Marc Ostwald, global strategist and chief economist at ADM Investor Services International, has outlined his view on the possibility of a general election in the UK, and the signing of a new Brexit deal amid political mayhem in the country.
Sputnik: How likely is Boris Johnson to avoid Theresa May's scenario in the House of Lords?
Marc Ostwald: The House of Lords is the least of Johnson's problems, to be honest, he has a one-seat majority (including the DUP vote) in the House of Commons, and there are many opponents in the Conservative party to a 'No-deal Brexit' in the House of Commons; though obviously the House of Lords has many who will also look to scupper a 'no deal'.
The facts remain the same, the House of Commons opposes a 'no deal' Brexit, however as has been more than amply demonstrated, there is still no identifiable majority for what form of Brexit, it does want. Johnson pledged to 'reward' those who funded and supported the 'Leave' campaign.
Sputnik: What are Johnson's chances to attain his goal of making a deal with the EU after the G7?
Marc Ostwald: Again, the scenario has not really changed. Those opposed to the 'Irish backstop' have no alternatives to offer, which were not already rejected in the previous negotiations, because either they do not comply with the terms of the Good Friday Agreement, or they effectively threaten the integrity of the EU Single Market (and it is worth reminding everybody that the UK was one of the primary movers and architects of the Single Market, when it was put together!).
The key point is that the EU will not abandon Ireland, and the onus is on the UK to come up with a viable alternative to the backstop, which Johnson admitted was the case when he held a press conference with Merkel last week. There is an additional point that even in the very unlikely event that the Johnson govt did come up with an alternative to the Irish backstop, he still may not be able to find a majority to pass the necessary legislation in parliament.
Johnson has already made it clear he will hold out till the last minute to try and force the EU to make concessions, by which time it would be too late for parliament to stop a 'no deal' Brexit, which he would blame on the EU, a trick which the EU is more than well aware of, as was made clear by Tusk at the weekend.
The risk of a general election remains very high, though this would almost inevitably mean a 'no deal' Brexit – however, the opposition parties are unable to agree on who would lead a stop-gap govt to ensure an extension of Article 50 and stop a 'no deal'. In principle, nothing has really changed except that Mr Johnson is apparently willing to gamble on a 'no deal', which Mrs May was not – the UK remains in the biggest constitutional crisis since the English Civil War.
Sputnik: Jeremy Corbyn has claimed that a no-deal Brexit would leave the UK at the mercy of the US and that a "no-deal Brexit is really a Trump-deal Brexit". Is this "US mercy" really that bad as Corbyn presents? What are the pros and cons if the UK is left face to face with the US?
Marc Ostwald: That is a factor, but not the factor. It is a factor because Mr Johnson has been talking up a 'trade deal' with the US, as has Trump. But let us start with Northern Ireland once again: a 'no deal' Brexit would be a de facto breach of the Good Friday Agreement, which the US (from which the IRA received a lot of funding during the 'troubles') invested a lot of time and effort into making a reality.
House Speaker Pelosi has already stated that Congress will not ratify any trade deals with the UK if there is any breach of the Good Friday Agreement. Mr Corbyn's arguments are however centred around the UK likely having to concede a huge amount to the US, in areas such as agriculture and pharmaceuticals to name but two, which would doubtlessly do a lot of damage to both sectors in the UK.
Secondly, Johnson & co are looking to deregulate many areas, in which 'regulatory alignment' (rather than the proposed divergence) would be a 100% requirement to achieve trade deals not only with the EU but also many other areas. The 'leave/hard Brexit' keeps on suggesting that there would be much bigger trade deals with key Commonwealth countries (Australia, NZ, India, etc.), the fact is that the UK has been allowed to conclude such deals while in the EU, so this is basically fiction.
A trade deal with Canada has already (almost two years ago) been constructed and ready to sign at 12:01 on the day the UK leaves the EU – for one very simple reason – more than 40% of Canada's exports to the EU go to the UK!
The views expressed in this article are solely those of the speaker and do not necessarily reflect the official position of Sputnik.
