Friday, February 5, 2021

BBC News - UK and EU in 'constructive discussions' over NI trade row

 


The government and the EU have vowed to "work intensively" to quell tensions over post-Brexit checks at Northern Ireland ports.

In a joint statement, both sides said talks on Wednesday with Northern Ireland leaders were "constructive".

The talks were arranged after checks at some ports were suspended following "sinister" threats made to staff.

UK and EU leaders say they condemn "unreservedly" any threats or intimidation.

Virtual talks between the Cabinet Office Minister Michael Gove, his EU counterpart, Vice-President Maros Šefčovič and Northern Ireland's leaders were held on Wednesday amid an escalating row over applying new trade rules for Northern Ireland.

The dispute has arisen because, under the Brexit agreement with the EU, some products entering Northern Ireland from Great Britain must be checked on entry.

That is because unlike the rest of the UK, Northern Ireland has remained in the single market for goods.

As a result, some food supplies and online shopping deliveries from Great Britain to Northern Ireland have been subject to delays and staff carrying out inspections have reported threats.

Tensions were also heightened when the EU threatened emergency controls of Covid vaccine exports on the Irish border - a move the bloc later withdrew.

'Priority'

In a joint statement, Mr Gove and Mr Šefčovič said they would "work intensively to find solutions to outstanding issues".

The UK government and EU Commission reiterated their full commitment to the Good Friday Agreement, and to the "proper implementation" of the Northern Ireland protocol.

Both leaders said they condemned unreservedly any threats or intimidation, and stressed that "the safety and welfare of the people of Northern Ireland" would always be the "utmost priority."

The BBC's political editor, Laura Kuenssberg, says sources told her "there wasn't much progress" but both sides have agreed to keep talking.

The source added that the EU wasn't in "sackcloth and ashes" after it temporarily suspended agreements made as part of the Brexit deal last Friday.

The UK government has called for temporary lighter enforcement of the rules to be extended until early 2023.

However writing in the Daily Telegraph, Northern Ireland's First Minister and DUP leader Arlene Foster warned that simply extending grace periods for businesses would not solve the problem.

She said the Northern Ireland Protocol - the arrangements for the Irish border - "cannot work" and must be replaced.

Deputy First Minister Michelle O'Neill, from Sinn Fein, called for calm heads and welcomed Mr Šefčovič's intended visit to the UK next week for further talks, saying it was a "very pragmatic and very constructive way" to move forward.



What is the NI protocol?

Part of the Brexit Withdrawal Agreement, the NI protocol guarantees an open border between the EU and Northern Ireland, with no controls on exported products.

It was introduced to avoid creating a hard border on the island of Ireland.

Instead there are checks on some products travelling from Great Britain to Northern Ireland.

This is because Northern Ireland in effect remains part of the EU single market for goods while the rest of the UK has left.

However, Article 16 of the protocol part of the deal allows the EU and UK to choose to suspend any aspects they consider are causing "economic, societal or environmental difficulties".

The EU announced it would trigger the clause to control exports of vaccines to Northern Ireland, but later reversed the decision.

Unionist parties in NI have been pressing the UK government to use Article 16 to reduce checks on goods entering Northern Ireland from Great Britain.


Thursday, February 4, 2021

Reuters News - Wall St rises as focus turns to stimulus, corporate earnings

 (Reuters) - Wall Street’s main indexes climbed on Thursday as investors looked to corporate earnings and signs of progress on a pandemic-relief package after data suggested the labor market was stabilizing.

The Labor Department’s report showed 779,000 Americans filed new applications for unemployment benefits last week, lower than 812,000 in the prior week, as authorities started to loosen pandemic-related restrictions on businesses.

The government’s closely watched and comprehensive monthly employment report, due on Friday, is also expected to show an addition of 50,000 jobs in January after a sharp drop in December.

Democrats in the Senate were poised on Thursday to take a first step toward President Joe Biden’s $1.9 trillion COVID-19 relief proposal, in a marathon “vote-a-rama” session aimed at overriding Republican opposition to the package.

“There’s a need out there still for fiscal relief for impacted workers, and it’s easier to get done when it’s viewed as a bridge to the other side of this pandemic,” said Matt Stucky, portfolio manager at Northwestern Mutual Wealth Management Co in Milwaukee.

“Vaccine deployments are accelerating and earnings are coming in much better than expected. While there’s still a lot of uncertainty out there, those more positive themes are probably reassuring investors.”

Nine of the 11 major S&P sectors advanced with financial, industrials and technology gaining the most.

All the three major indexes have bounced back sharply this week as investors monitored talks over the next round of fiscal stimulus and as a recent buying frenzy driven by social media appeared to stall following a bout of market volatility last week.

Videogame retailer GameStop Corp fell 26.5%, while cinema operator AMC Entertainment Holdings Inc slipped 13.2% as Treasury Secretary Janet Yellen said that she and financial market regulators needed to “understand deeply” what happened in the recent retail trading frenzy before taking any action.

However, concerns over heightened stock market valuations, raging pandemic and new coronavirus variants have kept investors on edge with attention turning towards earnings outlook from corporate America to justify it.

