Agreements, Disagreements, Trade Wars between the USA, NAFTA, CHINA and the EU- Finding Practical Solutions.

by David Bryan

Trade differences, deficits, surpluses must be resolved amicably between the parties in order to avoid the escalation of any trade war and or the imposition of further tariffs by the respective countries.

It is time to negotiate and settle all disagreements at the table concerning the following:-

1.  NAFTA

USA, Canada and Mexico

‘An update to the dated agreement that’s favored by all parties’ were expectations have to be realistic and that parties acknowledge whether there is unfair practice, surpluses and deficits in the noted areas in order to resolve said differences.

2.     Trade WITH China

‘Fairer trade for U.S. companies (and the tech industry in particular), plus more help from China’ in helping reduce the deficit.

The possibility of a framework agreement between the two countries on mapping the way forward on trade to de-escalate the imposition of tariffs and barriers by the USA and China.

It does no good for the world to have China and the USA at war in trade. No winners in such a result.

Expectations have to be realistic and that parties acknowledge whether there is unfair practice, surpluses and deficits in the noted areas in order to resolve said differences.

 

3.     Trade with the European Union

‘Reopening negotiations for a trade agreement, like the Trans-Atlantic Trade and Investment Partnership, would reduce barriers to trade between the U.S. and the EU.’

It does no good for the world to have the EU and the USA at war in trade.  Again, there are no winners in such a result.

Expectations have to be realistic and that parties acknowledge whether there are unfair  trade practices, surpluses and deficits in the noted areas in order to resolve said differences.

 

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Barbados and its Sovereign Debt

I am of the humble opinion that if Barbados is to restructure its debt; it can do so while paying for and making all of its debt obligations to its external and domestic creditors; including but not limited to “interest payment due on its 6.625 per cent notes due in 2035; and the domestic bond maturity of the $100 million 4.375 per cent Treasury notes due in June 30.”

Barbados has never missed payments on its foreign and local currency debt and it cannot be blamed on the new BLP administration led by the Honourable Prime Minister Mia Mottley, Q.C.  She has inherited an economic chaotic situation that will take time to unravel and get out with the help of the IMF and financial institutions.

If, the last administration was able to never miss a payment, albeit they recklessly placed the Barbados economy in dire straits, this BLP administration has the capability of matching and surpassing that by returning our country to a level of economic wellness and prosperity.

Even though, it is unknown to the extent of the debt burdening this country, it is not impossible, perhaps on the face of it, improbable, that such payments can continue parallel  to the debt-structuring programme.

Barbados and Barbadians have not only been a resilient people but in tough economic times a resourceful people in meeting the challenges head-on that confront its economy today.

 

The Iran Nuclear Deal and the Doctrine of Mistake.

By David Bryan

The trove of declassified information that the Prime Minister of Israel Benjamin Netanyahu released on Monday May 1, 2018 to the world cannot be dismissed as trifling. His decision to do so, would no doubt come at great deliberation, to present the picture of the truth, and only the truth.

The essential take away from the Prime Minister’s revelations is that Iran lied about its nuclear program in deed, word and spirit to the contracting nations made up of United States, United Kingdom, France, Germany, Russia and China whilst negotiating the nuclear agreement or deal.

The extraordinary lengths to which Iran went to conceal its true nuclear ambitions is a testament to its conduct and deliberate intentions to throw the negotiators off the trail indefinitely, and together with this voluminous expose; it must now, carry substantial weight in the path of reassessing this nuclear deal.

But, even in light of all that was shown, which goes directly; not only to the root but flies in the face of the agreement being negotiated in good faith, it appears it has done nothing in moving the needle; especially when one hears such remarks that this is the reason for entering into the agreement with Iran, because Iran cannot be trusted, or that one was not naïve in the negotiations. This misses the crucial point and over-simplifies the fundamental issue at hand.

Surely, Prime Minister Netanyahu’s presentation intent was to break the logjam concerning the signatories’ ability to objectively look at the deal with a new fresh perspective which would entail ‘fixing or nixing’ the deal instead of adopting a defensive posture.

Contextually, having obtained such specialized knowledge regarding the pre-2015 nuclear program of Iran, the real question one has to ask is; whether the signatories would have entered into the same exact deal on the same exact terms. It is difficult to say otherwise and doubtful to state yes.

