Reader “Summers” from South Wales sent an email reply to my post Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan.
Summers has additional ideas on negotiation tactics that will hit Germany where it hurts, if necessary.
Summers writes …
Theresa May will be the PM. I do believe that she will be true to her words “Brexit means Brexit!”. I read your article “Precise Way to Start Negotiations with EU Mules: Get France to Piss and Moan” just now with great delight.
The UK is already hitting on multiple fronts. You might be interested to know that Chancellor Osborne is currently preparing the way for new international trade arrangements with the US and Asia.
Then you have Theresa May’s speech today – she is hitting on all cylinders. As we all know, the idea of unions is dead and gone – there is simply no purpose for them in the modern world. However, ensuring that employees and customers are represented on the corporate board and making shareholder votes on executive compensation binding (rather than advisory) will go a long way to making corporations much more accountable (see John Lewis – one of the consistently best performing companies in the UK – for these concepts in action). May is proposing to change investment patterns in the UK to draw money out of property and into more productive activities (this is actually easy to do as property is very much tax-advantaged in the UK). What I found most interesting however is that she does not want to focus on national financial targets (aka austerity) but instead on productivity. Pure genius if she can do it – this will certainly get focus off Wall Street (or The City) and on to Main Street.
In addition to the corporation tax issue, as you have described in the referenced article, the other place to ‘kick’ Europe is auto imports. Prime Minister (Elect) May should go to Europe proposing import quotas on European cars as a bargaining position (a cursory look around Britain reveals that only about 2 of every 10 cars here are British made – most of the others are from Europe). I am sure that Asia/US would be happy to pick up these markets, and this may be one reason Osborne is there now.
I cannot help but think that this must be Europe’s worst nightmare. Consider the average European as they watch what is happening in the UK – thinking – why can’t we do that? Imagine the pressure Merkel and Hollande will get from their auto manufacturers – during an election year!
The UK has the clear advantage in these negotiations as I have stated all along.
As prime minister, May’s first priority is to address the UK. The second thing she should do is pick up the phone and give her majesty Angela Merkel and Francois Hollande notice of who has the upper hand and why.
Threats of a nice auto import deal with the US and Japan combined with tariffs on French and German cars just might ring a bell in the dense heads in Germany and France.
Here’s my favorite quote of the campaign (before Andrea Leadsom dropped out).
“Ken Clarke says I am a bloody difficult woman. The next man to find that out will be Jean-Claude Juncker.” – Theresa May – July 2016.
Here’s some notes on Kenneth Clarke from Wikpiedia.
Kenneth Harry Clarke (born 2 July 1940), often known as Ken Clarke, is a British Conservative politician who has represented Rushcliffe in Nottinghamshire as a Member of Parliament since 1970.
Clarke has been described by the press as a “Big Beast”. He served in various British Cabinets as Chancellor of the Exchequer, Home Secretary, Lord Chancellor and Justice Secretary, Education Secretary, Health Secretary and Minister without Portfolio. He has been the President of the Tory Reform Group since 1997.
Clarke contested the Conservative Party leadership three times – in 1997, 2001 and 2005 – being defeated each time. Opinion polls indicated he was more popular with the general public than with his Party, whose generally Euro-sceptic stance did not chime with his pro-European views. Notably, he is President of the Conservative Europe Group, Co-President of the pro-EU body British Influence and Vice-President of the European Movement UK.
Clarke’s time as a Cabinet Minister is the fifth-longest in the modern era, having spent over 20 years serving under Prime Ministers Margaret Thatcher, John Major and David Cameron.
Clarke’s pro-EU stance did him in each time. Rightfully so. More importantly, any threat to be difficult with Juncker is a huge feather in May’s cap.
First Step in Training a Mule
There’s an old saying: “The first step in training a mule is to hit it as hard as you can in the head with a stick.”
I don’t really advise that with mules, but it is the precise thing to do to EU nannycrats.