S&P 500 companies are on track to post earnings growth for the fourth quarter of 2020, Refinitiv data showed on Wednesday, which would defy expectations for profits to drop 10% due to the pandemic.

At 12:10 p.m. ET, the Dow Jones Industrial Average was up 259.01 points, or 0.84%, at 30,982.61, the S&P 500 was up 28.52 points, or 0.74%, at 3,858.69, and the Nasdaq Composite was up 101.81 points, or 0.75%, at 13,712.35.

A pandemic-driven surge in online shopping during the holiday season helped e-commerce firm eBay Inc and payment platform PayPal Holdings Inc top quarterly earnings estimates. EBay and PayPal both jumped 5.4%.

Advancing issues outnumbered decliners 1.95-to-1 on the NYSE and 2.57-to-1 on the Nasdaq.

The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 198 new highs and two new lows.

Reporting by Devik Jain in Bengaluru; Editing by Maju Samuel

Wednesday, February 3, 2021

BBC News - UK applying to join Asia-Pacific free trade pact CPTPP

 The UK will apply to join a free trade area with 11 Asia and Pacific nations on Monday, a year after it officially left the EU.

Joining the group of "fast-growing nations" will boost UK exports, the government says.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership - or CPTPP - covers a market of around 500 million people.

But they are harder to reach than neighbouring markets in Europe.

Members include Australia, Canada, Japan and New Zealand.

Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam are also founder members of the bloc, which was established in 2018.

"In future it's going to be Asia-Pacific countries in particular where the big markets are, where growing middle-class markets are, for British products," International Trade Secretary Liz Truss told the BBC's Andrew Marr.

"Of course British businesses will have to reach out and take these opportunities, but what I'm doing is I'm creating the opportunities, the low tariffs, removing those barriers so they can go out and do that."

Joining the bloc would reduce tariffs on UK exports such as whisky and cars, as well as service industries, she said.

However the immediate impact is likely to be modest as the UK already has free trade deals in place with several CPTPP members, some of which were rolled over from its EU membership. The UK is negotiating deals with Australia and New Zealand.

In total, CPTPP nations accounted for 8.4% of UK exports in 2019, roughly the same proportion as Germany alone.

The US was originally in talks to be part of the CPTPP, but former President Donald Trump pulled out when he took office.

If the new administration in Washington were to reconsider the CPTPP, that would make membership much more attractive to the UK. It could allow a much closer UK-US trading relationship, without waiting for a bilateral trade deal to be negotiated.


Analysis box by Dharshini David, global trade correspondent

Exactly a year after it said goodbye to the EU, the UK is eying a new trading club.

It sounds a win-win: those Pacific Rim nations represent 13% of global income and 500 million people - and the UK would retain the freedom to strike deals elsewhere. There'd be agreement on how standards and regulations are set (with minimums to be adhered to) - but they wouldn't need to be identical.

In practice, however, the short-terms gains for households and business would be limited. The UK already has trade deals with seven of the 11 nations - and is pursuing two more. In total, CPTPP nations account for less than 10% of UK exports, a fraction of what goes to the EU.

This deal would however deepen some of those ties - and allow UK manufacturers who source components from multiple nations in the bloc some benefits under "rules of origins" allowances.

But the real boost could come in the future, if others join - in particular the US, as President Biden has hinted. That would give the UK that hoped-for trade deal with America - within a trading bloc wielding considerable power on the global stage.


The UK is the first non-founding country to apply to join the CPTPP and, if successful, would be its second biggest economy after Japan.

The free trade block aims to reduce trade tariffs - a form of border tax - between member countries.

It includes a promise to eliminate or reduce 95% of import charges- although some of these charges are kept to protect some home-made products, for example Japan's rice and Canada's dairy industry.

In return, countries must cooperate on regulations, such as food standards. However, these standards and regulations do not have to be identical, and member countries can strike their own trade deals.

The government was putting place strategies that would "deliver for Britain in 2030 and 2050", Ms Truss said. She said services, robotics, data and digital industries were particularly set to gain, which could lead to more UK jobs.

Membership will also offer the potential for faster and cheaper visas for business people, the government said.

The formal request to join will be made on Monday, with negotiations expected in the spring.

Tuesday, February 2, 2021

Bloomberg News - Global Tech Tax Is Expected to Arrive This Summer

 Hey all, it’s Natalia. Tech giants including Alphabet Inc., Apple Inc. and Facebook Inc. could soon be hit with higher taxes around the world after global talks moved closer to an agreement.

Clashes between the European Union and Trump administration had hobbled progress over who outside of the U.S. gets to tax American tech companies, but President Joe Biden’s Treasury secretary pick, Janet Yellen, last week injected renewed optimism for a global deal.

After a call with Yellen, German Finance Minister Olaf Scholz said the Biden administration was showing a readiness to clinch an agreement. “I’m very confident we will be able to do it,” he said last Thursday. The Organization for Economic Cooperation and Development is brokering the discussions among nearly 140 countries and intends to settle them by the summer.

