GATT24 Not An Option

The current Hard Brexit debate centres around the use of GATT24 to avoid a Hard Brexit – that is crashing out of the EU and all the trade deals we are a party to as part of the EU.

Article 24 of the General Agreement on Tariffs and Trade (GATT) states, “……shall not prevent as between the territories of contracting parties, the formation of a customs union or of a free-trade area or the adoption of an interim agreement necessary for the formation of a customs union or of a free-trade area…”

Under Article 24 parties to an agreement have a “reasonable length of time” to negotiate a deal. Under Article 24, this should only exceed ten years in exceptional circumstances.

If the UK crashes out on 31st October 2019, (or any other date) the UK will default to World Trade Organisation (WTO) trade terms.

Under WTO law, you must treat the goods of all members of the WTO alike – known as the Most Favoured Nation (MFN) obligation. This would mean the UK has to treat EU goods like those from China, for example. This includes imposing the same tariffs.

However, there are exceptions to this obligation – this is where GATT24 comes in. It allows WTO members to conclude Free Trade Agreements (FTA). Under an FTA parties could agree to better trade terms than those between other WTO members – a sort of club-within-a-club arrangement. A good example of this is the EU deal with Norway their FTA is called the European Economic Area (EEA).

However, under GATT24 other WTO members can object to a proposed FTA agreement between the UK and the EU.

Conclusion

1. GATT24 requires both the UK and EU to agree to do a trade deal. Given the current impasse, this seems highly unlikely.

2. The EU will want to avoid offering a generous FTA agreement to the UK that mirrors to the current single market agreement – after all, what would then be the point of the single market if it can be undermined?

3. The current members of the European Economic Area (EEA) seem very reluctant to have the UK join them. They have a deal that works and does not wish to have the UK with its “reluctant European” nature mess things up for them.

4. If the EU even wanted to offer a generous FTA with the UK – if it did other WTO members might be tempted to seek the same from the EU. This is a can of worms the EU will not be opening.

GATT24 is not the magic wand or a silver bullet; some Brexiteers have already admitted this. After much wishful thinking and wilful posturing, time is running out for the UK. Crashing out would likely lead to a recession on the scale of 2008 – or worse.

The alternatives remain – the current negotiated deal or a second referendum.

Whatever route the UK goes down people need to make hard-headed commercial and political decisions – arguing about sovereignty is not one of them. We have a parliament, and we vote for the MPs who sit in it, as we do with the European Parliament. We are a sovereign nation – it’s our democracy that is damaged.

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Danny Baker, Shoots, Misses, Fired

The BBC has just fired Danny Baker for his now deleted tweet – a picture of a couple with a monkey dressed up in a suit with reference to the Royal birth. His explanation rings hollow – as the intent seems clear.

He appears to be relying upon the usual excuse of honest mistake or misinterpretation. We should now expect the usual “counter-argument” about “freedom of speech” being curtailed.

His contract with the BBC would have contained a clause relating to bringing the corporation into disrepute. It would not be enough for him to state or provide a disclaimer that all views are his own, or words to that effect. The BBC is paying his salary, and this is a racist tweet directed at a member of the Royal Family.

Other “talent” and general employees should note that such disclaimers provide little or no protection or cover against being disciplined or dismissed. It is true that a regular employee may well have been disciplined – but a “talent” contract is quite different from a regular employment contract. Danny Baker is likely to have been treated as a third-party contractor, and his contract would have been clear. This is not a gaffe – it is a clear and pretty unpleasant attack on a young mixed-race couple with a mixed-race baby – who also happen to be members of the Royal Family.

The BBC acted swiftly and decisively because they had no other course of action open to them.

People are rightly pointing to double standards at the BBC, given their reluctance to act against other talent, such as Sir Alan Sugar for his dubious tweet on another occasion.

This can be contrasted with calls for Gary Lineker to be dismissed for his vocal support of the Remain campaign. Providing a political opinion or support is not a breach of the law – as long as any tweet does not seek to incite or support a criminal offence and the party is a legally recognised one that does not advocate extreme policies – all is ok.

Danny Baker is an intelligent man – he must have known the connotations and decided to play the race card anyway. The red card was the only option. He may well find himself on the bench for some time.

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Feudalism & Tribes

This is an odd blog post, but something to ponder.

As most of us can feel our society in the UK and most other countries we can think of are divided and disjointed.

