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DAILY BRIEFING

The first step for Asia

Written by Li-Ann Chin, associate 
Edited by Harriet Moll, creative director
19 November 2020

Good morning,

Last Sunday marked a momentous occasion as fifteen countries in the Asia-Pacific region converged to sign one of the biggest free trade deals in history, covering 2.2 billion people and 30% of the world’s economic output.

As the first trade deal to simultaneously involve rival East Asian powers – China, Japan and Korea – the agreement represents a crucial milestone for economic integration in the region. According to the Peterson Institute for International Economics, the Regional Comprehensive Economic Partnership is predicted to potentially add almost $200 bn annually to the global economy by 2030.

It is no secret that the virus has devastated Southeast Asia. Earlier this month, it was reported that Indonesia fell into its first recession in 22 years. In August, Thailand’s economy witnessed its biggest GDP fall since 1998 as a result of the pandemic. Indeed, many signatories have expressed hope that by facilitating closer interdependence and freer trade, RCEP will boost Covid-19 economic recovery within their countries.

Nonetheless, limitations remain.

Unlike the overlapping Trans-Pacific Partnership trade, however, the RCEP is relatively modest. It fixates on the reduction of tariffs, whilst barely scratching the surface of more complex issues such as cross-border data flow, e-commerce and agriculture.

There is a reason for that. The Asia-Pacific region is incredibly diverse. While common ground might be easily established amongst ASEAN countries such as Malaysia and Singapore,  the negotiation process becomes much more complicated when New Zealand and Japan are added to the mix. The terms of agreement appear to have been kept superficial to accommodate all of the diverging interests. It is likely that countries involved are expecting its sheer size – bigger than that of the European Union and the US-Mexico-Canada agreement – to compensate.

Whatever its limitations in practical terms, the real significance of RCEP lies in the way it signals Asia’s commitment towards trade liberalisation, during a time when other regions have grown sceptical.

News

Pfizer and BioNTech said they would submit their Covid-19 vaccine for US and EU emergency approval “within days”, after new data showed it was even more effective than previously reported. The jab was found to have an efficacy rate of 95%, matching results released this week by rival vaccine Moderna. (£)

The University of Oxford coronavirus vaccine produces a strong immune response in older adults, the latest phase two results show, in another boost in the fight against Covid-19. Phase three trials of the vaccine are ongoing, with early efficacy readings possible in the coming weeks.

Further restrictions may be needed before and after Christmas if Covid-19 measures are loosened over the festive period, government scientific advisers warned on Wednesday. England may face an almost month-long lockdown in exchange for Christmas five-day rules relief.

Despite being reinstated to the Labour party on Tuesday, Sir Keir Starmer has refused readmit Jeremy Corbyn to the parliamentary party. Twenty-eight MPs and four peers have signed a statement against Starmer’s decision, calling for a swift reversal.

Business and economy

In publishing the outlook for UK’s economy in next week’s spending review, chancellor Rishi Sunak is expected to deliver the largest downgrade in economic performance and the public finances since the second world war. His spending plans will reportedly be based on forecasts predicting the economy will still be suffering the effects of coronavirus by the likely time of the next election in 2024. (£)

The largest military investment in 30 years is set to be announced by the prime minister  –  an extra £4bn a year over the next four years. The money will fund space and cyber defence projects such as an artificial intelligence agency, and could create 40,000 new jobs, the government said.

A survey of British Beer & Pub Association, British Institute of Innkeeping and UK Hospitality members found that 72 per cent of firms expect to become unviable and close in 2021. Hospitality firms said the tiering system that was in place before the latest England-wide lockdown was particularly damaging for the sector, and demanded more support, including larger grants, from the government.

New data from LinkedIn shows that internal hiring at UK firms rose 20 per cent compared to last year between April and August. Other countries around the world are experiencing a similar surge in internal promotions, for example Germany, where the rate of such hiring is up 25 per cent.

Columns of note

Politicians have been promising to fix regional inequality for as long as it has been a problem. But they have often felt as if they were “pushing water uphill”. Writing in the Financial TimesSarah O’Connor highlights how the trend of remote working has granted policymakers with a once-in-a-generation opportunity to rebalance. Maybe, just maybe, the silver lining of this pandemic is that ‘levelling up’ is easier in a world where we work from home.

