Both the Irish Times and Financial Times have reported in recent days on the failure of Briatin to secure a better trade deal with Japan as the run-up to Brexit continues. The talks have stalled recently as negotiations between Briatin and the EU have intensified.
This comes as some commentators have noted negotiators may be seeking to take advantage of Britain’s precarious position at the moment. Japan has grown in confidence in seeking a more beneficial deal with Britain than it could with the larger European Union noted the Finaicial Times.
According to most of the officials involved in this process, only a little progress has been made as most diplomatic and economic perosnall have been diverted to tackling EU issues at the moment. At the end of March, the existing tariffs will become reverted to the World Trade Organization levels should a no-0deal Brexit occur. The only limiting factor would be that the UK ratifies a Brexit deal without which the tariffs will continue at the existing level while Briatin goes through its transition period.
Since Japan is looking to have the best
possible deal, they have decided to exercise patience as regarding the effect
of the delaying Brexit deal. The existing trade terms have been extended in
lieu of this, but only for the period in which Britain planned for its
transition with the European Union.
Unfortunately, this will not be applicable
should the United Kingdom fail to make an agreement with Brussels.
Furthermore, a wide number of people believe that It is too late for the Japanese Diet to ratify any agreement before the scheduled date for Brexit. Brexit is scheduled to take place on March 29th and the agreement with Japan seems impossible before the arrival of this date reported the BBC. Also, there exists a wide gap in the expectations of people as regarding a trade accord.
They are not willing to duplicate the current treaty precisely in either talk for the UK to join the Trans-Pacific Partnership group or even in a bilateral deal.
The inability of the UK to strike or even
make progress on a future bilateral deal makes the struggle faces by the United
Kingdom evident. As it stands, the United Kingdom is having a hard time rolling
over existing European Union trade deals. Unfortunately, this was the goal set
out by Theresa May when she was on a visit to Japan in August 2017. Would you
say the Prime minister had failed?
It’s no longer news that the inability of the United Kingdom to strike a deal is taking a toll on a number of the companies in the country. In a recently concluded survey this week, Britain’s Department for International Trade sat down to discuss with 30 business groups. In their discussion, it was revealed that these companies are also following in this trend of not being able to replicate “most” of their EU’s trade deals with other countries around the world.
The 30 business groups that participated complained grievously about what would be the effect of this failure. Significant partners of these business groups may be lost. Such significant partners include Canada, Turkey, and Japan. A spokesperson of the United Kingdom government gave an insight into this matter when he replied to a related question in an interview. He said, “In the view of no deal Brexit, the United Kingdom is making plans to use the bilateral agreements from 29th of March or as soon as possible thereafter.”
However, the spokesperson stirred some up hope in people when he added that the United Kingdom was “putting in as much effort as possible and making good progress on securing deals”. The spokesperson gave instances of the agreements with Chile and the Faroe Islands. Regardless, most business groups are waiting eagerly for March 29th to determine the fate of many of these agreements noted the BBC.
Trade deals are only one part of what now seems an endless list of tasks in a thankless job for Teresa May. Japans patience and also insight into the adacvntages it has over the UK show that a similar situation may occur wih other nations in which the UK are in talks.
As it stands the UK does not have the power
or direction to dictate any agreements at the moment as it is still struggling
to push through the EU-Brexit deal. As the date for Brexit looms we are bound
to see more issue arising be it economic, policial or social.
On Friday Tom Espiner, business reporter for “BBC News” took to their website to announce that an agreement may have been reached by Sainsbury and Asda and that this could completely reshape the United Kingdom’s supermarket sector. Sainsbury’s and Asda are eagerly waiting for a response to know if their proposed merger can be a reality. The agreement could prove vital as both parties are looking to increase their market share soon.
If the deal should go through, Tesco, the UK’s biggest supermarket chain would become knocked form its position. Unfortunately, there is a concern that has placed this sector under serious scrutiny. This concern revolves around the fact that shoppers might be faced with less choice as a result of the Sainsbury’s-Asda merger.
US retail giant, Walmart which owns Sainsbury’s is looking to combine the second and third largest supermarket chains in the UK. A Sainsbury’s-Asda merger could make them the largest supermarket chain in the UK. As you already know, the United Kingdom has a competitive grocery market. In fact, while trying to be the biggest supermarket chain, Sainsbury’s and Asda will also be responding to pressure from other stores like Aldi and Lidl.