I am a huge free trade advocate, but others aren’t, especially the EU nannycrats.
Working out trade deals with the US and Japan, with appropriate threats on Germany and France will be a second badly needed slap in the face to the EU nannycrats who think they are in control, but aren’t.
- Stellar Opportunity for UK to Set Example for the World
- Can the EU Survive as a Prison? Who Has the Keys?
- “Italian Gov’t Collapse More Than Just a Possibility”
- Four Countries Blame Jean-Claude Juncker for Brexit, Two Seek His Ouster
- Merkel Ready to Boot Juncker?
- Ireland’s GDP Up Stunning 26%; Expect France to Whine
Mike “Mish” Shedlock
On point as always!
donald england said:
every time i see your comment on mules i am surprised to see you running with the common lot and voicing their superstitions. mules are not actually stubborn; it is more that they have far more common sense than horses and if they see possible danger they will simply refuse to go on. you can run a horse to death. not a mule. pick on somebody else.
Congrats to the UK — they seem to have found a very competent leader, on one week’s notice after a “surprise” (for the establishment anyway) resignation of the ex-PM.
When reading “Summers” email, I read the last paragraph:
“Consider the average European as they watch what is happening in the UK – thinking – why can’t we do that?”
Consider what the average US CITIZEN is thinking as we watch the UK. We have a first-rate treasonous woman running against a reality TV guy.
England got rid of their idiot, found several qualified candidates, and found what appears to be a really good candidate, a woman to boot (it shouldn’t matter, but does to democrats in the US). All inside of two weeks, with a population 1/5th that of the USA.
WHY CAN’T THE USA DO THAT?
When Howard Dean went berzerk on TV, the Dems replaced him last minute with (another) loser. They could have found someone else. They could find someone else now that it is obvious Hilary committed treason and perjury.
The Republicans could have found someone who isn’t a loser — instead they ran the same batch no one liked four years ago. Trump is the only new name mentioned. Instead of the Koch bros and whomever saying “anyone but Trump” — why can’t the get someone else?
Anyway, I am happy for the British. Just embarrassed to be American. An alleged super-power should be able to do better than a corrupt traitor and a TV personality (ok, he does real estate sometimes).
David Cameron (remain) passed the the PM crown to Theresa May (remain) well ahead of his projected exit as PM in October, after the Axecutive Order King Obama warns the UK voters not to F**k up his TPP scheme… what could possibly go wrong? Expect King Obama to be spending a lot of time with Fuher Merkel and her monkey suited Hollande… my guess is they will find the best way to convince Britain to take another Brexit vote after they discover some ingenious massive penalty scheme for actually leaving.
If the EU offered a refund policy (that they might withhold?), a lot of other countries would have Brexited already. The EU has nothing meaningful to with hold, anything they might try to cut off from England would cost the EU far more.
There will be more Brexit votes — in France, in Spain, in Italy, in Netherlands, in Poland… eight EU members have political candidates pushing for exit referendums.
The crooked establishment is out of credit and out of credibility
And while citizens and police murder each other in the US, Obama is busy admiring himself.
Getting Obama’s Toilet Paper Plan (TPP might as well stand for…) past politicians is not the same as getting it implemented in reality. Politicians want to be bribed in cash, while they give voters a worthless IOU.
Just remember Obama’s promise: “If you like your current healthcare plan, you can keep your current health care plan”
That is what his trade plan is really about. Screw you little people.
I’m perplexed that the big money boys in Brussels haven’t turned Brexit into a huge fictitious crisis like Hanky Panky Paulson did with TARP in 2008. No threats of “tanks in the street” across the pond, at least not yet. The markets dipped for a few days then bounced right back. This must be very frustrating for Merkel, Hollande and their handlers. Money bags Merkel has the most to lose. She must be fit to be tied.
I have a heightened respect for the older generation Brits who pushed the Brexit vote across the finish line. In most cases (not always) wisdom is a byproduct of age. Young people are generally stupid – and that stupidity has no international boundaries. The young people in America are just as stupid (eg. Bernie Sanders supporters).