Doubtful is emphasized, simply because some commentators are forgetting to remember the numero uno point: that this deal is an executed lawful binding agreement or contract. An agreement, which is in fact, is not governed by statements but by the law.

Naturally then, how would the law be applied to this agreement, given now; this new set of circumstances. In short, the common law concerning this type of situation is albeit narrow and limited but made abundantly clear under the doctrine of mistake.

Generally speaking, “the most difficult and perhaps most important type of mistake occurs where the parties share a common misunderstanding which is in some way material to their respective decisions to enter into the agreement, and where the true state of affairs is only discovered after objective agreement has apparently been reached, whereupon only one of the parties wishes to withdraw from the agreement. Such mistakes are sometimes referred to as ‘common’, sometimes ‘misleading’ as ‘mutual’, and sometimes as ‘mistakes nullifying consent’.”

Where such circumstances exist as to mistake, the common law rule is basically stating “where both parties entered into a contract believing something to be true which was later found not to be true the contract has been declared void.

The leading case is the House of Lords case of Bell v. Lever Brothers Limited [1932] AC 161; were the speech of the majority was given by Lord Atkin who postulated the question: ‘ Does the state of the new facts destroy the identity of the subject-matter as it was in the original state of facts?’

The identity of the subject-matter in this case can be presumed to be the capability of Iran’s ability to enrich uranium and the time it takes to achieve that result for a nuclear weapon. This is of the uptmost importance, since the deal hinged and was signed on a false assumption that there was no nuclear program to that effect being conducted by the Iranians pre-2015.

This issue was addressed by Lord Atkin’s in his scholarly judgment, quipped:

“ Sir John Simon formulated for the assistance of your Lordships a proposition which should be recorded” “whenever it is to be inferred from the terms of the contract or its surrounding circumstances that the consensus has been reached upon the basis of a particular contractual assumption, and that assumption is not true, the contract is avoided: i.e, it is void ab initio if the assumption is of  present fact and it ceases to bind if the assumption is of future fact.”

Lord Atkin’s went on to state concomitantly of the meaning of “a contractual assumption”;

“ I think few would demur to this statement, but its value depends upon the meaning of “ a contractual assumption,” and also upon the true meaning to be attached to “basis,” a metaphor which may mislead. When used expressly in contracts, for instance, in policies of insurance, which state that the truth of the statements in the proposal is to be the basis of the contract of insurance, the meaning is clear. The truth of the statements is made a condition of the contract, which failing, the contract is void unless the condition is waived. The proposition does not amount to more than this: that, if the contract expressively or impliedly contains a term that a particular assumption is a condition of the contract, the contract is avoided if the assumption is not true.’

Lord Atkins, then logically stated that “various words are to be found to define the state of things which make a condition.” In contemplation of both parties fundamental to the continued validity of the contract,” “ a foundational essential to its existence,” “ a fundamental reason for making it” are phrases found… in the present case….But “ a fundamental reason for making a contract” may, with respect, be misleading.”

He said:-

“Nothing is more dangerous than to allow oneself liberty…,by importing implications which would appear to make the contract more businesslike or more just. The implications to be made are to be more than are “necessary” for giving business efficacy to the transaction, and it appears to me that, both as to existing facts and future facts, a condition would not be implied unless the new state of facts makes a contract something different in kind from the contract in the original state of facts”

From Bell’s case, it can be concluded; that the fundamental reason for making a contract with Iran, because Iran was untrustworthy is immaterial. What is material are the condition assumptions of the statements of truth, at the time of the signing of the Iran deal.

There are 110,000 files together with 183 disc, showing the true condition of statements of truth which proves the assumption that Iran did in fact had a nuclear program pre-2015; which Iran repeatedly vehemently denied existed at the time of negotiating the nuclear deal.

These new facts, destroys the identity of the subject matter of this agreement which was not only relative but germane to the deal. This intellectual dishonesty cannot therefore be arbitrarily being discounted.

Rather, either the deal is declared (i) void, which may present practical challenges, or (ii) a new deal is renegotiated altogether and or (iii) the deal is amended to encapsulate clauses that reflect, confirmation of the reality of Iran’s blatant bold-face dishonesty.

