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Can the UK improve the Brexit deal?

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After a period of dormancy, debate over the shape of the UK’s post-Brexit trade arrangement has suddenly rekindled after senior government figures in Rishi Sunak’s administration quipped that they were looking for a closer relationship with the EU.

Downing Street quickly dismissed reports that the government expected a “Swiss-style” relationship to develop over the next decade Backlash from Brexit to the right of the party.

But in an interview with BBC Radio 4 today Robert Jenrick, the immigration minister, said on Monday that the government “wants to improve our trading relationship” with the European Union, while sticking to the “basic terms” of the trade deal the UK agreed with Brussels in 2020.

How can the EU-UK Trade and Cooperation Agreement (TCA) be improved, both within the current government’s red lines, but also what might be possible if a future government took a different approach?

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How does TCA work?

The EU-UK Trade Agreement is a basic “Canadian-style” free trade agreement that leaves the UK outside the EU customs union and single market. It’s a “zero tariff, zero quota” deal.

This means that goods sufficiently ‘Made in the UK’ to qualify can enter the EU duty-free. But they have to prove that they qualify for this access as well as comply with countless EU rules and regulations, for example on food safety rules or industrial standards. This adds cost and delay to trade between the EU and the UK.

The Travel and Tourism Act also ended the “free movement of people”, which presented challenges for some UK businesses, such as hospitality and construction, that relied on access to flexible work from the EU.

Finally, the agreement removes any jurisdiction of the European Court of Justice in the UK, with the exception of Northern Ireland which has remained in the EU single market for goods to avoid the return of trade borders on the island of Ireland.

How can TCA be improved?

If the UK government sticks to its red lines on EU law, budget contributions and regulatory alignment, it cannot improve much according to trade and economics experts.

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Tony Dunker, director general of the Central Bank of Iraq, urged the government to “get around the table. Do the deal. Open the TCA” at the trade body’s annual conference. But there are limits to what can be achieved within the parameters Jenrick espouses.

Resolve a long-running dispute over the implementation of the post-Britain’s exit from the European Union Northern Ireland’s commercial arrangements would certainly improve the musical mood. It might also open up some currently off-limits areas – such as the UK’s participation in the €95 billion Horizon science programme – but it wouldn’t change the fundamentals of the TCA.

UK merchants will remain outside the EU regulatory framework, still have to prove that their goods qualify for tariff-free entry into the EU single market and still have to fill out forms showing they meet EU standards.

The UK Treasury and the Office for Budget Responsibility, the financial watchdog, estimate that this friction will result in a 4 per cent hit to UK GDP in the medium term. But small tweaks to the TCA won’t drastically change that assessment, according to Anand Menon, UK chair at a think tank in a changing Europe.

“You can adjust all you want about the margins, it will make the relationship easier and may help with security, but economically it won’t make much difference at all,” he said.

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What can the UK do to learn from the negative impact of Brexit?

Any moves to mitigate the negative effects of the TCA would involve blurring the current government’s red lines, particularly in terms of accepting ECJ oversight over key areas – for example, regulations governing cars, chemicals or food standards – which the UK rejected in Trade 2020. talks.

The British Chambers of Commerce have identified five key areas they would like to see improved. They include a veterinary agreement to reduce the cost of paperwork for the export of animal and plant products; a package deal to simplify VAT arrangements so that they do not differ from one EU country to another; a deal to recognize the EU CE marking on industrial and electrical goods; and bilateral agreements with individual EU member states to allow better access to professional services in the UK.

The challenge, according to Anton Spisak, a specialist on trade and the European Union at the Tony Blair Institute for Global Change, is that delivering meaningful benefits in these areas will require much higher levels of regulatory alignment than the current government can accept.

Such a move would directly contradict the government’s stated desire to seek “Brexit benefits” by actively moving away from EU regulations via the retained EU bill, which is currently in Parliament.

“Ministers can take decisions unilaterally to align with EU rules as consistency of rules obviously benefits business. This would mitigate some business costs, but it wouldn’t mean friction-free trade unless the UK could formalize that.” In a bilateral agreement with the European Union – and for that, approval of the jurisdiction of the European Court of Justice would be inevitable,” Spisak said.

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What about a “Swiss” deal?

The Swiss deal, which builds on a network of 120 bilateral deals with Brussels, is in a very different regulatory and political orbit than the underlying Canadian deal in the UK. It is also completely off the table in the current circumstances, like Sunak Recognized by CBI today.

As a member of European Free Trade OrganizationSwitzerland is selectively but deeply integrated into the EU single market and has to “dynamically align” its laws with EU law in relevant areas to maintain this access. It also pushes into block coffers.

