Tag Archives: markets

Brexit Botch

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British Prime Minister Theresa May yesterday pulled today’s planned Parliament vote on her Brexit deal with Brussels when it became clear that not even her fellow Tories supported the deal in sufficient numbers to pass.  What’s more, she’s not suggested a new date for the vote, even though something is required to be presented to Parliament by 21 Jan 2019.

The deal as it stands is a terrible one, worse IMNSHO than a plain, unadorned breakout from the European Union.  It represented May’s meek submission to Brussels on nearly every one of their demands—including functional retention of EU immigration “rights” and EU court rulings within what used to be sovereign Great Britain for several years after the British nominal departure.

Nevertheless, May’s failure before Parliament represents further damage to Great Britain.

And this:

[May] will tour European capitals and then go back to Brussels to try to secure sweeteners that might buy off huge opposition to the package.
She insisted her blueprint was still the “best deal negotiable”, and said she still planned to put it to a vote once “reassurances” had been secured on the Irish border backstop.

Never mind that the Brussels “negotiators” have already said the present deal is a done deal and there will be no further negotiations on the matter.  There can be no sweeteners, as a result, nor can there be any reassurances: in particular, Brussels has already given all the assurances on the Irish border matter that they intend to putter around with.

Stand by for further May surrender to Brussels.

Still a Foolish Tax

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The EU’s usurious digital tax on international tech companies that they had proposed has met with sufficient resistance from low-tax member nations—Ireland and several northern European nations—that France and Germany, the drivers of the proposal, have offered a modified version.  This new effort would

  • limit the tax to a 3% levy on online advertising revenues rather than all online revenues
  • effectively exempt Amazon, AirBnB, and Spotify—a sop to non-EU administrations, especially Trump
  • run until 2025

The beef underlying this drive to tax techs centers on tech firms paying less tax than putatively traditional firms on their EU earnings.

The European Commission estimates traditional companies pay 23% tax on profits—compared to just 8 to 9% for internet firms, with some paying effectively none.

Given that low tax rate nations like Ireland and Luxembourg are attractive to businesses, including tech firms, the foolishness of this new proposal is exposed.  It tries to get a common, high, tax imposed on tech firms at least.

Maybe not foolishness, so much as cynicism.  It remains inconceivable to the EU to lower its overall taxes to competitive levels rather than trying to suck those low-tax members into raising theirs to uncompetitive levels.

What’s So Hard?

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Great Britain is agonizing over how to deal with the People’s Republic of China’s Huawei Technologies Co and the latter’s desire to supply the nation’s 5G mobile network.  On the matter of Huawei’s having supplied the predecessor 4G network, Great Britain thinks it had arrived at “an understanding” with Huawei concerning the latter’s behavior vis-à-vis the installed 4G—which, astonishingly, allowed Huawei to monitor “aspects” of 4G tech.  Britain’s MI6 head, Alex Younger, seems to be the chief agonizer.

5G will by and large be based on Chinese technology, chiefly with Huawei. We need to decide whether we are comfortable with the ownership of these platforms in the case where our allies take quite a definite position…This is not straightforward[.]

Why must Huawei be the supplier of Britain’s 5G network?

And: Huawei is an arm of the People’s Republic of China government—how is this not a straightforward decision?  Why is it so hard to decide whether the nation wants to let the PRC government spy on every aspect of the British government, its defense, its economy, its citizens?

Another Free Trade Deal

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As Ashley Tellis, of the Carnegie Endowment for International Peace, pointed out, a free trade deal with “Taiwan” would be a Good Thing.  Indeed, that would be a good start, but it really would be better to sign a free trade deal with the Republic of China rather than with an island.

He also pointed out that such a trade deal would go a long way toward easing, if not stopping, the People’s Republic of China’s effort to diplomatically isolate the RoC.

Accordingly, a free-trade agreement would demonstrate American solidarity with Taiwan is just a bit ironic given the thrust of Tellis’ piece.

Second Thoughts?

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The New York City city council has decided to hold a series of hearings on the just concluded Amazon HQ2 deal cut with the city.  The council’s beef is the secretive nature of the negotiations between amazon.com and the folks purporting to represent the city.

Deputy Mayor Alicia Glen, Economic Development Corp President James Patchett, and Amazon executives have been invited to the hearings, which will take place during the next few months, City Council Speaker Corey Johnson’s office said Thursday.

There’s nothing wrong with the negotiations themselves being done behind closed doors; that’s the only place “frank and open” discussions can occur.

However.

Now that the negotiations are concluded, and before the city council has to vote on accepting or rejecting the deal—especially over what the negotiated deal wants to commit the city to—it’s time for the city council and its members’ constituents to hear the full details of the arrangement.

The council’s hearings should be open to the public and moved to a larger venue if needs be.  If the constituents don’t like what they hear, the deal should be voted down.  Or maybe the deal should be put to a referendum.

If amazon.com walks away from that, that would demonstrate the uselessness of the deal to the city’s residents.