Theresa May suffers defeats on Brexit. Trump backs down when facing Xi Jinping at G20. Trump’s former lawyer pleads guilty. Philippine journalist charged with tax fraud. By Hamish McDonald.
May’s flesh wound
Like the Black Knight in Monty Python who fights on despite having his limbs severed – “’Tis but a scratch” – British prime minister Theresa May pushed her Brexit agreement in the House of Commons this week towards what looked like a coming defeat in the vote on Tuesday.
Before she rose to defend her agreement with the European Union – to remain in the European customs area until the end of 2020 while negotiations continued on a permanent arrangement beyond – she suffered three defeats on the floor of the parliament. MPs voted down her attempt to refer a wrangle over disclosure of her attorney-general’s full advice on Brexit to a committee. They declared her government in contempt for refusing to table the advice. They resolved that should the Brexit agreement be voted down parliament would control carriage of new negotiations.
That last vote meant May lost the support of 26 of her Conservative MPs and the 10 Northern Ireland unionist MPs.
The diehard Brexiteers among the Tories see May’s agreement as a halfway house likely to become permanent in order to avoid a hard land border in Ireland. “We are going to be rule-takers; we are going to be a de facto colony,” said former foreign secretary Boris Johnson. “And out of sheer funk we are ensuring we will never, ever be able to take advantage of the freedoms we should have won through Brexit.” When Attorney General Geoffrey Cox’s advice was tabled on Wednesday, it bolstered their case: May’s agreement could leave Britain half-in, half-out, indefinitely.
They want to crash out on March 29 when the two-year transition from notice of EU withdrawal ends – despite new advice from the Bank of England that this would leave the British economy 9.3 per cent smaller by the 2030s than it would be if Britain stayed in the EU. May’s compromise is the least bad option to remaining, with the economy only 2.5 per cent smaller.
Incidentally, apparently influenced by former London high commissioner Alexander Downer, Australia’s Coalition government wants a hard Brexit as soon as possible, so it can negotiate a free trade agreement with Britain – regardless of the effect on Western unity and not mentioning the devastating blow free trade agreements with Australia and other New World economies would deliver to British agriculture.
Jeremy Corbyn’s Labour opposition has said that if May’s Brexit deal is voted down, it will put a motion of no-confidence in her government to try to precipitate elections and perhaps a second referendum on Brexit. The prospect of Corbyn socialism might return even the hardest Brexiteers to the fold. Meanwhile an advocate general in the European court has advised that Britain could revoke its notice of withdrawal unilaterally any time before March 29.
Xi shot the tariff
Eight, nine, nine-and-a-half, nine-and-three-quarters… Donald Trump blinked in Buenos Aires last Saturday night during his supposed showdown with China’s Xi Jinping over trade, and suspended his threat to escalate tariffs on imports from China for another 90 days.
With no joint statement issued, each side dribbled out bits of what the two leaders had agreed. It wasn’t much. Trump said Xi agreed to lower tariffs on US-made cars – or was it to abolish the tariffs? No one was clear. Xi had agreed to outlaw non-medical production of fentanyl, the powerful synthetic opioid causing overdose deaths in America – then it turned out it was illegal in China anyway.
The 90-day suspension of the rise to 25 per cent in punitive tariffs on about half of imports from China, and extension to the rest of China’s shipments, started on the day of the meeting, December 1. Existing tariffs of 10 per cent stay in force. China had said it would lift imports of US farm products and machinery, but was clear about the retaliatory tariffs it imposed on $US110 billion of imports from the US.
The real nub of US–China trade friction – forced transfer of intellectual property as the price of entry to China’s domestic market, cyber spying, and state-sponsored efforts to seize leadership in microprocessors and other technologies – was kicked further down the road. Like many Asian leaders before him, Xi was buying off the Americans with more orders for Boeings and soybeans, which they would have bought anyway.
Financial markets initially welcomed the truce, then crashed on Tuesday when Trump’s early-morning Twitter-storm showed that back in Washington he was again under the influence of White House trade warriors: “I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”
Trump clearly thinks the tariffs are a bonanza for the US government, bringing in extra “billions” of customs duties from the Chinese. They actually come from the US buyers of the products. Thanks to a fall in China’s yuan, and stockpiling in anticipation of the higher tariffs, Chinese exports to the US have actually risen. But Trump also said he might extend the truce if a “real deal” was not ready by the end of February. Xi will keep him dangling.
It’s all a wonderful diversion from Trump’s deepening legal quandary, after his former lawyer Michael Cohen pleaded guilty in a New York court to false testimony to Congress over Trump’s financial interests in Russia.
Special counsel Robert Mueller had caught him out in a lie that Trump’s pursuit of a Trump Tower development had ended by February 2016, well ahead of the Republican primary elections for the presidency. It turns out that negotiations, via colourful fixer Felix Sater, ended only in mid-June 2016, after Trump had effectively clinched the Republican nomination and just as reports broke of Russian involvement in the WikiLeaks trove of Democrat emails. And as a sweetener, Vladimir Putin was to get a $US50 million penthouse in the new building.
Cohen’s reversal ensnares Trump, who repeatedly denied any financial interests with Russia. But Trump battled on, accusing Cohen of lying to get a reduced sentence. He praised former Republican operative Roger Stone, who appears to have tipped off Trump about the WikiLeaks hack, for “guts” in refusing to testify to Mueller against Trump.
This latter move got condemned as witness-tampering by some legal figures, including well-known conservative lawyer George Conway, whose wife Kellyanne is an adviser in the White House. Conway, who has called the Trump administration a “shit-show in a dumpster fire”, had earlier condemned Trump’s recent appointment of the highly partisan lawyer Matthew Whitaker as acting attorney general, after he sacked Jeff Sessions for recusing himself from oversight of Mueller.
It’s caused some friction in the Conway household, Kellyanne has admitted, and presidential son Eric Trump this week attacked the “utter disrespect” George had shown her and “everything she has fought SO hard to achieve”.
The US president is still refusing disclosure of his tax returns, but elsewhere in the world abuse of tax laws is frequently used by authoritarian leaders to try to discredit critics without making it look political.
A case in point is Maria Ressa in the Philippines, whose widely followed website Rappler has shown what’s happening in President Rodrigo Duterte’s war on drugs. Since he took office police have killed about 5000 alleged drug users and dealers, and unidentified vigilantes another 2500 – though some reports put the total at 12,000. Ressa turned herself in to police on Monday over charges that she and Rappler had given false information in tax returns.
This week a court in Manila showed some resistance to Duterte by sentencing three police officers to up to 40 years’ jail for the execution of a 17-year-old schoolboy, Kian Loyd delos Santos. Evidence showed the boy already under arrest being taken into an alley, where his body was found with a planted pistol. But it remains to be seen how the case goes on appeal and whether Duterte exercises a pardon to keep police onside.
This article was first published in the print edition of The Saturday Paper on Dec 8, 2018 as "May’s flesh wound".
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