Wednesday, November 22, 2017

The pros & cons of the electric vehicle's future

Pictured: A Renault Twizy, a Renault Zoe and a UK charging point

The war on petrol and diesel cars has been simmering for some time. Diesel vehicles in particular have been singled out with some cities around the world restricting their use.

But whilst few would argue that vehicles running on petrol or diesel are polluting, the electric vehicle alternative has yet to tick all the boxes as far as those wanting to buy a new car.

The biggest issue for many is the range of the vehicle and the perceived inconvenience of charging up their vehicle. Technology is certainly improving and some electric vehicles, or EVs, can cover more than 400 km. But there are still many drawbacks. 

Drawbacks & cost

The first major issue for many people is one of initial cost. There are very few second hand electric vehicles on the market and thus the only real option is to buy new.

The Renault Twizy [pictured above] is probably not what most people envisage themselves driving in. While it is certainly nicely designed it only has capacity to carry two people, and the passenger will find themselves rather squashed behind the driver. The vehicle has a range of 100 km though this can drop to around half in some conditions. With a top speed of 80 km/h [50 mph] the vehicle is perhaps best suited to urban driving though the cost, ranging from £6,990 to £7,400 is likely to put off many [Renault].

Due to the very small luggage space the vehicle certainly wouldn't be much good for to take a weekend or summer break unless one is travelling very light indeed. In fact there's no boot to speak of. Instead a 31-litre lockable storage cubby exists under the rear seat that's large enough to carry some small bags, a laptop or a modest amount of shopping.

Another off-putting factor is the fact the price does not include the battery pack. Instead owners have to lease the battery from Renault for a £45 monthly fee, although it does include roadside assistance and a battery replacement guarantee.

Perhaps a more practical EV is the Renault Zoe [picture above] which retails at £18,045 up to £23,645, although currently UK buyers get a so-call Plug-in Car Grant or PiCG which reduces the cost.

However, the PiCG which gives buyers up to £4,500 towards the cleanest new cars, will only run until March 2018 [Guardian].

The Zoe has a range of over 210 km [130 miles] but like Twizy owners, one still has to lease the battery which costs between £49 and £110 per month depending on the length of the agreement and annual mileage [Top 5 EVs].

Inconvenience

Recharging takes 3 to 4 hours which could prove inconvenient for long journeys. In fact aside the issues of cost and leasing batteries, charging times and range is the crucial issue for most people.

Short hops around town is not an issue. It's those journeys to the airport or the weekend trip to the coast or the drive to France on a camping trek which create the challenges.

From one side of London to the other via the M25 is around 100 km [60 miles]. So a return trip from the Essex border to Heathrow Airport could be achieved in a Renault Zoe with 16 km [10 miles] to spare. But ideally one would really want to top up before that return journey.

There are only 4 electric car charging points available at Heathrow Airport Terminal 5 Short Stay Car Park and herein lies another issue. There are some compatibility issues, but the biggest issue here is numbers. If there is no free space one could very well be left stranded on the M25 without juice. Given there are only 4 charging points, finding them might also prove to be a challenge.

There is also the cost. While charging is often free, or very cheap, parking at Heathrow for 2 or 3 hours in order to charge up one's car would likely set one back around £14.

Costs and benefits

That said, £14 is considerably cheaper than the cost of petrol or diesel which would have been burned up in a conventional vehicle.

Currently there is no VED [Vehicle Excise Duty] payable on pure EVs worth less than £40,000. So that's a potential saving of anything up to £300 a year.

But of course even EV owners have to pay out for an MoT and insurance and withe monthly cost of battery easing with many EVs the running cost per year can easily soar towards £1,000 before driving anywhere.

This cost is similar for most vehicle owners however. But unlike conventional car owners, EV drivers do get some perks. Many areas offer discounted parking, such as Westminster in central London where EV drivers need only pay for just 10 minutes on street pay-to-park bays and park for the maximum prescribed period. In some areas a free resident's parking permit for residents is offered for owners of an eco or electric vehicle. And EV drivers do not have to pay London's congestion charge.

An EV for everyone

So there are some advantages and disadvantages. And there is an EV for pretty much for everyone.

There is the tiny Twizy which is great as a little city runabout. There is the Renault Zoe and the arguably better Nissan Leaf which both offer comfort and space, and could be considered small family cars.

And there are even electric SUVs in the pipeline in the coming years [Business Insider / Autocar]. 

Currently there are few electric SUVs, but the Kia Soul EV is certainly a vehicle that makes the idea of driving an electric vehicle a little more cool. However with a range of only 150 km [93 miles] in optimum conditions there are serious issues to be considered as regards charging.

Charging & Range

Indeed, it is charging that is the biggest problem when it comes to EVs. Whether a vehicle has a 600 km range or a 150 km range there needs to be an improved infrastructure, not just across Britain but across Europe and around the globe.

Not everyone wants or can afford a second vehicle. So in order to persuade new car buyers to buy an all electric vehicle the infrastructure needs to improve.

Payment issues

Whilst there are many charging points across the country not all are rapid chargers. Some are free, some require registration and others require payment through an app or via an online account. So without preplanning one can encounter issues concerning payment even before plugging in. In fact this, and non-working machines, is perhaps one of the biggest problems [YouTube].

Anyone with a regular gas guzzler can drive into a service station, fill up and pay with cash, debit or credit card, or even Apple or Android Pay in many UK locations. But for many EV charging stations one has register, purchase special cards and top-up online.

The issue could be solved simply giving users the option to pay with a debit or credit card with perhaps the offer of benefits to those who sign-up to the specific scheme.

Plug compatibility & Infrastructure

Then there's plug compatibility though for the most part this is not really a major issue since most charging stations offer the two main types [YouTube / EVObsession].

For those with the extra cash for a second vehicle an EV is definitely the way to go. But for a primary vehicle there are, at present, too many drawbacks.

Fast charging stations need to be at every petrol station, supermarket and town centre car parks as well as on-street parking locations. And this roll out needs to be Europe wide.

A London to Bournemouth trip might be feasible at present, but it would be a brave soul attempting a European tour with an EV.