Richard Lim, business personnel said in response to an interview that “the biggest driver here is about scale”. For instance, if you combine the two businesses, they can request for the lowest prices from their suppliers. The idea being that if one of the two business groups is paying £10 for a tin of beans, while the other is paying a higher price at £11, both supermarkets can now settle for the lower price and pay £10 suggest the BBC report.
Mr. Lim referred to this as “Price harmonization”. He said Sainsbury’s is expecting the merger to pay off for them as they look to make cost savings of £350m. However, MPs have given a warning as regarding the effect of this merger on smaller suppliers. The small suppliers could become squeezed out as a result of the merger because getting the big suppliers to agree will be a difficult one. Regardless of the effect on small suppliers, Chief executive Mike Coupe has said Sainsbury’s would plan the use of savings from large suppliers providing a bulk of its good than squeezing out their smaller counterpart.
Furthermore, this merger would have something special to offer the shoppers as prices will drop by around 10% on many of the regular products purchased daily. However, this is dependent on the outcome of Brexit, which will determine if Sainsbury’s and Asda would be able to pass cost savings onto consumers. Critics have taken to their media to announce their dissatisfaction because Sainsbury’s has not made any information available about which products would see a fall in prices.
The employees of both stores on the other end are unsure of the security of their job. Gary Carter of the GMB union said the uncertainty being faced by members is making them worried and stressed. “People don’t know to what extent the merger will affect their jobs, ” he said. There are a number of questions left unanswered in the minds of people “Will we have a job?’, ‘Will we be made redundant?’, ‘If we have a new job or retain the existing one, who will be our new employer?” On the contrary, Asda employees are worried about their pay rate. They are unsure if they would get pay parity with their colleagues who at the moment have a higher wage rate. As the two firms combine operation, job losses are inevitable, said Mr. Lim. Largely because the motivation for the merger is to drive down costs.[
Another question that pops up in the mind of readers should be “Will they have to sell stores?”. The Sainsbury’s- Asda merger could potentially create a retail giant with over 2800 retail shops to their name in the United Kingdom. However, if the Competition and Markets Authority (CMA) decides that the merger is feasible, then it will come at a cost of about 300 stores which will be up for sale to willing competitors. As soon as the CMA’s provisional decision is made known at the end of April, supermarkets and other interested parties will be able to voice their opinions an interest.
However, should the final decision go against them, the supermarket chains may appeal the decision. Any merger especially of this magnitude is bound to influence the wider market and we are eagerly awaiting the CMA’s decision.
Seaborne freight no-deal ferry has been scrapped. In the early hours of Friday, the news broke and came as a shock, it was reported in a variety of news sources including the BBC and Evening Standard. Originally, seaborne freight had plans to launch their services beginning from Rams gate on 29 March: Brexit day. In short, the government has put a stop to its no-deal Brexit contract with Seaborne ferry company. This is because the company was left with no ships after the Irish company who stood as the backbone of the deal pulled out. Chris Grayling, the Transport Secretary has been faced with serious criticism regarding the issue.
However, in a bid to find a solution to this mishap, the
government has declared that it is in advanced talks with another ferry firm.
One of the locals, MP Craig Mackinlay said in a recent interview that for
commercial shipping from Ramsgate, this could be the last throw of the dice.
With the populace largely displeased with Mr Grayling, they have called on him
to resign or be sacked. Various people have voiced out and many have described
him as “the worst secretary of state ever”.
The alleged fake ferry service company, Seaborne Freight got the £13.8m contract in December to run a freight service beginning from Ramsgate up to Ostend, Belgium. This was in a bid to keep things running in the event that Britain leaves the EU without a deal. However, not just the secretary has been faced with criticism, even the government has had its own fair share of the blame as relayed in BMM magazine. The criticism against the government was for choosing Seaborne Freight, a company without ships and no history of trade. Furthermore, they left little time for the establishment of the new ferry service before March 29, the Brexit deadline.
Local politicians situated in both Ramsgate and Ostend have given stern warnings about the inability of the ports to be made available on the deadline. At the time the government awarded the contract to Seaborne, it was fully aware that Seaborne was a nothing but “A new shipping provider”. On Saturday, the Daily Telegraph reported that Arklow Shipping, a major Irish shipping firm, withdrew its support from Seaborne “without warning”. The withdrawal of the deal came as a result of observations made by the Department of Transport. They had become aware that Seaborne wouldn’t be able to reach its contractual requirements just after Arklow Shipping had withdrawn its support.
Following the announcements of this scrapped deal, a spokesman said: “The government is looking to secure additional freight capacity, having engaged in talks with other companies. Some of the routes which include through the Port of Ramsgate, all in a bid to prepare for a no-deal Brexit.” repoeted the BBC.