Adding to the recent surge in vaccine development progress, Pfizer announced yesterday that its mRNA-based candidate had passed its full safety checks, making it now ready for market approval. According to Therese Raphael in Bloomberg Opinion, this is only the beginning. Managing the reporting and follow-up of what are known as adverse drug reactions will be critical to keeping to the high levels of public participation needed for a vaccination program to be successful, she argues.

Cartoon source: The New Yorker

Markets

What happened yesterday?

Global stocks edged higher as investors weighed signs that scientists are making fast progress toward a coronavirus vaccine with news of fresh restrictions to curtail the spread. Bitcoin surged past $18,000 for the first time since December 2017 before paring gains.

The S&P 500 Index rose 0.2% at 12:11 p.m. New York time. The FTSE 100 gained 0.3% by close, to 6,385.24. The FTSE 250 closed 0.9% higher.

In terms of commodities, West Texas Intermediate crude gained 1.6% to $42.09 a barrel. Gold rose 0.1% to $1,881.92 an ounce.

In company news:

Following widespread criticism of its charges, Apple confirmed that it will be slashing App Store commission from the original 30% to 15% for developers that generate £830,000 or less in proceeds from the store each year.

Shares of Boeing climbed 5.9% in pre-market trading Wednesday after the Federal Aviation Administration cleared the company’s troubled 737 MAX to return to service.

Three of M&C Saatchi’s founders are set to depart the advertising group, in an attempt to draw a line under a year-long accounting scandal.

Pearson has unveiled a new division that will deliver products directly to consumers as it looks to harness the power of streaming models used by companies such as Netflix.

What’s happening today?

Finals
Euromoney
Grainger plc

Interims
Charles Stanley
Cmc Mkts
Halma
Investec
Jet2 Plc
Johnson Matthey
Mitie
Naked Wine
Polar C. Hldgs
Srt Marine Sys.
Syncona

AGMs
Close Bros
Finsbury Food
Infra.india
Jupiter Uk Gr
Litigation Cap.
Maestrano Grou.
Thorpe (F.w)

UK Economic Announcements
(07:00) Retail Sales

Int. Economic Announcements
(09:00) Current Account (EU)
(13:30) Continuing Claims (US)
(13:30) Philadelphia Fed Index (US)
(13:30) Initial Jobless Claims
(15:00) Existing Home Sales (US)

Source: Financial Times

did you know

If ASEAN were a single country, it would be the seventh-largest economy in the world.  

Parliamentary highlights

House of Commons

Oral questions
International Trade
 
Business Statement
Business Questions to the Leader of the House – Mr Jacob Rees-Mogg
 
Backbench Business
Regulation and prevention of online harms – Jeremy Wright, Fiona Bruce, Dame Diana Johnson
International Men’s Day – Philip Davies, Ben Bradley
 
Adjournment
Department for Health and Social Care’s Independent Reconfiguration Panel – Siobhain McDonagh

House of Lords 

Introduction(s)
Lord Bellingham
 
Oral questions
Return to face to face appointments on demand for medical patients – Lord Balfe
Financial support provided for research into therapies and treatments for people with brain tumours – Lord O’Shaughnessy
Encouraging fossil fuel intensive businesses to accelerate their move to net zero carbon emissions – The Lord Bishop of Salisbury
Publication of the Dunlop Review into UK Government Union capability – Lord Foulkes of Cumnock
 
Motion
Report from the Conduct Committee ‘The Conduct of Lord Ahmed’ – Lord Mance
 
Legislation
Private International Law (Implementation of Agreements) Bill [HL] – consideration of Commons amendments – Lord Stewart of Dirleton
 
Orders and regulations
Law Enforcement and Security (Amendment) (EU Exit) Regulations 2020 – Viscount Younger of Leckie
Customs Safety, Security and Economic Operators Registration and Identification (Amendment etc.) (EU Exit) Regulations 2020 – Lord Agnew of Oulton

Scottish Parliament 

First Minister’s Questions
Parliamentary Bureau Motions
Portfolio Questions: Constitution, Europe and External Affairs
 
Ministerial Statement: COVID Vaccine
Public Petitions Committee Debate: Improving youth Football in Scotland
 
Business Motions
Decision Time
 

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