For years, Europe and the U.S. have chafed over where tech companies owe their taxes. In one legal case, the EU wants to overturn Apple’s victory in a 13 billion euro ($15.7 billion) tax dispute, arguing the iPhone maker owes that money to Ireland, not the U.S. A top EU court last July sided with Apple.

Europe wants to overhaul the traditional way of taxing internet companies by imposing levies on revenue, not profit. Officials want a slice of the value U.S.-based companies create in Europe through targeted advertising, the sale of data or other services.

Officials in Washington had pushed back on the efforts, arguing they unfairly target American companies. When global talks previously faltered, many countries in Europe pressed ahead with their own taxes anyway. France late last year started charging companies a 3% levy on digital revenue, prompting threats from the Trump administration to impose tariffs on $1.3 billion of French goods. The U.S. also called out Austria, Italy, Spain and the U.K., accusing them of discriminating against American companies with their tech tax plans.

The EU is moving forward on its own plans for a bloc-wide tech tax this summer, in the event the OECD effort doesn’t yield an agreement. Digital businesses are largely benefiting from the pandemic while many economies are under strain, and the EU wants its new tax to help fund recovery efforts.

Some executives have come around to the idea of a global deal, which could potentially cause less financial damage than a patchwork of different regulations. Facebook Chief Executive Officer Mark Zuckerberg last year said he supported the idea, even if it meant the company may have to pay more in taxes and to different jurisdictions.

Still, consumers and smaller businesses, not tech giants, could face the brunt of any new digital tax plans. Apple has already said it'll raise prices of software and in-app purchases to offset Turkey’s digital tax and adjust proceeds for developers in Britain, France and Italy.

Just how much is on the line for these companies will be made clearer on Tuesday, when Alphabet and Amazon.com Inc. report earnings for the holiday quarter.Natalia Drozdiak

If you read one thing

The big winners of the Reddit-fueled stock rally grapple with an important question: Sell or “hold the line?” The returns could be life-changing, but abandoning the stock feels to some like a betrayal of the cause. “Hedge funds and the market movers are betting on us pulling out,” said one Reddit user.

And here’s what you need to know in global technology news

Elon Musk’s appearance on the app Clubhouse was all over the place. He talked about wiring a monkey’s brain to play video games, grilled Robinhood’s CEO about the ongoing trading controversy and declared his love of memes.

Google shut down its in-house game development arm. The move illustrates the difficulties big tech companies are experiencing when trying to break into the video game business. Meanwhile, Nintendo posted its best quarter since 2008.

Amazon is dialing up pressure on workers in Alabama to discourage them from unionizing. Employees were ordered to attend meetings where managers sowed doubts about the unionization push, said two people who attended.

Hackers who breached the U.S. federal court system using the SolarWinds exploit probably gained access to confidential information, including trade secrets and whistleblower reports, the Associated Press reported.

Monday, February 1, 2021

BBC News - Firms call for details of post lockdown reopening so they can plan

 Business leaders have called on the government to work with them on a roadmap out of lockdown to unlock investment for a post-Covid recovery.

In a letter to Business Secretary Kwasi Kwarteng, the Confederation of British Industry says the time to plan for re-opening the economy in England is now.

Firms are "in the dark" about planning for the months ahead, the employers' group said.

A government spokesperson said lockdown would be lifted as soon as possible.

But the CBI, which speaks on behalf of about 190,000 businesses, said there is an opportunity to "use time wisely" to prepare for a safe re-opening of the economy.

In a letter to Mr Kwarteng, CBI director-general Tony Danker, writes: "With health teams rightly in crisis management mode, we in business along with the economic ministries can use this time to plan for a successful re-opening of the economy when the moment is right to do so.

"Businesses are currently completely in the dark when planning for the weeks and months ahead and this is hindering investment. We can provide more clarity and do the prep work now to enable them to plan for reopening and growth."

Mr Danker will also be writing to the devolved nations' governments next week.

The CBI calls for clarification on what will be considered low, medium or high-risk economic activity, so that businesses can understand what will open sooner or later.

Mr Danker also wants to know whether or not there will be a return to tiering, as part of a gradual re-opening.

He also wants the creation of bespoke, detailed plans for the harder-to-open sectors of the economy, such as testing regimes for international travel, or the conditions for activities such as hospitality and live events to return.


Mr Danker says in the letter: "The Prime Minister has set out the initial parameters for reopening as a country, which was a big help for businesses. Clearly, the precise dates will be determined by data, so let's use this time wisely to get the roadmap right together for when lockdown ends.

"A common framework with devolved administrations must also be possible and help to minimise differences in approach."

Job protection

Chancellor Rishi Sunak is working on a recovery plan, expected to be published ahead of next month's Budget. That plan will, according to reports, focus on jobs and investment.

A government spokesperson said: "As the prime minister has made clear, we will lift restrictions as soon as we can, but by lifting them too soon we run the risk of placing our NHS under even greater pressure and having to re-impose restrictions at a later date."

The spokesperson pointed out that the government had invested more than £280bn during the pandemic to protect jobs and businesses, adding: "By mid-February we will be in a better position to lay out the next steps for the economy without risking renewed pressure on our NHS."