While there are some EV charging stations dotted across France, they are few and far between. The same is true of Spain and Portugal where one can easily find oneself travelling for hundreds of kilometres without seeing even a petrol station let alone an electric charging station [Charging points map]

A greener future

Today the Chancellor of the Exchequer announced new efforts to clean up the air with further  measures targeting diesel vehicles whilst putting forward financial incentives and pledges to build an increased EV charging infrastructure with a promised £400 million fund [Business Green / Huffington Post].

But there are two major challenges that have yet to be properly addressed when it comes to electric vehicles. The first is the drain on the national grid as more people adopt the new technology.

Electric vehicles are here; and they are here to stay.  But by 2050 there could be anything from 7 to 26 million on the road. And the National Grid in the UK has already questioned whether it will be able to cope with demand [National Grid PDF / Guardian]  

The grid recently warned that, by 2030, electric cars could require 3.5-8GW of additional capacity, on top of the current peak demand of 60GW [Guardian].

When the lithium runs out

But there's another perhaps far more pressing issue, and that concerns the battery that powers the vehicle itself.

Currently most EVs use Lithium Ion batteries. However, there are only finite Lithium resources.

It has been estimated that should EVs really take off there is only enough lithium to supply the market for around 17 years.

Back in 2015 the US Geological Survey produced a reserves estimate of lithium which concluded that the world has enough known reserves for about 365 years of current global production of about 37,000 tonnes per year [USGS PDF]. 

But of course, that did not take into account possible future use [Green Tech Media / Bloomberg].

There is a revolution taking place already in that many people are beginning to accept the new technology. No longer are are electric vehicles geeky, the Twizy perhaps being only one exception. The range is improving and along with it the charging station infrastructure, if a little slowly. But there needs to be a another revolution in battery technology otherwise the the electric car will soon come to a grinding halt [Guardian].

tvnewswatch, London, UK

Saturday, November 18, 2017

After microbeads is it time to ban glitter & straws?

This week it was reported that a nursery in the UK had banned glitter - on environmental grounds. While glitter is only a small part of the microplastic load getting into watercourses and the sea, such efforts have surely to be commended.

There is far too much wastefulness in our modern life, and Christmas doubly so. A small step has been made in banning microbeads or persuading manufacturers to stop using them. But there are far too many non-biodegradable and readily disposable items used in our everyday lives.

Glitter is not necessary to make Christmas a joy. Furthermore it is potentially dangerous should it be ingested and especially if it gets in one's eyes. It also creates a mess which makes for constant vacuum cleaning. And of course there are environmental considerations.

Tops Day Nurseries - a chain of 19 day care centres across southern England - is outlawing the sparkly substance [BBC / Sky News / Guardian]. That's highly commendable. But today I, like I'm sure many parents did, received a leaflet from my child's school directly encouraging pupils use glitter and tinsel in some decorations they've requested the children design and make for Christmas.

This is proof that while the message gets through to some that some things are bad for the environment, not everyone takes notice or is even aware.

Thus it is surely up to government and industry to find natural, biodegradable and safe alternatives and ban materials and methods that are harmful to our planet. Some have already called for a ban of all glitter and other microplastics. "I think all glitter should be banned, because it's microplastic," says Dr Trisia Farrelly, an environmental anthropologist at Massey University [Independent].

Most glitter is made of aluminium and a plastic called PET.  Dr Farrelly has investigated how PET can break down to release chemicals that disrupt hormones in the bodies of animals and humans. Such chemicals have been linked with the onset of cancers and neurological diseases.

Some eight million tonnes of waste plastic ends up in the sea each year and while only an estimated 86 tonnes of microplastics are released into the environment every year in the UK alone, every effort to reduce such waste helps.

Plastic straws are another problem which is only now being addressed. Over 500 million plastic straws are produced in the US alone every single day, only to be used for a few minutes before being thrown in the bin or littered. But slowly there is an effort to reduce this waste too.

Cornwall could become the first county in Britain to ban plastic straws in an attempt to protect its coastline according to recent reports [Independent]. And the pub chain Wetherspoons is to only hand out plastic straws if requested with a complete ban from January 2018 when they will make the switch to biodegradable paper straws instead [Sun / Independent].

Many of us can make our own decisions and act. But sometimes the choices are forced upon us. Unnecessary supermarket packaging for fruit and vegetables is a case in point.

The consumer can only do so much. While few of us like an interfering nanny state, it is only by implementing bans on these environmentally damaging substances, packaging and products that real change will be made.

The chancellor, Philip Hammond, is set to announce possible taxes on single use plastics [Guardian].  However, such measures are only likely to lead to increased pricing of products which will be passed on to consumers. What is really needed is a total ban on such use.

tvnewswatch, London, UK

Friday, November 10, 2017

Brexit turning into a Fawlty Towers farce

For many looking on at the farcical Brexit negotiations and surrounding chaos that appears to developing since the EU referendum it is more akin to a sitcom than a serious attempt to take back control and build a better Britain.

Indeed the whole fiasco has come to have stark similarities of the infamous sitcom Fawlty Towers.

Theresa May is much like the beleaguered wife of Basil Fawlty, trying to keep things in order whilst those around her become embroiled in one fiasco after another.

The bumbling Foreign Secretary is surely not too far removed from the Major and Basil rolled into one as he makes inappropriate remarks and insults.

Life imitated art earlier in the year when Johnson urged the French president not to "administer punishment beatings" on Britain for choosing to escape the EU "rather in the manner of some World War Two movie" [BBC]. This was very much like Basil Fawlty's faux pas when he kept making inappropriate references to the war to some German guests while late claiming that he might have "got away with it.

Johnson, just like Basil Fawlty, hasn't confined his comments to one group of foreigners, though he hasn't yet begun to lash out at Spanish waiters and tell them they are a "waste of space".

Many are bewildered why Britons should have voted Brexit at all and wrench themselves from one of the world's biggest trading blocks. Foreigners, not only in Europe but around the globe are puzzled why Britain would go through such painful negotiations and create such uncertainty for its own manufacturing industry as well as those who might wish to invest in Britain.

The same puzzlement is reflected in Fawlty Towers as a psychiatrist staying at the hotel exclaims that there existed "enough material for a whole conference" given the farcical events taking place.

It is perhaps no wonder that outside Britain's walls media commentators are making similar analogies.