We have Brexit, the far-right, the far-left and nothing much in the middle. Growing income inequality is undermining society – as the 1% and in particular the 0.01% is getting richer the economy they rely upon for the continued wealth and stability is coming apart at the seams. Those at the top appear to be happy to point this out, but only offer piecemeal solutions. They conveniently avoid thorny issues such as international tax regimes purpose-built to benefit them, a fundamental refusal to acknowledge income inequality, low wages, long hours and low productivity. The only solution to them appears to be the mantra of “996” – 12 hours days, six days a week. Let us be clear “996” is the very essence of exploitation, particularly as it’s chief proponent (Jack Ma) is now living in semi-retirement at the tender age of 54.

In the short-term the 1% seem to have responded by paying more for security – Facebook spent $20 million last year protecting Mark Zuckerberg from threats, up from $7 million the previous year.

Protection is an immediate, but ultimately, short-term response to threats – both real and perceived. Some of these threats would be made regardless of the state of the economy and society. However, in a fractured society and a weak economy, the threats grow.

At some point, the threats outweigh the benefits.

It is interesting to see Ray Dalio founder of the hedge fund Bridgewater write a blog post about wealth inequality and the threat to the American Dream. As pointed out by others, his company has benefitted from investing in low-pay industries, such as fast-food.

If wealth inequality stayed at its current (unacceptable) levels, it could be tackled. However, as pointed out by Mr Dalio inequality is entrenching itself, exacerbating the problem and increasing year-on-year. Once the 1% own or control 99% of wealth the only market left to them will be their own 1% – no one else will have any money to buy anything. In the end, the system will eat itself.

With all this said we are still waiting for change.

After the 2008 financial crisis, the 1% received their bailout, and the rest of society assumed the debt and will carry on paying off that debt for decades to come.

This debt burden has inevitably caused governments to reduce spending and investment – retreating to cover only the essentials. Governments appear unable or unwilling to increase spending on health and education – both of which are critical areas for future stability and wealth in society.

We are now living in what could be described as a “governmental vacuum”. Governments have become less about governing countries and more about preserving the status quo and protecting the system that has caused inequality. The 1% will almost always have the ear of those in power – partly because they helped them get there.

However, into this vacuum step those promising easy and quick solutions. People, who say they understand and that if people follow them things will get better, people such as Donald Trump and Nigel Farage. These so-called “men of the people” are anything but – they see an opportunity for power and influence. Their methods and messages owe more to 1930s Germany than the 21st century.

As we become increasingly polarised into tribes, there is the potential for extremism to flourish, organised online and beyond the control of governments and even those that seek to harness and possibly exploit it.

There is a genuine risk that we are heading for a very uncivil society – we will all be losers, but those who lose the most will be the ones who currently enjoy the most.

Reinvesting in our societies is the only sensible long-term strategy open to us – and it must be across all racial lines – starting from the bottom upwards to the middle class.

The kings of capitalism are finally worried about the growing gap between rich and poor

Why and How Capitalism Needs to Be Reformed

Blackstone CEO blames gap between rich and poor on income ‘insufficiency’

Median wealth of black Americans ‘will fall to zero by 2053’ warns new report

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The Brexit Political Vacuum

As Brexit slows and starts to stall the 2016 referendum seems a long way away. Trade deals have proved elusive as other countries wait to see our fate – and then strike a bargain with an increasingly desperate government. Very few of the deals the UK eventually signs will be as good as our current trading arrangements – and none of them will be better.

The fundamental misjudgement made by the government is to think this is all about trade. It is more of a misunderstanding than a misjudgement. The EU is about much more than trade. The EU is about peace, cooperation and security. Trade is one of the key aspects of the European relationship, but it flows from the core principles, the core principles make it possible.

We were told that the German car industry would still want to sell 800,000 cars a year in the UK – and they do. However, Chancellor Merkel informed her car industry to make plans to sell more cars elsewhere. The German car industry responded not by complaining, but by accepting this. Like others in the EU, they understand that much more is at stake than fancy tin boxes with metallic paint. The German national psyche is one built around society and teamwork. This can be contrasted with the individualistic approach in the UK – an approach that allows key Brexiteers to wrap themselves in the Union Jack, but at the same time make quiet fortunes shorting the Pound and betting against British companies, (and in effect their employees). Many leading Brexiteers have made money from the chaos while posing as defenders of the people and parliament. Some in that camp have been less circumspect – having supported Brexit they appear to have had a change of heart, or at least jurisdiction. Some people blow hot air, and they suck – quite a skill.