The Port of Ramsgate has not featured a regular ferry service in a number of years. Thanet District Council expressed their disappointment in the withdrawal of Arklow shipping from the deal when they said. Thanet District Council said it was in talks with the Department of Transport about the port’s role “in terms of supporting Brexit resilience”. The council has made the financial backings available as they have pumped a lot of resources into making the ferry service work again. The council was, however, planning to cut budgets before Mr Grayling decided to delay this decision. To get Ramsgate working again, it needs to be dredged as it had not featured a regular ferry service since 2013.
Following the announcement that the government has scrapped the deal with Seaborne, Mr Mackinlay, the Conservative MP for South Thanet, said a number of ferry companies have also had this opportunity over the years but none has led to anything significant. He said further speaking on the same issue that, “the deal to get Seaborne working again was potentially the last throw of the dice to give commercial shipping a chance in Ramsgate.” Andrew Gwynne, the shadow secretary of state for communities and local government, made a significant statement in recent talks with BBC Radio, he said “The inability of the government to strike a significant deal is an indication that the government has no plans for Britain in the case of a no-deal Brexit.
He said, “this is another scenario of a major problem and poor leadership in the hands of Chris Grayling who must be categorized as the worst secretary of state ever because of his huge failure to make any reasonable contribution to the growth of the society.” qouted the Evening standard.
We will try to keep you updated on any further details regarding the ferry crossing. As things stand this is only a minor issue on problems regarding Brexit and its implications.
On Thursday, the Banking correspondent of The Guardian Kayleena Makortoff reported that Barclays has been sued over high-interest rates placed on loans. The assertions of this legal claims were no longer in doubt as videos began to spread like wildfire with most bearing the same headline as this news. Political News Today; a popular YouTube Channel wasone agency whcih also reported the same story.
The BBC reported that Leeds and Greater Manchester happen to be part of the Seven Local councils rumoured to have filed a legal claim against Barclays over high-cost loans. The legal claim is such that is linked to almost £500m in complex bank loans.
Campaigners and Shadow Chancellor, John McDonnell have taken up the issue of high-interest rates placed on loans and the use of high-cost loans have been placed under fire ever since then. The Guardian reported that Chancellor John has made comments criticising the use of high-interest loans and there effect on local councils and the services that can provide.
The terms of the lender options borrower option loan(Lobos) is the section of the loan transaction between these councils and Barclays to receive claims lodged to the high court. Having offered several Lobos, the particular lobo offered by Barclays which these councils seem to be fighting against dates back almost 11 years ago between 2006 and 2008.
The claim filed by these councils centres on how Libor, the interbank lending rate influenced the interest rates on the loans taken by the Seven parties involved. Since the banking crisis, Barclays exists among the list of lenders that have been fined for being involved in Libor rigging noted the Guardina and BBC. The councils when making their statement said they were fully aware that the banks knew customers would rely on Libor rates, which has caused Barclay’s accusations of lowballing when making the decision whether to enter into contracts or not. However, Barclays then has the power to increase the interest rates over the lifetime of the Lobo loans as a fragment of the central terms which all parties agreed to.
Unfortunately, the councils want to play safe as they have not made demands on a specific financial figure in the court filings submitted. However, the councils seek the go-ahead and approval to exit existing loans without having to pay hefty fees and the refund of sums paid as regarding the Lobo loans. In fact, the councils are hoping this extends to the interest payments as well as other costs reported the Guardian.
The legal case that was filed was done on behalf of councils in Leeds, the Greater Manchester combined authority, as well as other councils like Newcastle, Oldham, North East Lincolnshire, Nottingham, and Sheffield. According to data collected through freedom of information requests by the Debt Resistance UK campaign group, in total, these seven councils are believed to have incurred loans up to £573m in Lobo loans from Barclays noted the BBC.
Based on the findings made by The Guardian news agency we understand that all the claims of the councils are related to loans that account for an important portion of the total sum. This doesn’t come as a surprise because Lobos were popular among councils in the early 2000s because of the effective business strategy of Lobos, as they came with teaser interest rates that kept payments low in the short run. However, they became costly in the long run as a result of austerity and wider spending cuts which took place.
The scheme otherwise called Libor rigging was such that allowed the loans that banks have allowed them to raise interest rates at certain points over their lifetime. This increase is only accounted for by the “lender option” of the loan agreement. Although borrowers had the option of refusing to accept these terms, it would automatically trigger a clause forcing them to repay the loan in full and immediately noted the Guardian.