The New York Times columnist Steven Erlanger recently said that no one knows what Britain was anymore and that it had become nearly unrecognizable to its European allies.

The party led by May has itself become more and more shambolic by the month [Reuters]. After staggering through a disastrous and unnecesssary election May has had to make deals with DUP to prop up her minority government. The Tory party conference was itself a comedy of errors as a comedian delivered a fake P45, May spluttered and coughed through her speech and letters fell off the backdrop display, a reminder once again of Fawlty Towers where the sign at the hotel entrance is displayed with missing or rearranged letters.

"Like the sign outside Fawlty Towers, the missing letters behind Theresa May are an emblem of a tragicomic farce. Who needs Basil's hotel? We now have the Tory Party," The Sun said in an editorial.

Some months ago Boris Johnson was ridiculed after he exclaimed that Brexit would "be a Titanic success", an unfortunate comparison given the fate of the ocean going liner.

The boat analogies have not gone away however. In his article published in early November 2017, Erlanger described Britain as being like "a modest-size ship on the global ocean" heading towards uncharted territory if not the rocks.

The ship, Erlanger suggests is "unmoored, heading to nowhere, while on deck, fire has broken out and the captain — poor Theresa May — is lashed to the mast, without the authority to decide whether to turn to port or to starboard, let alone do what one imagines she knows would be best, which is to turn around and head back to shore."

But making such a U-turn would, many claim, be undemocratic and betray the will of the people.

In one episode of Fawlty Towers Basil makes a disastrous mistake in telling some guests to leave after misconstruing things he overheard. On informing his wife Sybil. "Oh my God," Basil exclaims, "What have I done" before asking what am I going to do?"

"Tell them you've made a mistake," Sybil suggests. "Oh, brilliant! Brilliant. Is that what made Britain great?" Basil retorts, before storming up to the guests to apologize, but blaming the fiasco on his wife.

The line "Is that what made Britain great?" reflects very much attitudes that still prevail in Britain today. Many people still have difficulty in forgetting the glory days when Britain traded internationally across an empire over which "the sun never set".

The colonialist Britain is very much in the past and Britain's relevance is not as significant in today's globalised world [SMH].

In fact rather than a vote for a global Britain and economic liberalism, Brexit was a vote for protectionism, and its political system nowis deeply provincial and introverted at a time when Britain is supposed to be heading out into the world.

The architect of Article 50, Lord Kerr, has declared that the letter can be torn up at any point until 29th March 2017 [Guardian].

Despite concerns Britain is heading for a no deal scenario the Theresa May seems adamant that the Good Ship Brexit is on the right course.

Johnson for his part seems just as unlikely to turn around and say he's made a mistake. His recent blunder with facts that landed a woman held by Iran in even hotter water seems to indicate that whatever the evidence May, Johnson and the Tory government are unlikely to change course [Guardian].

Only when the ship is dashed against the rocks will the people and politicians perhaps realise their folly. But unlike Fawlty Towers no one will be laughing as the end credits roll.

tvnewswatch, London, UK

Wednesday, October 18, 2017

Xi Jinping's 33 year plan for China's future

In a speech that ran for more than three hours China's President Xi Jinping has said the country has entered a "new era" where it should "take centre stage in the world" [BBC].

In a wide ranging speech, Xi declared victory over "many difficult, long overdue problems" since he took power in 2012 and that China would continue opening its doors to foreign businesses, defend against systemic risks, deepen state-run enterprise reform, strengthen financial sector regulation and better coordinate fiscal and monetary policy.

Communist Party Congress conferences take place every five years and are known for their long speeches, declarations of future plans for the country and a platform to set out party priorities. And this party conference was no different. 

Xi Jinping spoke for 3 hours and 20 minutes, reading from a tome entitled, "Secure a decisive victory in building a moderately prosperous society in all respects and strive for the great success of socialism with Chinese characteristics for a new era"

He spoke of a China dream and a "new era" for China, a phrase repeated no less than 36 times. This was also a platform to declare Xi Jinping's success in tackling corruption and of preparing the way to make China great.

Indeed some media commentators were likening many messages coming from the 19th CPC as being very similar to those of Donald Trump.

At the Tory party conference Theresa May borrowed from America as she talked about a "British Dream". And Xi appeared also appeared to be using similar language with references to a "Chinese Dream" [Bloomberg]. 

Unlike Theresa May, the Chinese president managed to get through his 210 minute address without coughing, being accosted by pranksters or having the props disintegrating about him.

After all, this was, as Xi declared, a "great modern socialist country" which within the next 30 years would become a "beautiful China". In short Xi seemed to be flying the banner espousing the slogan "Make China Great Again" [Guardian].

But this conference was also seen as one which helps to lay the groundwork to secure power for much longer than the usual 10 year period.

After five years defeating political rivals, silencing critics and developing public support built on rejuvenation and fighting graft, Mr Xi is on firm ground to oversee a major reshuffle of China's leadership stacked with those loyal to him [Telegraph].

As recently as April 2016 western commentators were already discussing the so-called 'Cult of Xi' and suggesting he was attempting to establish himself as the the next Mao Zedong [Economist].

State controlled media is often filled with fawning over "Uncle Xi" and his wife, Peng Liyuan, a folk-singer whom flatterers call "Mama Peng".

Xi Jinping has accumulated more authority than any of his predecessors since Mao Zedong, the founder of the communist People's Republic of China. Xi has taken personal control of policy making on everything from the economy, national security and foreign affairs to the Internet, the environment and maritime disputes. Now the 62-year-old scion of Chinese Communist Party [CCP] royalty stands at the centre of a personality cult not seen in the People's Republic since the days when frenzied Red Guards cheered Chairman Mao's launch of the Cultural Revolution.

Xi repeats the mantra of Mao and rails against "hostile foreign forces" which he and hard liners within the party believe are intent on weakening a resurgent China.

"Like Mao, Xi thinks if China succumbs to Western values, these forces will destroy not only China's exceptionalism but also the stability of the Chinese Communist Party," says Roderick MacFarquhar, a Harvard expert on Chinese politics [Time].

Whilst Xi certainly appears to be establishing himself as an autocratic ruler, he does nonetheless appear far more stable than his western counterparts.

