Charlotte Street Partners



Could you be more Pacific?

Written by Charles Clegg, senior associate 
Edited by Iain Gibson, associate partner
2 February 2021

Good morning,

Beyond the overseas territory of the Pitcairn Islands (population: 50), the UK is a distinctly non-Pacific country. The UK government has nevertheless announced its intention to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): a move which may, in the face of geography, appear baffling.

It would be easy to mock the government for leaving a massive neighbouring trade bloc only to pursue an agreement on the opposite side of the world. The benefits of such a deal on UK GDP are likely to be marginal, especially when compared with the effects of leaving the EU.

UK businesses have, however, proven generally supportive. They recognise this could open supply chains in manufacturing and medicine while giving the UK access to growing tech markets. It also represents a potential growth area for Scotch whisky. The deal could help the industry overcome crippling tariffs such as the 100% charge currently applied by Malaysia. Such relief is keenly needed as a US tariff dispute continues to pinch the industry to the tune of half a billion pounds.

The US has held off any resolution to this dispute until a trade deal can be struck. Such a deal is not a priority for the Biden administration. In the UK’s relations with the US, however, CPTPP may prove key.

Barack Obama was the leading driver behind CPTPP’s predecessor, the Trans-Pacific Partnership. Donald Trump withdrew the US in 2018 after congress refused to ratify the deal. The other member states resurrected the deal as CPTPP. It might seem natural for Joe Biden to return to his former boss’ scheme; yet, in trade, Trump’s shadow looms more heavily than Obama’s. Biden has, to the distress of foreign investors, continued his predecessor’s insularity with a ‘Buy American’ push.

CPTPP could, however, prove the way to Biden’s heart is through the Pacific. CPTPP is defined by the large Pacific state it excludes: China. The EU’s recent investment deal with China has hardly endeared the bloc to a US President who is keen to prove his mettle in Beijing. Joining CPTPP pre-emptively aligns the UK with Biden’s US administration. The move could yet result in improved relations and trade between the UK and US.

Brexiteers promised a sea of opportunity. Who knew it would be in the Pacific Ocean?


The UK government’s health secretary, Matt Hancock, has announced a testing blitz to track down and contain a new variant of Covid-19. Hancock announced his intention to “come down hard” on the ‘South African’ variant, which is believed to be spreading in some parts of the UK. To do this, 80,000 people will be tested in 8 areas of England.

Joanna Cherry, a long-time critic of Nicola Sturgeon, has been sacked as the SNP’s home affairs spokesperson at Westminster. Cherry has increasingly found herself at odds with her party’s leadership over transgender rights and the party’s strategy on independence. The Edinburgh South West MP responded to her sacking by condemning the SNP leadership on Twitter.

The UN will today discuss sanctions on Myanmar after the country’s elected government was overthrown by the military. Shortly before his arrest yesterday, one opposition leader, Win Htein, called for foreign powers to denounce and cut ties with Myanmar’s new regime. President Biden has already announced the US will consider whether to impose sanctions on the regime. (£)

Business and economy

US tariffs have cost the Scotch whisky industry £500m. According to the Scotch Whisky Association, exports of single malt to the US have fallen by over a third since the Trump administration imposed a 25% tariff in October 2019. The SWA urged the UK government to resolve the historic aviation dispute at the root of the US decision to impose tariffs.

The European Commission has left UK shellfish exporters in the lurch by announcing that an import ban on their produce will continue indefinitely. The UK government had initially assured the sector that the EU’s ban would not continue beyond April. Industry figures have described the EU’s move as “desperate”. (£)

In the US, silver has reached an eight-year high thanks to a rush by online investors. In a day that saw spot silver increase by more than 7%, the commodity reached $30 an ounce, rising by as much as 10% before falling back to about $28.82. The move has been driven by online investors using the platform Reddit. Similar actors forced a rise in GameStop’s share price last week.

Columns of note

In the Financial Times, Sam Bowman argues Covid-19 gives the UK an opportunity to repair relations with the Republic of Ireland. The ties between the mainland UK, Northern Ireland, and the Republic of Ireland are so close that any threat of Covid in one is a risk to the others. While the UK has vaccinated 14% of its population, Ireland has vaccinated only 3%. Bowman suggests the UK should share its advantage with the Republic for their mutual benefit. (£)

Anand Menon argues in the Guardian that rows over vaccines and diplomats are likely to set a pattern for spats between the UK and EU. Menon claims the disputes have already damaged relations. The UK’s status as a nearby competitor means the EU will continue to treat it confrontationally, as it has done on vaccines. At the same time, Boris Johnson can continue to appeal to his base by appearing to be tough on the EU. Menon believes such aggression represents “the new normal”.

Cartoon source: The Times


The week ahead

As European vaccine news seems promising, investors have looked beyond the tussle between Redditors and Wall Street institutions to deliver the biggest gain in US equities since October. The blue-chip S&P 500 index closed up 1.6%, while, boosted by rallies in giants like Alphabet and Amazon, the tech-heavy Nasdaq Composite rose more than 2.6%.