The government has already been forced to ask the EU for more time. However, instead of using that precious time to build a consensus and deliver the next stage of Brexit, the government has stuck to the same lines – and even blamed MPs for this failure to govern. Now that MPs are attempting to gain some direction and control the government has responded by saying that they are free to ignore parliament and will continue to do so. We have a government that cannot pass legislation and one that sees no need to listen to those that could.

A general election would be a mistake – only adding to the delay and uncertainty. However, the current Prime Minister has deliberately and stubbornly blocked any progress, attempting to keep her party together – regardless of the political and economic cost to the country.

As a change of leadership style is highly unlikely, so a change at the top is required. Her replacement could and should be from the saner spectrum of the party. The alternative to this would be a government of national unity – something reserved for times of war or a severe crisis. We have already reached that point.

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The Bercow Blinder

So the dust is settling (though not the tempers) on John Bercow’s decision to allow an amendment by Tory MP Dominic Grieve. The amendment means that the government now needs to present within three working days a Plan B – should the government’s Plan A be voted down by the House of Commons on January 15th.

It looks almost inevitable that the so-called “meaningful vote” will be defeated. However, it is important to note that we got here because the government pulled the vote before Christmas at the last moment and without any warning. The government wants a winnable vote – not a meaningful one. At the time Speaker Bercow did say that the decision to delay the vote at such short notice was a discourtesy to the House.

It now looks as though Speaker Bercow is on his way out; he knows this already and is prepared to go out defending Parliament.

It is odd though that one of the central planks of Brexit is about “taking back control” and “making Parliament sovereign”. When the Speaker does just that Brexiteers throw tantrums and mutter darkly. It can’t be both ways.

The fact remains that the EU has never been and will never be a threat to UK sovereignty or to the UK Parliament. The current threat remains a minority government using every trick in the book to get its way.

Speaker Bercow intervened when it had become obvious and intolerable that the central government tactic was to run down the clock to 29th March or as close to it as possible – effectively blackmailing Parliament.

These tactics are to be expected – however, the continuing damage caused to the UK economy does not appear to matter to some in Westminster. A look at the news today regarding job losses and poor Christmas trading shows the real issues facing you & I.

The truth is that the government has treated MPs with disdain and the economy as collateral damage. It is right for MPs to take back control – to retake sovereignty.

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The Brexit Political Declaration

The Brexit Political Declaration has turned up just in time for Christmas – it has all the rigour of a Christmas present list written to Santa.

The reality is that all the key points have been booted into the long grass at least a year from now. The only point of actual agreement appears to be is that Christmas is coming and everyone is exhausted by this 2-year and counting divorce. The parties have decided who is going to get the cutlery, but not what will happen to the kids, the house, the mortgage etc. – basically all the important parts.

Goods – it appears the UK will only have access to the EU if it respects EU standards on competition, tax, the environment, and social and employment protection. This is done to prevent the UK from undercutting the EU – which is what the Brexiteers had in mind.

Fishing – there still needs to be an agreement on EU access to UK waters, it could be that British caught fish will be prevented from being sold in the EU without a deal. This is not all bad news; we are just going to have to eat more fish.

Financial Services – passporting is going, it will be replaced with “equivalence”. This is a stricter test, under the agreement it can also be withdrawn with just 30 days notice.

Northern Ireland Border – the addition of a new technological solution paragraph marks the return of “magical thinking” eliminating the need for a physical border and customs – as if Ireland didn’t have enough leprechauns already.

Gibraltar – the Spanish government, has stated they will not agree on any trade deal unless Gibraltar is excluded from it. This appears to be a move to isolate Gibraltar from the UK and make it even more reliant upon Spain.

Breaking up is never easy, but only a sane person would question whether going ahead with this break up is worth it. This is not exactly a quickie divorce, we are not even leaving the house – we are living in a tent in the garden.

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The Brexit Endgame

So here we are, after two wasted years of bluff & bull, the time has run out for the government. A deal must be done – and it looks like it has been done, or it could be.

Regardless of where you stand on this fight, (and it has been a proper street brawl at times) the deal done by the government will not satisfy the remainers or the brexiteers. It will also be a substantial downgrade from our existing arrangement, full EU membership.