Xi has sought to portray himself as a strong and stable international statesman. And he is far stronger and clearly more stable than a certain British prime minister who ran her election campaign under that very slogan [Guardian].

Since last year's election of Donald Trump. Xi has also painted China as a far more responsible global power that is committed to tackling shared dangers such as climate change.

Indeed, whilst Trump seems intent on turning the clock back half a century and restart the American coal industry, Xi's China it accelerating towards a green future with significant plans to be more reliant on renewable energy [Guardian / CNN / Washington Post].

Xi certainly isn't popular with everyone in his home country. Xi's crackdowns have divided opinion and his firm grip on power brings retorts of 'fascist' from some who are brave enough to express their views. Most of his critics come from the ranks of liberal intellectuals and human rights activists who claim Xi's first term has proved calamitous.

Some had hoped he would prove a political reformer. Instead China's authoritarian leader has waged war on dissent with unexpected ferocity, throwing some opponents in jail and forcing others overseas. Some even refer to him as "Xitler" [Guardian].

However, some experts say that many of China's 1.4 billion citizens see Xi Jinping in a far more favourable light.

"Whatever people may have to say about Xi Jinping, he has actually been a popular leader," said Steve Tsang, head of the China Institute at the School of Oriental and African Studies in London. "The economy remains strong … corruption has been contained … China is internationally much more accepted as being in the top league and is calling the shots … In Trumpian terms, he's managed to make China look great again." [Bloomberg]

Most western media reports have focused on Xi's plans for the economy, energy and the  environment. However, China is also trying to improve its military standing.

It is "time to take centre stage" Xi declared. And his vision is one where China can defend itself against military threats.

"We must build a powerful and modernised army, navy, air force, rocket force, and strategic support force; develop strong and efficient joint operations commanding institutions for theatre commands; and create a modern combat system with distinctive Chinese characteristics," Xi told the hundreds of CCP members who had gathered in the Great all of the People in Beijing [SCMP].

With many believing Xi is poised to seize "absolute power", it is perhaps no wonder the world is watching China [ABCWashington Post].

tvnewswatch, London, UK

Saturday, October 14, 2017

UK risks going over the cliff edge with WTO option

There has been much discussion in the last week over where the Brexit talks are going with some espousing the view that Britain should prepare for a so-called "no deal" option.

The no-deal option has been described as a hard Brexit or a WTO option. It is perceived to be by many Brexiteers as an easy option and that Britain could simply fall back on WTO rules when it comes to trade.

But falling back on WTO regulations and tariffs is not as simple as many might think.

What is the WTO option?

The WTO option involves trading solely under rules set by the World Trade Organisation [WTO], which govern things like tariffs and quotas.

The WTO Option is an approach to Brexit much favoured by some groupings. It is an approach where the UK leaves the EU without having negotiated any trade agreements with the EU, either within the framework of Article 50 negotiations, or on the margins. Instead, it relies entirely on multilateral WTO agreements covering trade-related matters.

The general thrust of the WTO Option argument is that, "Were the UK to leave the EU, it would continue to have access to the EU's markets, as World Trade Organisation rules prevent the EU from imposing unfair, punitive tariffs on UK exports". In reality, the WTO rules only afford very limited protection against discrimination, and then only in respect of tariffs - which are no longer central to trade matters.

Could the UK simply go ahead and trade under WTO terms as soon as it leaves the EU? The short answer is no. In practice, the UK would have to detach itself from the EU and regularise its position within the WTO before it could sign its own trade agreements, including with the EU. As Roberto Azevêdo, the WTO's director-general, said soon after the Brexit vote, there is no precedent for a WTO member extricating itself from an economic union while inside the organisation.

The process would not be easy and would likely take years before the UK's WTO position was settled, not least because all other member states would have to agree. Indeed decisions amongst the other WTO members has to be unanimous and there are currently 164 WTO members.

Complicated matters

Matters are even more complicated than many might realise. The WTO site points to both short and long term issues Britain might face.

There are Regional Trade Agreements which are "by their very nature ... discriminatory". Under WTO rules, an amount of discrimination against third countries [and that would include the UK] is permitted. But the WTO observes modern RTAs, and not exclusively those linking the most developed economies, tend to go far beyond tariff-cutting exercises. They provide for increasingly complex regulations governing intra-trade [e.g. with respect to standards, safeguard provisions, customs administration, etc.] and they often also provide for a preferential regulatory framework for mutual services trade. Indeed the most sophisticated RTAs go beyond traditional trade policy mechanisms, to include regional rules on investment, competition, environment and labour.

Regulatory frameworks

The crunch issue is the "preferential regulatory framework". Unless goods seeking entrance to the EU Single Market [i.e. British exports] conform to the regulations which comprise the framework, they are not permitted entry. Thus, the assertion that, if the UK left the EU, "it would continue to have access to the EU's markets …", is simply not true. And ,  to spell it out,  if it's not true, it's false.

It would be under such conditions that might well create situations as envisaged by some of long lines of lorries queueing up to get into Europe.

Tariffs in themselves do not prevent access to a market. They might make products more expensive but the biggest issue is one of regulatory conformity.

Tariffs simply impose a tax on entry. Regulatory conformity,  generally as a non-tariff barrier [NTB] or, sometimes, as technical barrier to trade [TBT] is the bigger hurdle.

It is generally recognised that, in order to access the Single Market, goods must comply with EU rules. Conformity is the way of overcoming the NTB. But what advocates of the WTO option have not realised is that there is more to it than that . Potential exporters not only have to ensure their goods conform, they must provide evidence of their so doing. This requires putting the goods through a recognised system of what is known as "conformity assessment".

The point about the Single Market is that border checks have essentially been eliminated. The common rules are monitored by relevant national authorities and there is mutual recognition of standards. Thus one can load a truck with grommets in Glasgow and ship them all the way to Alexandroupoli on the Turkish border, with just the occasional document check.

Delays & costs

But the moment the UK leaves the EU, this stops. The component manufacturer may still comply with exactly the same standards, but if the product requires independent testing , any testing houses and the regulatory agencies are no longer recognised. Thus the consignment would have no valid paperwork. And, without it, it must be subject to border checks, visual inspection and physical testing.