In 2016, Barclays stopped using Lobos by turning them into
fixed-rate loans, however, the interest rates were not necessarily affected and
breakage costs only got slightly decreased.
An activist with Debt Resistance UK, Joel Benjamin, said Debt Resistance was “inspired to see local councils taking legal actions against Barclays as related to Lobo loans. He said the Lobo loans has resulted in hundreds of millions of pounds being skimmed from hostile town hall budgets – 7years on from Barclays and a cartel of global banks being fined for conspiring to rig Libor interest rates in 2012” quoted ftom the BBC.
Barclays has since refused to make comments due to the
ongoing legal proceedings and are looking to avoid unnecessary issues.
On Wednesday BBC News announced through their online news outlet that Tesla: the well-known automobile icompany recorded profit in its business sales despite recent issues the company has faced.
The BBC noted that in the three months to the year-end on 31st December 2018, Tesla recorded a profit of $139.5m (£106.4m). These numbers show Tesla has successfully evaded recording a loss for the second quarter in a row. This doesn’t come as an easy feat considering the rate at which closures have been made and record losses are being recorded by other major companies.
It is widely believed that the profit are lower than what was expected, however, the gain still marked an improvement for the electric car-maker. The marked improvement is as a result of the routinely reported shortfalls in recent years which the company appears to be turning fast away with its recent success story.
Earlier this year, on the 7th of January, it was reported in Arstechnica that Tesla opened its first factory outside of the United States. Despite this, the electric car-maker also made a reduction in their number of employers. Although a year that began with mixed feelings, CEO Elon Musk has steered the boat in the right direction. The BBC noted that recent profit recorded was credited to the strong demand for the Tesla Model 3, which features new manufacturing improvements. Furthermore, the recent cost cuts were also recognized to have played a big role in the company’s turnaround.
Tesla forecasts even stronger growth, with the rate at which the Model 3 is being requested in Europe and China, when sales started.
In a recent interview Technology entrepreneur and engineer, Elon Musk identified the sole problem being faced by this ever-increasing demand for the Tesla Model 3. That being that deliveries may slow in upcoming months. This he attributed to the time it takes to ship vehicles to other countries from production sites.
“That stands to be the company’s biggest
challenge,” Elon Musk, CEO of Tesla Motors said. “The problem we face
has nothing to do with demand rather, it’s our supply and how we respond to
this ever-increasing demand, how fast we can make delivers to where these cars
The challenges seem unsurmountable coming from China; one of
the major markets for electric vehicles. Recently, China has been busy with
high-stakes trade talks with the US. Tesla could be looking at higher tariffs
Should the two countries fail to reach a deal.
In fact, Elon Musk seems to be in the dark as to how the deal will turn out. In a recent interview where he was responding to these claims “We don’t know where the deal will lead to… so it’s very important to get these cars to their destinations as soon as possible”Mr Elon Musk said.
In a bid to meet up with demands on the uprising, Tesla said it is looking at delivering 360,000 to 400,000 vehicles in 2019. These figures show a growth of around 45% to 65% compared to that recorded in 2018. Elon Musk said “The best way to hit these targets is to set up a new factory in China, ensure it is up and running by the end of the year”. On a call with financial analysts, Mr Elon Musk made appreciative comments to the Chinese government for yielding to Tesla when they requested the permission for constructing the plant Reported both CNBC and the BBC. Musk described the Plant as what he called the first in the country that is solely owned by a foreign company.
Mr Elon Musk said he has strong faith in the move as he said
it was “representative of them wanting to make the market as open as
Mr Elon Musk also used the medium to announce that the
firm’s chief financial officer Deepak Ahuja would be retiring. However, the
retirement doesn’t send him out of Tesla as he would continue to serve as a
“senior adviser” for many years to come. It’s no doubt that Tesla was
under intense pressure last year, as it has to invest a lot in a short period
of time basically to improve production. This was also in a bid to deliver its
latest car to the rightful customers.
However, in a comforting statement, the firm described the
manufacturing issues the companies have now as “stabilized”.
Numbers don’t lie, as we see in those recorded in the most recent quarter. Tesla recorded about $7.2bn in revenues and this was solely from car sales. This figures recorded surpasses that of the previous year as it was double the same recorded at this exact period in 2017. Another similarity between the two production years is seen in the operating expenses. Operating expenses for 2018 was reduced by 7% from the quarter before, to about $1bn as compared to the one recorded in 2017. The decrease observed in the operating expenses follows the announcement of thousands of job cuts earlier on in the year, including about 3,000 that was announced in January noted CNBC.