I worked with the Brit military and found them to be very grounded and good people. Some were wound a little too tight and way too formal for my liking (until they had a few beers under their belts). But good and decent people they were. I’m stoked that they took their country back.
But Brexit isn’t out of the woods yet. Never underestimate the ability of the New World Order to sabotage a good thing for the little people.
Maybe you haven’t noticed Paris is still under martial law — has been for months. There are tanks and soldiers in Paris streets. One group of crazies from NATO dropped bombs on other crazies (ISIS) who were killing people with weapons NATO took from Libya and gave to ISIS…. so then the other crazies (ISIS) attacked Paris. Paris is under martial law, and neither group of crazies has been effected.
Germany had a massive riot over the weekend, with 4000 left wing crazies attacking unarmed citizens (don’t confuse this with the right wing crazies on other weekends). Merkel’s own party was defeated in her home state in midterm elections. Heavily armed Polizi are a regular fixture in Germany now.
And every EU loser-crat who could find a TV camera did pull a Hank Paulson in the days leading up to the vote. Warnings of the sky falling were everywhere.
Ordinary people couldn’t see or hear the fabricated warnings — too many SWAT teams and combat soldiers and loud armored personnel carriers in the way.
“ensuring that employees and customers are represented on the corporate board and making shareholder votes on executive compensation binding (rather than advisory) ”
Good old Orwellian doublespeak in Number 10 Downing Street, from this female Cameron clone. Sounds like Theresa May cannot wait to squander all the Brexit advantages by making British corporations more strait-jacketed than France, Germany or the EU. A recipe for dysfunctional corporations, whose real focus will be “social goals” and “regulatory governance requirements” rather than productivity. Might as well hang out a banner telling corporations to “Go to Ireland.”
British corporations will be as riven with conflict of interests as great as those besetting Chicago government, if May’s rhetoric becomes reality. Customers on boards of directors and employees on boards of directors makes no sense, even if it might work for a few companies, because one-size does not fit all. Been tried before, this tired old “government knows best” paradigm.
Companies and their managements (boards) need to be separate from the unions (employees) and customers for setting prices and wages. Otherwise, it is like public employee unions negotiating with local and state governments to set their own pay. Britain clearly needs new leadership, not Fabian socialist retreads from the old Keynesian Bloomsbury school that sank the economy in previous incarnations. But might strengthen UKIP and Ireland.
The real problem is that the mule is cornered and forced to react. Talks about exiting the EU in every EU member state, are either dismissed as nonsense or addressed with fear-mongering of the “the world will end, we’ll be destroyed and the sky will fall” type.
A prosperous non-EU UK, is the real nightmare in Brussels right now because it sets the “wrong” example. They must make the “correct” example of the UK, not for UK’s sake but for scaring their own citizens.
As it is said, in every crisis is an opportunity. The crisis in 2008 was such but unfortunately the world did not have leaders who had the ability, gumption and the interest to turn it into an opportunity and make the world a better place. If May turns out to be as good as she seems to be (the way she is talking), I feel ‘Rule, Britannia!, Britannia rule the waves’, it is going to be. But having seen so many politicians come and go, hoping that someone will work for the people, I do however reserve the right to keep my fingers crossed.
Tarifs on cars from Europe will only serve to hinder British exports. Britain will not start making their own cars soon, (Ever owned a British car, or even British made?) and exporting services and agricultural products will become more difficult (especially to China and Japan).
The notion that unions are out of date is itself quaint: corporations pool capital, unions pool labour resources. In both cases they are susceptible to improvements in governance, and some of those improvements are listed above.
The idea of targeting productivity instead of increasing property wealth is brilliant, but has nothing to do with Brexit.
If the UK imports more cars from Japan why would exporting to Japan become more difficult? The threat of tariffs is however a useful bargaining tool when the EU is threatening the UK.
Every UK economic improvement is cogent.
