this column, Shin put forward a compelling case, that is, manufacturers have begun to deal with the challenge of high demand for their products.

This is a theme that we mentioned many times in “Trade Secrets” this year. We think ordinary readers will like this compelling chart on the dynamics of the semiconductor chip market. As you can see, chip manufacturers have already taken a lot of additional pressure and have increased their sales significantly.

The line chart of semiconductor sales (billions of dollars) shows that chip makers have responded to the surge in demand during the pandemic

We are not as convinced as Martin that capitalism and globalization have had an alarming epidemic, but we do believe that the world’s chip and many other product manufacturers whose demand has surged deserve recognition. Claire Jones

After the severe shortage, can the world see soon Semiconductor chip excess?Chip manufacturers are investing billions of dollars to expand capacity, but Nikkei Report (Nikkei, $) Analysts say the industry’s Periodic This means that the global semiconductor shortage will inevitably give way to overproduction of chips.Meanwhile, Joe Miller head arrive ‘Silicon Saxony’ Talk to people in Europe’s busiest chip manufacturing area.This Indian government have Officially recognized (Nikkei, $) Incentives worth 9.94 billion U.S. dollars stimulate local semiconductor and display panel manufacturing, posing challenges to China, Thailand, Indonesia and Vietnam.

Epidemic related Mask production And government support promote Troubled French textile industry But it did not create many job opportunities.

Citi made one Harvest report about it Will need to normalize the supply chain.

This China intimidates Lithuania Underscore The opaque nature of Beijing’s mandatory economic governance. Francis Carregalado and Allen Beatty

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