What that means in practice is that the customs inspector detains the shipment and takes samples to send to an approved testing house - one for the inspector, one for the office pool, one for the stevedores and one for the lab is often the case. While estimates vary the cost of a container inspection, detention costs for anything up to ten days and testing fees could result in extra £2,000 to deliver a container into the EU.

Aside from the costs, the delays would be highly damaging. Many European industries have highly integrated supply chains, relying on components shipped from multiple countries right across Europe, working to a "just in time" regime. If even a small number of consignments are delayed, the whole system starts to snarl up.

Then, as European ports start having to deal with the unexpected burden of thousands of inspections, and a backlog of testing as a huge range of products sit at the ports awaiting results, the system will grind to a halt. It won't just slow down. It will stop. Trucks waiting to cross the Channel at Dover could conceivably be backed up the motorway all the way to London.

For animal products exported to the EU, the situation could be worse . Products from third countries, which post Brexit would include the UK, are permitted entry only through Border Inspection Posts [BIPs]. Only at these can they be inspected and, if necessary, detained for testing. But, for trade between the UK and EU member states, the capacity of BIP is entirely inadequate. Until more capacity has been provided, trade in these products post Brexit would essentially stop dead . This would be disastrous for the UK since it accounts for some £9 billion in Britain's export trade.

Two way streets

Of course Brexiteers quickly point out that it would be in the EU's interest to negotiate and come to an agreement on these issues.

If the way out of the UK becomes blocked, the return route and incoming trade from the EU would also suffer. Goods from the EU might be delayed or even stop being delivered. Manufacturers which depend on imported components would struggle and may even be forced to close. The resultant job losses could run into millions.

But other countries use WTO rules, don't they?

WTO option advocates will often say that countries such as China, the United States and Australia all trade with the EU without formal trade agreements, and therefore operate under WTO rules. So why would the UK encounter any problems? The answer is remarkably simple. These countries don't rely solely on WTO rules.

Both WTO option advocates and even many critics have focused obsessively with tariffs, but failed to address the issue of non-tariff barriers.

One of the most important types of trade agreement is the Mutual Recognition Agreement [MRA] on conformity assessment. This gets round the problem of border checks, as the EU will then recognise the paperwork on product testing and conformity certification. Agreements on Customs cooperation to ensure that official paperwork and systems mesh  and trouble-free border crossings may possibly proceed.

China, for example, has a Mutual Recognition Agreement on Economic Operators, signed in May 2014. The United States has one on conformity assessment which runs to 81 pages, agreed in 1999. Australia also has one on conformity assessment.

All of these are outside the remit of the WTO but they are nonetheless trade agreements, and vital ones at that.

Nonetheless while WTO advocates claim countries like Australia has no trade agreement with the EU, the EU and Australia conduct their trade and economic relations under the EU-Australia Partnership Framework of October 2008. This aims, apart from cooperation on the multilateral trade system and trade in services and investment issues, to facilitate trade in industrial products between the EU and Australia by reducing technical barriers, including conformity assessment procedures.

In fact there are 82 agreements between the EU and Australia, of which 18 are bilateral. There are 65 between the EU and China, of which 13 are bilateral. Between the EU and the United States, there are 135, of which 55 are bilateral.

Such is the importance of agreements such as the MRAs that the UK would have no option but to seek a deal with the EU, for which there is a facility within Article 50. But, the moment it sought such deals, it would no longer be relying exclusively on WTO rules. It would now be seeking bilateral agreements along the lines of the so-called "Swiss option".

This comes with as many problems as the WTO option, if not more, not least the length of time it would take to agree a Swiss-type arrangement. Indeed some estimates suggest up to ten years if not longer. And that's assuming the EU wants another complex Swiss-type arrangement.

Complicated negotiations

Issues concerning the WTO will even shape the Brexit negotiations themselves. The government is desperate to ensure that Britain's big exporters do not suffer from Brexit. It has explicitly assured Nissan, a major car manufacturer, that it will not suffer. But WTO rules can make such sectoral deals hard. If Britain were to agree bilaterally with the EU not to apply tariffs on cars, the WTO's "most-favoured nation" principle might force it to offer tariff-free access to other countries as well. Channelling government money to boost exports is also something of which the WTO would disapprove and Britain may come under fire from the 164 other members.

So what is the realistic short-term prospect for WTO access to European and other markets? "None of this is impossible," says Peter Ungphakorn, a former WTO official, "but it won't be sorted out quickly." [FT]

While the schedules are being agreed, the UK's legal status as a trading nation will be undetermined, with all that implies for uncertainty and business decisions. The speed of the UK being able to trade on WTO terms in its own right will partly depend on political will. Yet even if other governments co-operate and accept London's proposals, the legal processes and paperwork are likely to take years.

The Government says that it plans "to replicate our existing trade regime as far as possible in our new schedules". This is a sensible approach. It involves minimal disruption and so reduces the scope for other WTO members to object to the UK's new schedules. For tariff levels in particular, copying and pasting should be straightforward.

But the copying and pasting approach will not work for all aspects of the schedules. There are some areas, notably on quotas and subsidy limits, where the UK must reach an agreement on what share of the EU figure it takes. This will in truth be a three-way negotiation, between the UK, the EU and other WTO members, because it will also lead to a reduction in the EU's quotas and subsidy limits

Bumpy roads ahead

The WTO option may seem like an easy way out for post-Brexit Britain, but that road is, in reality, covered with bumps. And there are already signs of the problems Britain will encounter should it pursue the WTO option.

As Brexit talks stalled in the last week Britain and the EU formally informed members of the World Trade Organisation how they planned to split up the EU's tariff quotas and farm subsidies after Brexit. But the plans had already been rejected by the White House and several other nations [BBC / Guardian].

WTO chief Roberto Azevêdo has pointed out any post-Brexit trade talks must start from scratch and only after a complete divorce from the EU. Pascal Lamy former WTO Director General has said it would be a long and bumpy ride. Why? Essentially there are some 164 countries with which the UK would need to renegotiate, which could take up to a decade, if not longer.

Once the UK has a draft of its schedules, and once it has left the EU, it can start trading off them. The WTO does have a formal process for approving schedules – known as 'certification' – which requires unanimous approval from every WTO member, i.e. 164 countries.

