Aurelia Butler

Talks will resume this week between the British government and the European Union over how to resolve the long-running dispute over trading arrangements for Northern Ireland that soured the first year of post-Brexit relations.Liz Truss, UK foreign secretary, will attempt to cut the Gordian knot left by her predecessor, Lord David Frost, who resigned late last year just as London began retreating from some of its stiffest demands.Truss has struck a warmer tone than Frost in initial contacts and has invited Maros Sefcovic, the EU’s Brexit commissioner, to meet at her grace-and-favour mansion in Chevening, Kent, on Thursday night, promising “constructive proposals” to break the deadlock.But officials on both sides concede that on the substance of how to manage the new trade border in the Irish Sea, they remain far apart. The Financial Times looks at the prospects for a deal. The UK positionLike her predecessor, Truss maintains that the Brexit deal that the UK agreed in 2019 for Northern Ireland is “not sustainable” and needs radical reshaping.The Northern Ireland protocol left the region in the EU single market for goods to avoid bringing back a hard trade border on the island of Ireland, but this necessitated the creation of a trade border in the Irish Sea.The British government says this trade border unnecessarily divides the UK’s own internal market and is causing a hit to traders in Great Britain, who now face high levels of bureaucracy to send goods from the mainland to Northern Ireland.Truss took a tough line in a newspaper article published over the weekend, writing that the UK wants to see “no checks or documentation for goods moving from Great Britain to Northern Ireland”.London also wants the EU to change a section of the protocol that requires any UK government subsidy decision that could impact on the region’s goods market to be cleared in Brussels by the European Commission.In addition, the UK wants to eliminate any requirement for businesses in Northern Ireland to notify the EU when goods are leaving the EU single market, which is required under EU law.Lastly, the UK is looking to remove the EU’s top court, the European Court of Justice, as the “final arbiter” of future disputes over the protocol. In its place, London wants to have an arbitration mechanism, with the ECJ ruling only on matters of EU law.If Brussels does not address these concerns, Truss says she reserves the right to trigger the Article 16 safeguarding clause in the protocol, which would temporarily suspend parts of the deal while solutions are found.She is under pressure from Conservative MPs and unionist politicians in Northern Ireland not to compromise with Brussels. The EU positionEU officials have welcomed the warmer tone from Truss, but also cautioned that this will not be enough to secure a breakthrough. “We will not be seduced by a night in a country house,” said one official close to the talks.Truss’s decision to lay out her demands in a newspaper article has also irked EU countries, with patience with the UK running thin in national capitals wanting to focus on the EU’s ambitious green agenda and Covid recovery. “The government’s habit of speaking with Brussels through the national press shows with Truss . . . not much has changed,” said one diplomat.On the substance of the UK demands for radically reduced checks, Brussels argues that there are limits to how far it can go. If Northern Ireland is to remain in the single market for goods, then the EU must have some oversight. “If something is coming to the EU single market . . . we have to have an overview,” Sefcovic said before Christmas.The commission has paused legal action against the UK for failing to implement parts of the protocol while talks continue. The EU has also unilaterally moved to introduce legal changes to ensure that the protocol does not disrupt medicine supplies, and last October proposed some measures that it claimed could reduce customs checks by “50 per cent” and checks on agrifoods by “80 per cent”. However, the UK government disputes that assessment and says the EU offer falls far short of what is necessary to make the protocol work.Sefcovic has avoided putting a deadline on the talks but the EU wants a comprehensive deal as soon as possible, ideally before election campaigning begins in Northern Ireland in March. The Northern Irish positionThe EU-UK talks resume as the political situation in Northern Ireland becomes increasingly fractious ahead of elections on May 5 for the region’s power-sharing government, which are being seen as a referendum on the protocol. The Democratic Unionist Party, which supports Northern Ireland’s place within the UK, is battling to retain leadership of the devolved regional government and has threatened to pull out its ministers unless London swiftly secures a deal to remove the Irish Sea border. The DUP, which feels it has been duped by the Westminster government before, is looking to maintain pressure on Truss amid fears that the UK government could reach a deal that falls short of its demands. Meanwhile, Dublin has urged London and Brussels to ensure that the protocol talks do not drag on past February, and Northern Ireland’s business community is demanding that both the EU and the UK bury their political differences and find flexibilities in the interests of Northern Ireland.Aodhán Connolly, director of the Northern Ireland Retail Consortium, said the business community was “under no illusions” about the challenges facing negotiators in the next couple of months. “This is perhaps our last and best chance at reaching an agreement between the EU and UK to allow Northern Ireland businesses to be competitive and keep choice and affordability for our households,” he said. What next?There are three paths open to Truss, all difficult to navigate. If she triggers Article 16, EU member states have made clear they will retaliate swiftly, including the possible suspension of the Trade and Cooperation Agreement, which allows tariff- and quota-free trade between the UK and its largest market.An unambiguous statement of the UK government’s intent on #NorthernIreland from @trussliz, ahead of further negotiations with the EU. Very welcome.https://t.co/clcCwoArwR— Conservative Union Research Unit (@ConservativeURU) January 8, 2022
If Truss accepts some goods checks and ultimate ECJ oversight, the commission might allow more leeway for the UK to police the deal on its behalf. But if she accepts this, Truss risks blowback from the caucus of more than 80 Brexiter Conservative MPs who on Sunday tweeted support for her tough opening gambit as an “unambiguous” statement of intent.Alternatively, faced with such invidious choices, she could decide simply to keep talking, stringing out the current tensions and forcing the EU to make the first aggressive move, such as restarting the legal action against the UK that it suspended last year. More

