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The British Pound is expected to plunge following reports that PM Johnson’s Brexit deal could cost the UK $90 billion by 2029. Analysts also found out that the country’s GDP will be lower by 3.5% in 10 years. This could be problematic for Boris Johnson who recently asked for a general election by December. His request follows the move by the UK Parliament where he was forced to send a letter to European Council to ask for a Brexit extension. Johnson is planning to form a majority government before the Brexit deadline on January 31. European Commission President Jean-Claude Junker, on the other hand, warned that this will be the last extension that the EU will grant. The single currency is facing a slowdown in the European region. France grew by 0.03% in the third quarter, its consumer spending decreased by -0.4%, and Germany’s unemployment grow to 6,000.
Despite the phase one trade deal between the United States and China, Australian exports continue to slump. For the third quarter, Australian exports slowed to 3.8% from 4.5% in the second quarter. This could further worsen after the European Union ordered Australia to change the names of its popular cheese. EU copyrights have banned mozzarella, prosciutto, parmesan, whiskey, and harvati. Further, the United Nations wants Australia to increase its ambition on emissions reduction, which could affect Australian business. This is part of the Paris Accord whereby signatories pledged to reduce emissions to prevent global warming. The move by the EU is a retaliation of Australia’s signing of post-Brexit trade agreement with the United Kingdom. Analysts are waiting for the new leaders of the European Union if they will be more friendly or more aggressive with the Australian government.
Following the recent elections in Switzerland, predictions are that the single currency will fall. The Green Party makes historic gains in the Swiss Federal Election, while the anti-immigrant right-wing remains the largest party. Data shows that the Green Party inched higher in the recent election by 6 points to 13%. Analysts and economists see this win as a transition to a greener Europe. This could be problematic for the two (2) largest economy in the European Union (except for the United Kingdom), Germany and France. This is timely as the region, particularly the bloc, is facing an economic slowdown. Its economy only grew by 0.3% with the consumer spending decreasing to -0.4%. The refusal of the Swiss government to sign the framework deal with the EU could further narrow the relationship of the two (2) economies. Meanwhile, Switzerland signed a post-Brexit trade agreement with the European Union.
All eyes are with Japan this year following the country’s successful ratification of two (2) major trade deals. Japan ratified the pacific rim trade pact, the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership), and the EU-Japan free trade deal (FTA), the largest trading zone in the world. This gave Japan the leverage to sign a bilateral trade agreement with the United States. The European Union, on the other hand, needed to convince British Commonwealths to ratify their trading deal with the bloc instead of the United Kingdom. The UK aims to leave the bloc January 31. It is trying to drag Australia, Canada, and New Zealand along with it. In other news, the European Union had lifted some restrictions on Japanese food imports starting mid-November. The current regulation of the bloc roots from the 2011 Fukushima nuclear disaster wherein plants and animals were feared to be contaminated.
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