As a country, we will have to remain aligned to and follow EU rules, but without the power to inform influence and vote on them. Rather than an equal place at the table we will be relegated to a side table and given the kids’ menu.

Many MPs have made a career out of moaning about the EU, they will have even more cause to complain now, and ironically no recourse to do anything about it, no MEPs, no mother-of-all-Parliaments diplomacy.

For those naive enough to think this will be a temporary transitional situation – think again. This situation could very well become permanent; as the EU has absolutely no incentive to offer the UK some favoured-nation status. In fairness to the EU, they have clearly and unambiguously stated this for the past two years.

The UK risks being stuck in this limbo and humiliated for a generation.

For those deluded souls who pine for a hard Brexit, they continue to cling to it. They will forever say Brexit was diluted, or never delivered, that the people were defrauded and duped. This is a bit rich coming from people who lied openly and repeatedly about the sunny nirvana awaiting the UK with all the wonderful trade deals just ready to be plucked from the abundant tree of commerce.

The reality is that other blocs or nations negotiating with the UK know we are isolated and desperate. They will be queuing up around the block to stuff us and inflict chlorinated chicken and hormone filled beef on us. Other countries will just eye-up our ever-lucrative market and salivate at the opportunities awaiting them. (In the past carmakers have called the UK “treasure island” because of the prices they can inflict upon us). The irony is that the EU played a significant part in ending this exploitation of the UK consumer – particularly by European carmakers.)

What awaits us after a hard Brexit can already be seen at the WTO. The UK assumed it could hive off a proportion of the tariffs enjoyed by the EU to fast-track a tariff deal with the WTO. However, twenty nations, already full WTO members objected to this, stating they could lose out on access to the UK market. Those nations included Russia and New Zealand. So, there are trade deals to be done, but they are likely to be wincingly one-sided – in our hour of desperation, we become easy prey when separated from mother Europe.

So, if the May deal is not as good as we currently enjoy and gives us no say or stake and hard Brexit is even worse – we have to ask why leave?

The UK has every right to stay at the EU top table – we built it – the hard way. The EU came into existence after this country (and our esteemed allies) fought and defeated fascism. This is recognised and acknowledged by everyone within the EU.

Some people seem to forget that the war was won by a coalition of countries, all cajoled and persuaded by the British government. The UK has always worked best by working with our friends and allies. The blood on the beaches of Normandy has barely dried, and we are retreating from our historical position of power and influence.

We can and should remain central and fully engaged members of Europe to shape it more to our own image, besides, the rest of Europe still wants us, and probably needs us.

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Time To Google Equality

So it turns out that Google is no different to other large companies where mainly privileged men hold the majority of senior posts – and look out and look after each other.

The revelations seeping out of Google are a major embarrassment for the tech giant – all the corporate fluffiness can’t rid Google of this problem. This is more than an image problem – when your own employees walk-out in collective mass protest – you have a problem. The desks and conferences rooms are empty, but the streets outside are full.

The New York Times broke the story, which centred around Andy Rubin who was effectively rewarded for sexual abuse with $90m in a payoff on top of the millions already earned and granted. Google also went on to invest in his next commercial venture.

The New York Times also highlighted other cases of senior male employees abusing their positions of power. In all of these cases, the women were believed, but they were also prevented from going public, were sidelined and in some cases left Google.

Google used “arbitration” clauses in employment contracts to prevent employees from suing or going public. These were in effect legal gagging orders that served to protect the abuser and Google.

The mass-protest – Walk Out For Real Change lists five key goals:

1. End to forced arbitration in cases of harassment and discrimination.

2. A commitment to end pay and opportunity inequity.

3. A publicly disclosed sexual harassment transparency report.

4. A clear, uniform, globally inclusive process for reporting sexual misconduct, safely and anonymously.

5. Elevate the Cheif Diversity Officer to answer directly to the CEO and make recommendations directly to the Board of Directors. In addition, appoint an Employee Representative to the Board.

None of these five points is difficult to achieve and are certainly not doing anything more than following EU employment law and best-practice in the workplace.

So, we would like to add our own little list:

1. Revised and simplified pay, bonus and stock structure with employees paid on the basis of their seniority of role. So, a senior manager in engineering will be paid the same as a senior manager in the accounts department – including bonuses and stock – this is important. This should apply right the way down the flattened structure, so newcomers get paid the same, and this remains so through their Google careers.

