Tuesday, August 30, 2016

What America can learn from Brexit - Financial Times

Until recently, my politically obsessed friends in America did not express much interest in British elections. No wonder. Although the iconic figure of Margaret Thatcher had inspired fascination a few decades ago, as had, a little later, the white-toothed Tony Blair, the 2015 British election elicited barely a yawn. Westminster politicians — men such as David Cameron — seemed too dull to hold any lessons for the US.
No longer. Right now, Republican and Democratic strategists are gearing up for the 2016 US election campaign. And, sitting around dinner tables in recent days listening to the anguished, endless debates among pollsters, campaigners and pundits, I’ve often heard the question: what lessons does the Brexit vote hold for the US? Does the “shock” result of the UK referendum suggest that an outsider such as Donald Trump might win? Or is that comparison too simplistic?
To my mind, the answer is both “yes” and “no”. Brexit was a very different vote but there are about half a dozen lessons from the UK referendum that could matter in the US this November.
First — and most obvious — Brexit shows just how blind a political elite can be in a socially and economically polarised world. As my colleagues Gideon Rachman and Edward Luce have recently written, the Brexit vote was partly a protest vote — a howl of rage against economic pain, immigration and a loss of cultural identity. The only thing more surprising than this vote was that the UK elite was surprised by it; and the Democratic camp could easily repeat that mistake.
The second lesson is that the electorate is losing its fear of leaping into the unknown. Nobody can assume that Trump will lose “just” because he presents a risk. In a world where voters feel angry, taking a risk no longer seems so risky. And there is another important psychological issue at work: the electorate has just experienced a decade in which most of the rules of finance and economics have been turned upside down, as a result of the financial crisis. Turning the political rules on their head no longer seems so strange — at least, no stranger than seeing rates turn negative and big banks collapse.
That leads to a third lesson: revolution cannot be crushed by mere statistics or scare stories. Politicians such as Cameron tried to defeat the Brexit vote by citing economic data showing how dangerous Brexit might be; but voters dismissed it because they were too angry to listen — and too distrustful of the elite. The Brexit vote was decided on the basis of emotion — and the Remain camp failed to give voters a really positive vision of Europe. The Brexit camp, by contrast, invoked an image of an independent, proud sovereign nation that appealed to many voters.
This highlights a crucial fourth lesson: if the Democrats want to beat Trump, they cannot rely only on a US version of “Project Fear”; they need a positive and upbeat image too. Last week, the Democrats tried to create this at the Philadelphia convention. But they must recognise that Trump is campaigning on both negative and positive emotions; somehow the Democrats need to find a slogan as memorable and upbeat as Trump’s “Make America Great Again”.
A fifth lesson is that it is not just emotions that matter: the geeky details of the electoral process do too. One reason why the Remain camp lost in the UK was that turnout was low among potential young voters (who generally favoured Remain). Another issue was a little-noticed technical detail: parents used to be able automatically to register their teenage kids to vote, but this has recently changed. There are numerous “technical” details in the US electoral process that could turn out to be even more important; particularly since strategists — on both sides — are skilled at using all the loopholes they can find to get their supporters out, or suppress the other side. Pundits who want to predict the November results must look hard at the electoral weeds.
And that brings us to the sixth and most important lesson from Brexit: that democracy, by its nature, is unpredictable, particularly as social polarisation is increasing. Elites might hate this. So might investors or businesses, which need to plan for the long term. But if the whole point of democracy is to give people a voice, there will always be a risk that this voice will either howl in rage — or sit at home and not speak at all. Americans had better hope that the pundits learn this lesson ahead of time and — crucially — that politicians are ready to listen.

Controversial Trade Talks Between U.S. and E.U. Have Failed, German Economy Minister Says - TIME

Posted: 28 Aug 2016 08:57 PM PDT

(BERLIN) — Free trade talks between the European Union and the United States have failed, Germany’s economy minister said Sunday, citing a lack of progress on any of the major sections of the long-running negotiations.
Both Washington and Brussels have pushed for a deal by the end of the year, despite strong misgivings among some E.U. member states over the Trans-Atlantic Trade and Investment Partnership, or TTIP.
Sigmar Gabriel, who is also Germany’s vice chancellor, compared the TTIP negotiations unfavorably with a free trade deal forged between the 28-nation E.U. and Canada, which he said was fairer for both sides.

“In my opinion, the negotiations with the United States have de facto failed, even though nobody is really admitting it,” Gabriel said during a question-and-answer session with citizens in Berlin.
He noted that in 14 rounds of talks, the two sides haven’t agreed on a single common item out of 27 chapters being discussed.
Gabriel accused Washington of being “angry” about the deal that the E.U. struck with Canada, known as CETA, because it contains elements the U.S. doesn’t want to see in the TTIP.
“We mustn’t submit to the American proposals,” said Gabriel, who is also the head of Germany’s center-left Social Democratic Party.
In Washington, there was no immediate comment from the office of the U.S. trade representative.
Christian Wigand, a spokesman for the European Commission, the E.U.’s executive arm and which is leading the TTIP negotiations, said Sunday that the institution had no comment or reaction at this time.
Gabriel’s ministry isn’t directly involved in the negotiations with Washington because trade agreements are negotiated at the E.U. level. But such a damning verdict from a leading official in Europe’s biggest economy is likely to make further talks between the EU executive and the Obama administration harder.
Gabriel’s comments contrast with those of Chancellor Angela Merkel, who said last month that TTIP was “absolutely in Europe’s interest.”
Popular opposition to a free trade agreement with the United States is strong in Germany. Campaigners have called for nationwide protests against the talks on Sept. 17 — about year before Germany’s next general election.