TOKYO (Reuters) – The U.S. dollar hovered near the middle of its recent range against major peers on Tuesday as traders looked to incumbent Fed Chair Jerome Powell’s nomination hearing later in the day for new clues on the timing and pace of policy normalisation.In his prepared opening remarks, released Monday, Powell will pledge to prevent high inflation from becoming “entrenched,” but will make no mention of plans for the path of monetary policy. However, he will take questions from senators in his bid for a second four-year term.The dollar index, which measures the currency against six counterparts, hovered around 95.93 early in the Asian session.It hit a more than 16-month high of 96.938 on Nov. 24 amid increasing hawkishness from Fed policy makers, but has since been stuck between that level and 95.544, touched less than a week later, despite a continued ramping up of rhetoric that now has Wall Street banks forecasting four quarter-point rate hikes this year.TD Securities strategists said it seemed the Fed was of the mindset of “sooner rather than later” for both higher rates and running off its balance sheet after ending bond-buying stimulus – a process dubbed quantitative tightening (QT).”An affirmation of March tightening and early QT should support USD firmness overall, though within well-established ranges,” they wrote in a research note.TD expects a first hike in June, but as early as March was also a possibility.Money markets are priced for an increase by May, with two more by November.U.S. December consumer inflation data is due to be released on Wednesday, with headline CPI seen coming in at a red-hot 7% on a year-on-year basis, boosting the case for an early increase in interest rates.The dollar was little changed at 115.23 yen after bouncing off a one-week low of 115.045 overnight.The euro was about flat at $1.13325, stuck in the middle of its trading range since mid-November.Sterling was stable at $1.35825 after easing back from Monday’s two-month high of $1.36025.The Australian dollar added 0.17% to $0.71860, getting support from local retail sales data that came in much higher than economists forecast. More

The White House also said on Monday that there is no limit to the number of COVID-19 tests, including at-home tests, that insurers must cover if they are ordered or administered by a health care provider. The measures are part of a bid by President Joe Biden to make testing more widely available to Americans facing soaring coronavirus cases due to the highly infectious Omicron variant. In a speech in December, Biden outlined plans to distribute 500 million at-home coronavirus test kits and stand up new federal testing sites, adding to the 20,000 already in existence. However, experts decried the announcement as “too little too late” amid testing shortages nationwide. White House Press Secretary Jen Psaki said on Monday that Americans should be able to order the tests online later this month, noting that all contracts for 500 million rapid tests should be awarded over the next two weeks. The first two were signed last week, with two more announced on Monday.Under the insurer coverage plan announced Monday, the administration said that insurers are still required to reimburse tests purchased by consumers outside of their network, at a rate of up to $12 per individual test. It was not immediately clear what incentives were offered to insurers to agree to the plan. The Department of Health and Human Services did not immediately respond to a request for comment.On Monday, the Defense Department said it had awarded contracts to Atlantic Trading, LLC, of Austin, Texas, and Medea Inc. of Pleasanton, California, for a combined total of 27 million at-home test kits.The contract awards bring the total of test kits ordered to over 50 million, a White House official said. More

(Reuters) – Michigan State University economics professor Lisa Cook was named a director of the Federal Reserve Bank of Chicago in January, even as she is expected to be nominated any day now to the Federal Reserve Board by U.S. President Joe Biden.Cook is beginning her three-year term as the Chicago Fed’s newest “class B” director, a spokesperson said. She is one of three such directors picked by the regional Fed bank’s member banks, and one of eight on the board, the Fed website showed on Monday.Regional Fed banks typically announce their new boards in January, though the Chicago Fed has not made any announcement beyond updating its website. Cook is on leave this year from Michigan State and did not respond to a request for comment. Biden reportedly plans to nominate Cook to the Fed Board, where she would be its first Black woman governor, along with former Fed Governor Sarah Raskin and Davidson College’s Philip Jefferson. More