Just as Britain has places other then the EU to import from, they have places other then the EU to export to. It is a big world and bullies that punish you coming and going create pain for all.
Old Guy said:
Feel free to correct me if I am wrong here but the majority of British car makers are foreign owned, bought out a long time ago. I think Range Rover is still not foreign owned but even Rolls Royce is foreign owned today.
At one time and I m not sure if it still holds up Ford owned Jaguar.
Stuki Moi said:
A much bigger issue is, by far the majority of British MADE/Assembled cars are foreign branded. British auto manufacturing is doing fine, but they are building Fords, Hondas and Toyotas and……. The formerly British name plates, are now foreign owned, foreign made, and about as relevant to the general auto industry as Rolex is to accurate time keeping.
Whatever the Brits as part of Brexit, they should not, in any way shape or form, do anything that could cause the expat manufacturers to get concerned about European market access on equal terms for cars assembled in the UK. Or about components and subassemblies in various states of completion, facing increased hurdles being shipped back and forth.
Toyota didn’t decide to manufacture in the UK because the UK was the cheapest place on the planet to assemble cars. Nor because of access to the UK market. It was specifically to be on the inside of a huge market. Anything that could even conceivably rock faith in that access, will have those plants, either quickly or over time, move onto the continent; or to lower cost countries where the added cost of exporting into Europe is better offset by cheaper assembly.
Vis-a-vis Germany and regarding autos, the best thing the UK can do, is to play up the fact that Toyota (and the rest) UK, is likely to source more components from European (read mainly German) manufacturers (ZF, Bosch….) than from Japanese, American and increasingly Non Japanese Asian ones. Trade friction between the UK and Germany, could well make it more sensible to ship transmissions to the UK for assembly from Japan, than from Germany. Which will hurt both the UK and Germany, like all trade restrictions are wont to.
Jaguar and Land Rover were bought out in 2008/9 by a company in India called Tata Motors. I remember the story, because it was so odd. Tata manufactured the world’s smallest and cheapest car, retailing for about $2,000 in India. So, for Tata by acquisition to also be manufacturing one of the world’s top luxury cars was an attention-getting event. Free Trade and Capitalism operating unhindered never cease to amaze.
I think the failure of Brexit, if there is to be a failure, will be deliberately induced by the Remain Tories like Ms. May who like the nanny state and might insure its continuance and even extension via an EU treaty. So, it could be Brexit plus a socialist nanny state in the UK, or EU Lite. In a worst case scenario, the Remain Tory negotiators might come home with the equivalent of a Treaty of Versailles to further their own ideological goals. Will be interesting to see how this plays out.
No need for tariffs, quotas or anything like that.
Why can’t Britons merely BOYCOTT any consumer goods (especially autos) that are made in Germany until further notice? There are plenty of other options out there, other than ‘Made in Germany”.
Stuki Moi said:
Not sure I understand the purpose of the animosity. The only real friction between Germany and other EU countries, arise from factors that derive directly from the clumsiness of trying to run a zoo by keeping all animals, regardless of size and predator/prey disposition, in the same cage, rather than allowing each distinct kind some private space of their own.
Once the UK is outside, hence no longer a risk for “needing” a German bailout that Germany understandably feel they have to reduce the likelihood of by imposing Germanic discipline on everyone, there is no real reason why cooperation is not in the best interest of both parties.
The only relevancy I see to the “World Order” so to speak is this this is very bearish for oil and natural gas (gotta pay for that Brexit and vice versa) and War with Russia soldiers in with the USA in the lead and the rest of Europe both following and indeed “staking out their personal claims” to the matter.
The Keynesian Solution as reality (whatever out philosophical predilections are on such matters) roll on.
As was famously said in the Movie Platoon “War is a Machine.”
So the UK has the bargaining power… where? If UK gets out, they get out of a market with 500 million consumers, on the other hand EU would loose only 60 million brit consumers, I don’t think they care…
apparently you cannot read