 

 

 

“I have a Dream that One Day…”

By  David Bryan

1. “I have a dream that one day” the beautiful children whose lives were cut short in the halls of innocence in Columbine, Newtown Sandy Hook, Stoneman Douglas High School and all others will always be the angels of our faith leading us on through the foot paths of inspiration to do more too protect the living; whilst celebrating how they lived and not dwelling on how they tragically lost their precious lives.

2.“I have a dream that one day little boys and little girls” and teenage children no longer will have to go to school under the cloud of anxiety and fear of constant threats to their lives that they can die in the classrooms, in the corridors and in the cafeterias.

3.“ I have a dream that one day” the schools across America will just be as safe as any other school in Israel, in the United Kingdom, in Canada, in Australia, in France and in Germany; just as safe as any airport; just as safe as any state legislature.

4.“ I have a dream that one day” sensible and practical gun safety laws will be passed soon in every State in the USA.

5. “I have a dream that one day” stricter background checks, raising the age limits and ‘red-flag laws’ will be seen as a means to an end and not end the means of gun safety.

6.“I have a dream that one day” that the gun lobby groups will no longer have the keys to the doors of Congress and the pockets of politicians and that the locks will hereafter be forever changed to open the doors of gun justice in the country.

7.“I have a dream that one day” the duly elected representatives of Congress both in the House and in the Senate will vote with their conscience of righteousness and pass bipartisan gun safety legislation thereby reducing violence by the gun and gun by violence in the neighbourhoods, in the cities, in the towns and in the capitals.

8.“I have a dream that one day” that citizens of all walks of life will see gun safety not as an erosion of the 2nd Amendment right to bear arms under the Constitution but to embrace and equate it with the inalienable right to protect life guaranteed under the Constitution.

9.“I have a dream that one day” money is no longer used as the weapon of choice by gun lobbyist to stop Congress from voting against banning the real gun of choice; the assault weapon.

10.“I have a dream that one day” that on March 24, 2018, the March For Our Lives will be a Million strong march not only for kids, but for parents, relatives, friends of victims of gun violence; the young and the old; black and white; Hispanic and Asian; ‘Jew, Arab, Gentile, Christian, Evangelical, Protestant and Catholic’; Muslim and Hindu; for all people of and for gun safety and against gun violence, to tell the leaders of this great nation under God, as Jesus cried “It is finished”. No longer will we sing the tune of inaction; but action; is and will be the only sound that must be heard. To safeguard the lives of future generations; to protect the wealth in our children and the treasure of their lives so that ‘We the People’ will utter and advance in one voice: Not Retreating Anymore; Not Retreating Anymore, until the scourge of mass shooting is wiped out from these United States of America.

11.“ I have a dream that one day”.

DOW + (-666.75) = Opportunity

By David Bryan

Even though the market saw its biggest losses since 2016; were the Dow Jones Industrial Average fell some 665.75 % or -2.54%; moving under 26,000 on February 2, 2018; the stock market is resilient to the type of shocks that reverberated in 2008.

In the context, a 665.75 % point drop then; would not of garnered the same result now. In  2008 the market had all conditions for a perfect financial contagion. However, in 2018 analyst see last Friday’s drop as a minor correction and as a barometer for gauging the temperature for investor’s concerns about raising interest rates, inflation and a positive labour/wage sector.

The market is not sick as in 2008; but can be viewed as catching a slight infection;  which is strongly believed will be flushed out with the medicine of a return, to  the confidence of traders, seeking to invest – in the opportunity to buy stocks at a lower than available price index at the opening bell this week.

Continuation of a stellar year of investor confidence for the markets across the board is expected and will be reflected with gains throughout 2018.

Carillion: Too Many Jobs Too Lose

“The state also has a role to play when things go wrong and companies fail, as Carillion did last week. Not by bailing out the directors with a blank cheque – it will be the shareholders of Carillion, not taxpayers, who pay the price for the company’s collapse – but by stepping in and supporting those affected.”

Prime Minister Theresa May

By David Bryan

Carillion, the United Kingdom’s conglomerate found itself in dire financial straits because responsible banking institutions decided they will no longer fund the lifestyle of ‘the mind and management’ of the company. They therefore rejected a 300 million pound tranche of financing to sustain its operations in the short term. In simple terms, the maths did not add up at Carillion, especially taken into consideration; it held a large portfolio of the UK’s Government services.