In Europe, the region-wide Stoxx Europe 600 index closed up 1.2%, having fallen more than three per cent last week. The FTSE 100 climbed 0.9% and Frankfurt’s Xetra Dax rose 1.4%.

The pound begins the week strong against the euro at 1.13 and against the dollar at 1.37.

In company news:

Online retailer, Asos, has struck a £330m deal to buy the Topshop, Topman, Miss Selfridge and HIIT brands from failed group, Arcadia. The deal does not include the brands’ shops, which puts jobs at risk.

Airbus workers at Broughton in Wales have voted to reduce their working week by up to a tenth in a bid to save over a thousand jobs at the site.

US aviation firm, Eaton, has agreed to buy the air-to-air refuelling arm of British firm, Cobham, for £2.8bn. The latter is being sold by US private equity firm, Advent.

What’s happening today?

Idox Group


Q4 results

Trading announcements
Gem Diamonds Di
Virgin Money UK

Blackrock Fr
JPMorgan Indian
Scottish Inv

UK economic announcements
(07:00) Nationwide House Price Index
(10:00) GDP (Preliminary) (EU)
(20:30) Auto Sales (US)

Source: Financial Times

did you know?

Bluebirds are not found in Great Britain, meaning that, contrary to the Second world War song, there have never been bluebirds over the White Cliffs of Dover.

Parliamentary highlights

House of Commons

Oral questions
Justice (including Topical Questions)

Urgent question
To ask the Secretary of State for Northern Ireland if he will make a statement on the implementation of the Northern Ireland Protocol – Louise Haigh

Ministerial statements
Covid-19 Update – Matt Hancock
Update on Myanmar – Nigel Adams

Ten Minute Rule Motion
Local Welfare Assistance Provision (Review) – Paul Maynard

Air Traffic Management and Unmanned Aircraft Bill [Lords]: Second Reading

Deportation of foreign national offenders – Mr Simon Clarke

General Committees
First Delegated Legislation Committee – Debate: The draft Government of Wales Act 2006 (Amendment) Order 2021

Public Administration and Constitutional Affairs Committee
Oral evidence: The Evolution of Devolution: English Devolution

Health and Social Care Committee

Oral evidence: Safety of maternity services in England

Committees on Arms Export Controls
Oral evidence: Arms export controls: Initial review

Education Committee
Oral evidence: Appointment of the Chair of the Office for Students

Digital, Culture, Media and Sport Committee
Oral evidence: The future of UK music festivals

Business, Energy and Industrial Strategy Committee
Oral evidence: The impact of coronavirus on businesses and workers

Justice Committee
Oral evidence: The work of the Sentencing Council

Foreign Affairs Committee

Oral evidence: The UK’s role in strengthening multilateral organisations

Defence Committee
Oral evidence: NATO, US and UK Defence Relations

Work and Pensions Committee
Oral evidence: DWP’s response to the coronavirus outbreak

House of Lords 

The Rt Hon Sir Richard Benyon and Peter Cruddas

Oral questions
Assessing online learning for school pupils – Lord Storey
Financial support for farmers after Brexit – Baroness Ritchie of Downpatrick
Impact of COVID-19 on youth unemployment – Lord Rose of Monewden
Permitting exam year pupils affected by the COVID-19 pandemic to repeat that year of study – Lord Addington

Orders and regulations
Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021 – motion to approve – Lord Wolfson of Tredegar
Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021 – motion to regret – Lord Kennedy of Southwark
Public Health (Coronavirus) (Protection from Eviction) (England) Regulations 2021 – motion to regret – Baroness Grender

Private Notice Question
Reported military coup in Burma. – Lord Alton of Liverpool

Medicines and Medical Devices Bill – consideration of Commons amendments – Lord Bethell
Trade Bill – consideration of Commons amendments – Lord Grimstone of Boscobel

COVID-19 Committee
Oral evidence: Living online: the long-term impact on wellbeing

Common Frameworks Scrutiny Committee
Oral evidence: Post-Brexit common frameworks

Communications and Digital Committee
Oral evidence: Freedom of expression online

Economic Affairs Committee
Oral evidence: Quantitative Easing

European Union Committee
Oral evidence: Future UK-EU Relations: governance

Scottish Parliament 

Ministerial statement

Rural Economy and Connectivity Committee debate
Inquiry into construction and procurement of ferry vessels in Scotland

Stage 3: Scottish Parliament (Assistance for Political Parties) Bill

Environment, Climate Change and Land Reform Committee
Oral evidence: Climate Change Plan

Economy, Energy and Fair Work Committee
Oral evidence: Climate Change Plan

Health and Sport Committee
Oral evidence: Scottish Ambulance Service

European Union (Withdrawal) Act 2018

Justice Committee
Stage 2: Hate Crime and Public Order (Scotland) Bill

Delegated Powers and Law Reform Committee
Instruments: various

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