However, WTO members can still trade off schedules that have not been certified. The EU, for instance, has not certified its schedules since 2004, but in the meantime, has altered its schedules to reflect successive waves of enlargement.

At some point the UK will want to certify its schedules, requiring the consensus of all WTO members. But the certification process does not pose an immediate threat to the UK's ability to trade post-Brexit.

Once the UK has declared its schedules and started trading, other countries in the WTO may object, particularly if they can demonstrate that the UK has in some way reduced the level of market access on offer.

If there are challenges, these could be lengthy and expensive for the UK to contest. However, the disputes are likely to take several years to resolve, during which time the UK would be able to continue trading off its schedules, whether or not they have been certified.

There are three big trading partners in the world, the EU, US and China, and they might be the most difficult partners to reach an agreement with. Brexit is a divorce between the UK and the EU, and there will certainly be some tension after the fact. The other issue in constructing a deal with the EU is that all member states have to agree to the terms, which can lead to a stalemate fairly quickly. President Trump has been very vocal about wanting to invest at the national level, at the expense of international trade, to "make America great again". With his "America first" policy in mind, it is not clear how the Trump administration will approach a trade deal with the UK.

China does not have the political involvement of the other two, and may want to maintain or even increase export volume to the UK by minimising tariffs and remaining competitive on a global scale, but it still could prove difficult to organise a deal quickly.

In summary the WTO option will be a long, arduous and potentially expensive exercise with no guarantees that Britain's trading position will improve. Indeed the evidence seems to point to the fact that Britain could lose billions of pounds in lost trade in the near term and may take years to establish new trading relationships.In October 2016 David Davis, the Secretary of State of Exiting the European Union, admitted that businesses would face a cliff edge should Britain fall back on the WTO regulations [Independent].  "We need to conclude this [the EU negotiations] within the two years to avoid any cliff edge," the Brexit secretary said after being quizzed concerning the risks of reverting to WTO rules.

Brexiteers want to turn the UK into a global trading powerhouse. But until the country has sorted out its legal standing, it risks merely sitting on the sidelines.

Sources and links: Guardian / Institute for Government / CBI / FCO / LeaveHQ / Stowga / Economist / Reuters

tvnewswatch, London, UK

Monday, October 02, 2017

Growing number of voices say Brexit won't happen

Hard line Brexiteers may well be adamant that Brexit will happen, but there are a growing number of voices who feel that Britain won't actually leave the EU.

In just the last week or two there have been several high profile politicians who have suggested Brexit won't happen. But what are the chances that Britain will change its mind?

In August this year the new LibDem leader Vince Cable said a combination of the politics of Brexit "unravelling" and the "sheer practical difficulties" could stop UK Government plans to leave the bloc.

"I think there is more than a possibility that it may never happen. I'm not saying it definitely won't but there is a significant possibility," he said [Independent / Guardian]

His views certainly weren't new. Indeed he had expressed such doubts on the Andrew Marr show on the BBC a month earlier.

The former PM Tony Blair had also expressed his doubts several times this year, and said it was "absolutely necessary" that Brexit did not happen. His most recent prediction was that there was a 30% chance of Brexit not happening.

Tony Blair, appearing on Bloomberg TV, was asked what the chances of Brexit not happening were. "It's really difficult to say," Blair responded, "Most people would tell you, and I should say to you I think it is likely it happens."

"On the other hand, I still have some difficulty seeing how after the general election, which produced a hung parliament in the UK, this government is going to get its form of Brexit through. Because I think there are a lot of Labour MPs who will oppose it, and a lot of Conservative MPs who will oppose a hard Brexit. So there's maybe, I sometimes say, a roundabout 30% chance that it's changed. But the truth is a lot will depend on how the debate develops over this year."

He wasn't the only politician expressing doubts on the business channel. Former UK cabinet minister Michael Heseltine said it was "very possible" that Britain would reverse its decision to leave the European Union. "We will once again recognise that that's where we belong," he said in an interview with Bloomberg's Mark Barton on 28th September, just 10 days after Blair's appearance.

The Tory grandee also appeared on the UK radio station LBC where he even suggested Britain would not only remain a part of the EU but also adopt the euro.

He told LBC radio it was "very possible" the UK will never leave the 28-nation bloc, despite Article 50 being triggered in March and the Brexit negotiations now being well underway.

Asked why, Lord Heseltine said there were two likely reasons. "One, that public opinion changes – which it hasn't done yet – and secondly, that Parliament, which is the sovereign body of our country, just hasn't got the stomach for it, so there will not be a majority for it, and a way will be found to upset the present Article 50 procedure." [Independent]

Lord Ashdown, a Lib Dem grandee and former leader of the party, also suggested that Brexit would not happen simply because the current government were "hopeless".

He accused the Government of being incapable of delivering "anything" and predicted there would be a "something quite close to a parliamentary stalemate" in the spring of 2018.

Lord Ashdown, who was speaking at a fringe event at the Lib Dem conference in Bournemouth on Britain's Brexit options, said, "My view is that the dysfunctionality, the dystopian hopeless dysfunctionality of this government, they can't deliver anything - if you ask them to deliver the Sunday papers they couldn't do it, or at least they'd have a row about it." [Mirror]

Failing negotiations

The UK negotiations with the EU have done little to inspire anyone on either side, leavers or remainers. Nor has the EU's chief negotiator Michel Barnier been entirely impressed, saying that there needed to be a great deal more progress before the subject of trade could be discussed [Guardian].

The Prime Minister's speech in Florence was lauded by some in the Conservative party as an attempt to help break the deadlock, especially concerning issues surrounding Britain's financial commitments [Bloomberg]. However, it was condemned by hard liners within her own party for making too many concessions. On the other side it has been seen as an admission of defeat and a desperate plea for more time on seeing that the negotiations were not going so well.

"The Florence speech demonstrates the sheer scale of May's mistake in making Article 50 notification when UK not ready," David Allen Green, a Law and Policy commentator at the FT, tweeted.

Nonetheless, Barnier did describe May's suggestion of a 'transition' as being 'constructive' [Guardian], although the European Union president Jean-Claude Juncker didn't seem quite so optimistic and said a 'miracle' needed to happen in order to go forward [Independent].