It is obvious, that Carillion used its leverage and future generating contractual income in its fixed term contracts with the government to secure funding for its cash flow over time, but it’s quick fixes ran out as fast as the cash came in; creating a financial vacuum whereby,  coupled with its mammoth 900 million pounds debt the company operations became unsustainable.

By that, it meant in real terms, the company had no money to pay for its day to day operations, salaries,expenses,creditors and debt- enter liquidation. We have all seen this scenario before, during the Great Recession in the USA and Europe. To invoke the cliche: there is no need to re-invent the wheel; only to tweak it according to the particular circumstances as with the case of Carillion.

There are now many companies who can boast that they were in the same position as Carillion in that era, but have come out of the red and are enjoying healthy returns on investment and once again profitable. This success did not happen overnight. It was painstaking and laborious , diligent and industrious work put in on behalf of the stakeholders; the government and  the management.

It was a plan that saw companies in the automobile industry and financial sector recover from the brink of collapse , which too can be adopted by Carillion.

Prime Minister Theresa May has stated it correctly, that the state has a role to play, when companies like Carillion fail, by stepping in and supporting those effected. How far the state goes must be determined by not only whether the company is too big too fail but that there are too many jobs too lose, which would have a negative direct impact on the economy.

In the case of Carillion, indeed there are Too Many Jobs Too Lose. At present 43,000 jobs are at risk worldwide , 19,500 in the UK alone who work in public sector jobs, such as the NHS, as cleaners and in school catering ; in addition -small suppliers  are also exposed- perhaps, approximately some 250,000 jobs indirectly from 30,000 small businesses. The 13 Pension Schemes must be also taken into consideration in the event of insolvency.

It is agreed that there has to be accountability for the mismanagement of Carillion, and the Shareholders have to pay since government will not write a blank cheque to bail out the directors.

However the Government, in the circumstances, must consider ‘bailing out’ the company and not the directors; given the mass amount of lay-offs envisioned if Carillion is eventually  liquidated.

It is believed that the wrong approach is being applied to Carillion, and the overall strategy should be saving Carillion; if there is to be continuity of the company to pay back the government; which has already intervened by continuing to  pay directly UK’s Carillion’s staff, but what about the other ‘273,000 employees’?

The government intention must be therefore; to save the company from going under,to help retain as far as possible  all 293,000 jobs directly and or indirectly associated with Carillion.

Re-calibrate  Carillion’s plan of liquidation and the selling off its assets, by maintaining the company as a going concern, return it too profitability and or sell it to a new entity thereafter. By so doing it will preserve the company, its employees, contracts, assets and pension schemes.

The State has already intervened by paying salaries, the question here, is quantum. The state therefore needs to secure any future injection of taxpayers’ money, which at the end of the day will be lost on the company being  made insolvent.

Thus, the government should seek a comprehensive plan to inject the require liquidity, but not before the removal of all current directors of the Board of Carillion, appointing a new Board and management, the issuance and allocation of  shares in favour of the government, securing the ‘loan’ by way of debenture over the assets of the company until such time the company is able to repay all monies invested by the government.  At that juncture, the state will have a option to sell its shares back or to a new entity.

Such an arrangement can be facilitated by independent management agreements which can go hand in hand with any judicial actions by the government appointed ‘liquidator’ whose primary focus now is not to sell the family silver but preserve it in order for the company to:-

  1. keep the current jobs of all the employees including those of the suppliers;
  2. pay outstanding creditors;
  3. return the company to profitability through disciplined management; (i) Quarterly reporting of company’s performance (ii) Monthly financial reports etc
  4. carry out a forensic audit;

Directors

Prime Minister May alluded to her government’s stance on the fat cat syndrome which no doubt has plagued Carillion. Mrs May stated:-

And, for the first time, businesses will have to demonstrate that they have taken into account the long-term consequences of their decisions. Too often, we’ve seen top executives reaping big bonuses for recklessly putting short-term profit ahead of long-term success. Our best businesses know that is not a responsible way to run a company and those who do so will be forced to explain themselves.

The English common law provides numerous examples were directors are obliged to refund that part of money paid which was not a ‘genuine award of remuneration’ but a disguised gift out of capital’ and as unauthorised return of capital, a sale of land made at undervalue by a company to another company controlled by its principal shareholders. [Aveling Barford Ltd. Perion Ltd (1989)]

Finally, any action of government intervention during this time “effects the best prospects for preserving the company’s future and maximising the realization of the company’s assets for the benefit of its” employees, creditors[Re: Harris Simons Construction Ltd (1989) 1WLR 368] and the economy of the United Kingdom.