This principle of accommodation has been emphatically rejected by former Brexit negotiator Lord David Frost, and as evidenced by the reaction to media reports that the government has favored a Swiss-style trade arrangement over time, it still touches a raw political chord among Brexiteers. .

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Exclusive: Canada’s largest pension plan, CPPI, is ending the pursuit of cryptocurrency investing

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© Reuters. FILE PHOTO: A representation of bitcoin is seen in front of a stock chart in this illustration taken on May 19, 2021. REUTERS/Dado Ruvik/File Photo

Written by Divya Rajagopal

TORONTO (Reuters) – Canada’s largest pension fund, CBB Investments, has ended its efforts to study investment opportunities in the volatile cryptocurrency market, two people familiar with the matter told Reuters.

The reasons behind CPPI’s abandonment of cryptocurrency research were not immediately clear. CPPI declined to comment but said it has not made direct investments in cryptocurrency. He pointed to previous comments on cryptocurrency by its CEO, John Graham, in which he sounded cautionary.

The people added that CPPI’s Alpha Generation Lab, which studies emerging investment trends, put together a three-member team in early 2021 to research cryptocurrency and blockchain-related businesses, with a view to potential exposure.

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But sources said CPPI gave up the chase this year and redeployed the team to other regions.

CPPI’s move also comes as two of Canada’s largest pension funds have divested their investments following the collapse of cryptocurrency exchange FTX and cryptocurrency lender Celsius, which collapsed this year.

Earlier this year, CPPI CEO Graham said the pension plan, which manages C$529 billion ($388 billion) for nearly 20 million Canadians, did not want to invest in digital currencies simply for fear of missing out.

“You really want to think about the intrinsic value of some of these assets and build your portfolio accordingly,” Graham said in a June speech. “So I’d say crypto is something that we keep looking at and trying to understand, but we haven’t really invested in.”

It was not clear when CPPI dropped its plan. One source said the team was actively evaluating investment opportunities in late July this year, but the second source said the team finished its work earlier than that.

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Details of CPPI’s quest to invest in cryptocurrency and its decision to end it were not previously reported.

The sources declined to be identified because the information was not made public.

Canadian pension funds’ exposure to the cryptocurrency sector has come under scrutiny in the aftermath of the FTX debacle. While Canadian pension funds are not prohibited from buying cryptocurrencies, they are known for risk-averse investment strategies to generate steady returns for retirees.

While CPPI has avoided investments in cryptocurrencies, some of its peers have been caught up in the chaos of the sector this year. The Ontario Teachers’ Pension Fund (OTPP), which oversees approximately C$242 billion in assets, has written off its C$95 million investment in FTX. OTPP said it was “disappointed” with its investment in FTX.

Earlier this year, Canada’s second largest pension fund, Caisse de dépôt et placement du Québec (CDPQ), said it had canceled its C$150 million investment in bankrupt crypto lending firm Celsius. CDPQ has initiated legal action against Celsius in Bankruptcy Court.

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The Ontario Municipal Employees Retirement System (OMERS), which manages C$121 billion, made three allocations to crypto-related companies through the business of OMERS Ventures between 2012 and 2018, but exited all investments in 2020.

Another Canadian pension fund, OP Trust, told Reuters it has investments in the offshore digital asset fund space. She said the investment in core encryption technology.

($1 = 1.3650 Canadian dollars)

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Argentina urges the European Union to renegotiate a South American trade agreement

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Argentina’s President Alberto Fernandez has called on the European Union to renegotiate a landmark trade deal with South America, saying the agreement is unbalanced and a threat to the auto industries of Brazil and Argentina.

Fernandez told Financial Times’s Global Boardroom Conference.

Asked how long this process might take, he said, “As long as the parties want to. It’s like tango. The tango is danced by a couple, you need both of them to want to tango, otherwise it’s very difficult.”

The trade deal between the EU and the Mercosur bloc – Argentina, Brazil, Paraguay and Uruguay – was agreed in principle in 2019 after nearly two decades of haggling. But its conclusion has been shelved amid European objections to Brazil’s poor record of preserving the Amazon rainforest under far-right President Jair Bolsonaro.

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The election in October of Luiz Inacio Lula da Silva, who has pledged to preserve the Amazon, to succeed Bolsonaro, raising hopes that a long-awaited deal between the EU and Mercosur might gain final approval. Spain’s trade minister, Xiana Mendez, told the Financial Times last month that she believed he would support the agreement. “It’s very balanced,” she said. We do not support reopening negotiations.