Steve Bullock, a former EU negotiator for the UK, was also less than impressed with May's speech saying the the week's events "showed the psychology of Brexit to be composed of arrogance & self-importance accompanied by a crippling victim complex"[Twitter]

Unfolding fiasco

The picture on the surface certainly doesn't look as regards Britain's position in Brexit talks. But neither does the situation look good for Britain and its economy. The pound remains weak, the UK's credit rating has been downgraded [Bloomberg] and the economy is not as strong as some have suggested with consumers surviving on credit rather than earnings [Independent]. In addition Britain has now sunk to the bottom of the G7 growth table [FT].

Meanwhile big business remains uncertain which way to turn. One sector that is gambling in the face of Brexit is the insurance industry some of whom are playing a high stakes game of poker. Contracts agreed, sometimes decades ago, under EU passporting rules might be in jeopardy if and when the UK leaves the EU.

Insurers say that if and when passporting disappears from the UK, they will be unable to legally pay out on those policies. The Association of British Insurers says that its members face the choice of breaking the contract or breaking the law. This is not a small matter since liabilities under these long-term cross-border deals run into billions of pounds [FT].

Some businesses have already taken a hit. As the Tory party conference opened in Manchester it emerged that Monarch airlines had gone into receivership. Monarch had been in financial trouble for some time and only days before with talk that its licence was at risk [Telegraph].

The full reasons why the airline collapsed are multifold. Unite's national officer Oliver Richardson said, "There were a number of factors that impacted negatively on the company."

"However, continuing uncertainty surrounding Brexit and the ability of UK airlines to fly freely in Europe after the UK has left the EU undoubtedly hindered Monarch getting the investment it needed to restructure and survive." [Telegraph]

Wavering odds

So what are the odds that Brexit won't happen. Blair gives it a 30% chance while others such as Vince Cable, Lord Heseltine and Lord Ashdown will only say, Brexit "probably won't" happen. As far as the business experts are concerned there are few who will step up to the plate and air an opinion on the matter. However, the banking corporation Morgan Stanley have suggested there is a 10% chance Brexit won't happen [Business Insider].

That is perhaps little consolation for remainers whose voices are getting louder [BBC / Metro / Reuters]. But it is nonetheless worrying for euro-sceptics, some of whom feel that there are many in government desperately looking for a way to stop Brexit altogether.

In the time since the referendum Theresa May has shown herself to be disingenuous after making a complete U-turn concerning her views on Brexit having seemingly ignored everything she said in a speech she made before the Institute of Mechanical Engineers months before the referendum. This was seen by some to be a cynical attempt to secure leadership of the Tory party. Having seized power she has uttered one meaningless soundbite after another - Brexit means Brexit, a Red, White & Blue Brexit - before invoking Article 50 only to dissolve parliament in order to fight an election which resulted in a hung parliament. 

In order to get the required majority May then made a deal with the DUP with promises of significant amounts of funding to Northern Ireland. However it didn't come without tears being shed. And according to the Times the Queen was not amused, indeed there was apparently 'fury at the Palace' over May's behaviour.

As for the Europeans with whom she and her party are negotiating, there appears to be complete bewilderment as to what direction she is going [Spiegel].  

Ticking clock

Time is running out for Brexit. According to the chief EU negotiator, Michel Barnier, only one year remains to construct a new and acceptable relationship between the UK and the European Union, since six months will be needed for its ratification by the other 27 member states. Any agreement will have to take into account not only trade, but also security, defence, terrorism, crime and much more [New Statesman]. 

Meanwhile the British public is gradually becoming aware of the costs of Brexit. Sterling remains weak despite short lived rallies. Prices have risen for imported food and clothes, and travel abroad has become more expensive. Wages have not increased to match prices, though the relaxation of the austerity pay freeze of 1% may ease the position of public sector workers a little. Many business leaders, though not all, have also come out to complain about lost millions due to the fall in sterling and the uncertainty for the future [City AM]. 

UK growth is down, for the second quarter this year, indeed it is the weakest since 2013 [BBC / Sky News / Guardian].

And what of the special deals Britain will make on the world stage after Brexit? It is already looking shaky after the US, with whom May had touted as a forthcoming major trading partner, slapped a 219% tariff on Bombardier which manufactures aircraft parts [New Statesman]. 

It has also emerged that trade statistics, often used by Leave campaigners during the EU referendum are heavily distorted by the UK's gold import/export industry. The Government's trade statistics show that, over the past five years, the share of UK goods being exported to the European Union was only 46% - a fact frequently referred to by those who campaigned for Brexit.

However, this number is severely distorted by the flow of gold bullion in and out of London - the world's major centre for the trade of this precious metal. In the fourth quarter of last year, a sharp outflow of gold showed up as a sudden spike in exports, causing some economists to conclude that Britain's manufacturers were starting to benefit from a post-Brexit jump in confidence.

In fact, the spike was primarily a sign of investors pulling gold out of vaults in London [Sky News].  

Industry is already getting worried, and particularly the car industry, which is reliant not only on Europe as an export market but also as a source for parts and materials [Sky News].

Cliff edges

Britain, after Brexit may be able to negotiate its own trade deals, but it will have to, if working under WTO rules, negotiate with 163 WTO members when drawing up tariffs and trade deals. Indeed any Brexit negotiation will be like a walk in the park compared to the UK 'rejoining' the WTO as an independent trading nation [Politico].

The UK does not have to join the WTO as such, since it is already a member by having been a part of the EU. The UK's detailed WTO commitments on tariffs and barriers to trade are set out in schedules shared with the EU. On Brexit, the UK would, however, need to have its own schedules and for those schedules to be certified, there must be no objections by any other WTO members, all 163 of them. And the sticking point here is that the decisions within the WTO must be unanimous [BBC / FT].

The UK will of course still be obliged to follow EU rules when it comes to anything exported to the EU.

Outside the EU the UK won't pay the membership fee of some £16 billion a year. But it has to remembered that nearly half of that came back as a rebate. And in addition there were other significant returns in terms of EU funding [BBC].

In fact, rebates and funding aside, the EU membership fee accounts for only 2% of total UK government expenditure [EconomicsHelp / Full Fact / BBC].