2. A more open, inclusive and diverse recruitment process, and internally the same for promotion, training and other opportunities.

3. A man and a woman doing broadly the same job or at broadly the same level within the company should be paid the same and have the same conditions of work. The women should be brought up to that level, not the men levelled-down – as happened at the BBC.

4. Equal pay, bonuses and stock back-dated for a minimum of five years. Any inequality in bonuses and stock magnifies and entrenches the overall pay differential – all the way through to possible severance pay and pensions. This means a Google woman could work in the same role as a Google man for the same number of years and still leave substantially poorer than the man.

Google simply cannot fudge this – it is the perfect opportunity to show leadership. It also sends a powerful message to current and future employees that Google can be a positive force for change. It also helps in recruitment and retention, which in turn gives Google a powerful and persistent commercial advantage over rivals.

If Google does not change it consigns itself to being just another tarnished tech company. After all do the founders want to wake up one day and find they have become just like Facebook?

The New York Times

The Guardian

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The Gay Cake Case

The Gay Cake Case, also technically (and correctly) known as Lee (Respondent) v Ashers Baking Company Ltd and others (Appellants) (Northern Ireland).

A final (and unanimous) decision was reached by The Supreme Court in London on 10th October 2018. The court found for the bakers Ashers.

The bakers had refused to produce a cake for Mr Lee with the message “support gay marriage”. Mr Lee had previously ordered cakes from Ashers, (but without this message). Ashers took the order, but then subsequently refused the order, due to their committed Christian beliefs.

The cake then became a case – Mr Lee supported by The Equality Commission for Northern Ireland brought a claim for direct and indirect discrimination on the grounds of sexual orientation, religious belief or political opinion.

Mr Lee won the first round, Ashers then appealed and lost on appeal. The Attorney General for Northern Ireland then referred the case to The Supreme Court.

The Supreme Court found that Mr & Mrs McArthur, the owners of Ashers did not discriminate against Mr Lee personally – they objected to the message because it was contrary to their religious beliefs – which can also be protected. As the court stated, “The less favourable treatment was afforded to the message, not to the man.”

This has proved to be a very expensive cake.

We would argue that the facts of this case a fairly unique and the judgment is actually quite limited in scope.

The argument now goes that discrimination because of your religious beliefs is ok. No, it is not. Mr Lee was not discriminated against; the objection was to the message.

It should also be remembered that religious beliefs still have a significant hold on society in Northern Ireland – this is partly for political reasons. Northern Ireland is also behind the mainland UK regarding gay marriage and equality, and will probably remain out of step for quite some time.

We would argue that if this case was brought by parties in another part of the UK, the decision may, (but only may) have been different.

The bottom line is that if as a business you offer a service be prepared for it to be used in different ways. The way to run a business is to provide the same service to everyone.

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How To Survive Meeting Hell

Meetings…we have to ask why?
It seems to be that when nobody wants to make a decision, or they do, but they want cover in case it goes wrong…they have a meeting.

The more significant the decision the large and longer the meeting. There is even the likelihood of pre-meetings ahead of the main meeting and post-meetings to dissect the result of the main meeting (if any).

I was talking to someone recently who said he could not get any work done because he was always in meetings…about work.

About work…rather than just doing the work.

His boss had set up a series of committee groups – this seemed like a good idea – except that it was not. The suspicion was that these committees gave the boss cover. If something went wrong, he could blame the committee in charge.

I then decided to waste even more time reading about how to effectively run meetings – a sort of LinkedIn Guide To Hell.

I will keep this post short because I am sure you have a meeting to go to.

I have come up with an almost foolproof way to conduct meetings and get stuff done.

1. Set a definite time limit for the meeting, (subject to a maximum of 30 minutes – see 2 below). Once that is done…halve it.

2. For any meeting that goes over 30 minutes. The person who called the meeting and is supposed to be running it buys everyone coffee & cake. This is important – do you want to run the risk of buying for 5 people or 50? Keep meetings small. If the meeting goes to 5pm, those present can elect to have their coffee & cake the following day – because we all have lives to go to.

3. Use Basecamp or Slack…before, after, or as a replacement for meetings. You can thank me later.

Other additional strategies can include going directly to the coffee & cake and holding the meeting in the queue, and for no more time than it takes to consume your beverage and cupcake of choice.

See simple.

As an endnote, please do not link to this wisdom from any social media…life is too short for “inspirational insights” – we all have lives to go to.

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