But Fernandez told the Financial Times conference that the environment “isn’t why we don’t get the agreement, it’s an excuse”.

The real reason is that for Brazil and Argentina [as] Car producers, the only car producers in South America, this agreement is problematic because it makes things difficult for us if European competition reaches South America,” he said.

At the same time, he added, South American countries faced a “burden of hurdles” in selling their agricultural exports to Europe, with countries such as France, Ireland and Poland opposing ending agricultural subsidies and allowing competition from Argentina.

“Neither I nor Lula are against the agreement with the European Union,” Fernandez said. You have to keep in mind what this agreement is, because this agreement has problems. . . related to market imbalances.

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While the debate over the long-stalled trade agreement with Europe continues, Argentina is striking deals with China, its second largest trading partner after Brazil. Beijing last month agreed to expand a swap facility with Argentina’s central bank to $25 billion, which helps boost the South American country’s meager foreign reserves.

China has also built a space monitoring station in the Patagonian province of Neuquen, which the Center for Strategic and International Studies in Washington says is Works with little Argentinian supervision It can be used to gather military intelligence.

Fernandez rejected the argument Argentina Need to choose between the United States and China, saying that he does not wish to recreate the Cold War era. “Argentina has to do what works best for Argentina,” he said. “The US is very concerned about what China might do in Latin America but China could do . . . just like the US could do in Latin America, they could come and invest.”

Argentina is building a naval base at Ushuaia in southern Patagonia to support ships patrolling the South Atlantic and Antarctica, but Fernandez called “fictional” news reports that China was involved. He said, “There is no such thing.” “In Argentina you cannot have Chinese, American or French military bases . . . because we are a sovereign country.”

The South American country faces dire economic challenges, with inflation approaching 100 percent annually, access to international financial markets largely cut off after a default in 2020, and exchange controls that have pushed dollars on the black market to nearly double the level. the official.

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Fernandez said the Argentine economy was “strange” because, despite high inflation and “unpayable” levels of debt, the country also had record levels of foreign investment and exports in the first half of the year, unemployment was low and consumption was increasing.

“If you cling to the image of an inflated Argentina . . . of an indebted Argentina, you will say Argentina is a mess,” Fernandez said. “But there is also all this data that points to sustainable growth and huge potential.”

He said the solution to the longstanding economic problems of this South American country is to add value to its goods. “Argentina must stop being an exporter of raw materials and become an industrialized country.”

Argentina holds presidential and congressional elections next October, and opinion polls show Fernandez’s Peronist party trailing the conservative opposition. The president has said in the past that he would like to run again but that his approval ratings are low, and he told the Financial Times conference that he was “totally immersed” in governance.

His powerful vice president, Cristina Fernandez de Kirchner, said on Tuesday she would not run again Convicted of corruptiona ruling against which she plans to appeal.

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“I’m not thinking of re-election, believe me,” said President Fernandez. I think how to solve all these problems[of the country]. . . I want to finish my tenure having seeded Argentina with opportunities for the person who will succeed me.”

Additional reporting by Andy Pounds in Brussels

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Renault says executive vice president Delpos has resigned, according to Reuters

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© Reuters. FILE PHOTO: A Renault logo is pictured in a shop in Vertou, near Nantes, France, January 17, 2022. REUTERS/Stephane Mahe/File Photo

PARIS (Reuters) – President of the French automaker Renault The company said on Wednesday that its new mobility unit Mobilize (EPA:) and group executive vice president Clotilde Delbos have both resigned.

Renault said Delpos would leave at the end of December, without giving a reason for her departure. The company said in a statement that Phaedra Ribeiro will be named CEO of Mobiliz while Patrick Claude, Group Chief Financial Services Officer, will take on the role of Delbus on a temporary basis at Renault Financial subsidiary RCI Banque.

Delbos joined Renault in 2012 as group controller and was a seasoned executive who helped transition between former boss Carlos Ghosn, who was arrested in Tokyo in 2018 on financial misconduct charges, and current CEO Luca de Meo, who took over in the summer of 2018. Past. 2020.

Delbos, who also served as Renault’s chief financial officer between 2016 and early 2022, pitched herself in to take over as CEO before the board decided to call the outsider de Meo.

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Renault is in the middle of a major and complex overhaul that will see it spin off its businesses into five companies, deepen ties with China’s Geely and spin off the electric car unit with a stock market listing next year.

Shares of the automaker briefly fell after Delbos’ departure was first reported by a Le Monde reporter on Twitter but then recovered to close a touch higher.

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