For richer or poorer

So will Britain be richer if, as May insists, Britain does leave the EU in March 2019? Well the government may well profit. After the UK leaves in March 2019 it will not be obliged to adhere to new EU tax rules aimed at stopping the likes of Google and Amazon from engaging in tax avoidance  [Times of Malta]. Thus Britain could well become a tax haven for such companies, which would go against the grain of many right wing papers that have in the past few years heavily criticised such enterprises.

But will the average Briton benefit? It is highly unlikely. Agriculture will be unlikely to see EU subsidies replaced by spending from Westminster. Education may also lose out and school milk, currently subsidised by the EU, may also take a hit. And with increased tariffs on many imports, the cost of living is certain to increase, not taking into account continued weakness of the pound.

As for the £350 million for the NHS, which has already been established to be a fantasy figure even by the ONS, cuts rather than spending is likely to be the order of the day.

And as the numbers of EU workers diminish, whole sectors of British industry will also suffer. Whilst only predictions, cuts in the number of EU nurses, fruit pickers, teachers and others will surely change the economic and social landscape.

No future?

It is easy to be flippant and scream "passports, fish and sovereignty". However the change in the colour of one's passport will not make anyone's life easier. Supposed changes to fishing rights - which while important to fishermen, only have a marginal effect on the British economy as a whole - may just create more problems for Britain's fishing industry. And as has already been established, Britain's laws are and have always been sovereign. Indeed while the UK does follow and implement and incorporate EU law into British law, most such regulations are to do with trade. In addition it also has to follow rules and regulations outside the EU in order to trade elsewhere. Outside the EU the UK would still have to follow such rules but would have less say and no veto on such laws, rules and regulations.

All this uncertainty, the headaches of negotiating with the EU let alone the subsequent months if not years of wrangling with the WTO member states, growing signs of slowing - if not failing economy - plus the downsides of being outside Britain's biggest trading bloc may well create a climate where Brexit will be abandoned. It may not happen by implicit declaration. It is unlikely that one will hear May declare something along the lines of, "Sorry it's too difficult and not good for the country so we're abandoning this project!!"

But it might come about through, as Heseltine suggests, another election where the Tories lose to a party which declare they will abandon Brexit and renegotiate a better position for Britain within the EU. Of course any subsequent 'renegotiation of Britain's place in Europe' will likely be a fudge, and things may just continue as they were. But it may be the better option than continue along the path on which the former PM David Cameron sent Britain down.

Even if Brexit is abandoned, there has already been much damage done that will need repairing. Deep division have been carved in society by the EU referendum, wounds that will take many years to heal.

Some companies, particularly financial institutions, have already made shifts, and winning back business may be difficult especially if they find their new homes in places like Frankfurt and Paris just as comfortable.

And there is the issue of EU workers, on whom Britain is reliant. A great many have already upped sticks and left the UK and it might take a while before the xenophobic atmosphere - perceived or otherwise - diminishes enough to encourage them to return.

Whatever side of the argument one stands, there are not many who would stake a bet on what will happen in March 2019. Even staunch remainers will only utter phrases such as 'probably not happen' or lay down odds of a 1 in 4 chance of Britain remaining. There needs to be a far clearer picture of how disastrous Brexit will be before those odds swing the other way and public opinion shifts.


tvnewswatch, London, UK

Wednesday, August 23, 2017

When language is not a barrier

Recently the European Commission President Jean-Claude Juncker proclaimed that English was losing its importance. However, for anyone travelling around the world, and indeed across Europe, it is clear that English is almost a necessity.

European Commission President Jean-Claude Juncker told a conference in Italy on the EU that "English is losing importance in Europe".

Amid tensions with the UK over looming Brexit negotiations, he said he was delivering his speech in French.

"Slowly but surely English is losing importance in Europe and also because France has an election," he said, explaining his choice of language.

Meanwhile he called the UK decision to leave the EU "a tragedy".

Britain's leaving the EU may well be a tragedy, but Britain's influence around the world cannot be denied, especially when it comes to language.

While Mandarin Chinese is the second most widely spoken language after English, it is mainly of importance within mainland China itself.

English, on the other hand is spoken by people all around the world.

English is of course the international language when it comes to aviation in particular and to some extent for maritime communications.

But English is often the second language after the local language.

Go to China and, while having some fluency in Mandarin Chinese is obviously useful, one will find many people also speak some degree of English.

But the importance of English is even more marked when travelling around Europe.

Of course every country and its people are proud of their own language. But the fallback, in order to communicate with nationals from other countries better, is very often English.

One marked example was a coversation heard outside a bar in central Portugal. "So you're from Italy? But you're not members of the Mafia.." joked some young Portuguese as they chatted to some Italian girls over a beer.

Inside the bar the conversation between a Portuguese guy, two Belgians and a Brit was almost entirely conducted in English.

Despite the reputation that the French have for arrogantly refusing to speak anything other than their mother tongue many are surprisingly fluent in English. Moreover they are often very accommodating and willing to chat at length in English whilst just as willing to let you practice one's French.

Of course it has to be said that not everyone in mainland Europe, or indeed around the world, speak English. But that said a great deal more foreigners speak English than Britons speak any foreign language.

"You have it too easy," says one Belgium who lives and works in Portugal. She was herself fluent in Dutch, French, Portuguese and English, as well as her native language of Flemish.

And of course she was right. Many Brits either arrogantly expect people to speak English or simply cannot even be bothered to make the effort to learn something of the language whare they are visiting.

It might be a little too much to expect from the British that they become fluent in several languages. But for regular visitors to countries on the continent or elsewhere in the world it is surely just a matter of being polite to at least attempt to say something in the local language.

While not fluent in Mandarin Chinese by any means I can survive fairly indepedently whilst travelling in China. But even one off visitors should at least attempt to say 谢谢 [xie xie - thank-you].

Having only visited Spain once, and never having stopped by Portugal, both languages were alien to me.

Nonetheless I made the effort to learn some key words and such attempts are always greeted with delight.

Jean-Claude Juncker is wrong to say English is losing its importance. But he might have been right to suggest that it is just as important to make an effort to learn and speak more than just English.

tvnewswatch, Aragon, Spain