 

 

 

 

‘Compassion’ is the “Bill of Love’ Needed to Protect DACA Immigrants.

By David Bryan

The epitome of the DACA program can be summed up in the story of Jorge Garcia, who came to the USA when he was 10, married , became a father of a 15 year old daughter and 12 year old son. The Michigan resident, being 39 years old was too old to qualify for the DACA and as a consequence was deported this week back to his country Mexico.

The story doesn’t end there, but really starts when Garcia was faced with a removal order in 2009, but his deportation was stayed and extended under the Obama administration. For the Garcias; the program for his extension was halted under the new administration of President Trump.

On the surface of it, it is easy for the critics to apportion that it is the current administration who is at fault. But who is really to blame for Mr. Garcis’s predicament? Is it the Democrats or the Republicans? The law enforcement officials? The judges; the lawmakers?

It was and is the entire system that failed Mr. Garcia. The system of patch-work; that defies common-sense; continuity and the ability to be rationale on behalf of DACA receipts and their parents in order for them to have a peace of mind in 2018. Note: Mr Garcia was in the USA for 30 (Thirty) years and he is too old for the program.

For a system to demand the removal of an undocumented immigrant after he was allowed an extension under a previous government but now deport him, separate him from his family-together with the fact that it is presumed he paid taxes, reported to the immigration officials indicating his whereabouts and had no criminal record- after three decades is cruel and inhumane.

Such a system requires overhaul from top to bottom.

I crave the indulgence of the reader; but Mr. Garcia’s story reminds me of a criminal case I heard about earlier in my legal career, and which has always remained with me until this day.

There was a particular prisoner warder who come down every morning and visit the inmates on death row. The warder; would ceremoniously walked up and down the hall; bringing a terrible fear to the inmates; who were wandering if today was their day, that the warder would read out their death warrant for them to be hanged on the gallows.

It was determined by the court that this conduct by the warder amounted to cruel and inhumane punishment for the prisoners and rightfully so,since the prison warder should of known his actions would of tormented the already condemned men.

Without any reasonable doubt, it is certain to say that the  decision, to deport undocumented immigrants like Mr. Garcia, whose life was terminated  with his family in the USA by being deported back to his country, was cruel and inhumane.

This brings me to another point; as to why the Democrats, who say they are genuinely for the DACA recipients have not rushed to sign a deal with the GOP? Why,if the DACA immigrants are central , and are a priority have they not conceded to President Trump’s request to fund the border wall?

Some put forward the legitimate excuse that it was the words uttered at last Thursday’s meeting by President Trump that derailed the bipartisan talks. Any comment from anyone were the allegation is true, of any such language, cannot be condoned, but however, it is still important for the elected representatives to return to the business of governing the country in order to :-

  1. Ensure protection to the DACA or ‘Dreamers’ in the USA.
  2. Fund the border wall.
  3. Extend the Children Health Insurance Program.
  4. Health Care Taxes.
  5. Avoid at all costs a government shutdown in the short-term so that the government would be running uninterrupted.

It is unfortunate that the talks were sent in another direction and went off-topic but as Chester Karass stated :-

“even when things are not going well, maintaining the initiative under adverse conditions is a common but difficult problem in negotiation. People are taken aback by unfavourable statements and arguments from the other side. Most become reluctant to assert themselves when caught in a mistake or when aggressively challenged by another person. Few like to be contradicted in daily life. Unfortunately, negotiation is one part of life fraught with contradiction and , all too often, intense confrontation.”

But negotiation is also about granting concessions, Senator Lindsay Graham((R.S.C) put in practically when he said :-

 it was clear that both President Trump and Democrats, particularly Sen. Dick Durbin (Ill.), wanted to strike a deal, but that both sides would have to compromise to get there.”

The South Carolina Republican said that

there appeared to be “two Trumps”: one who spoke with compassion at an initial meeting with lawmakers from both parties as cameras rolled; and the other who at a closed-door meeting rejected a bipartisan proposal later in the week … So Tuesday, we had a president that… who understood immigration had to be bipartisan, you had to have border security as essential, you have border security with a wall, but he also understood the idea that we had to do it with compassion,” Graham said.

The Senator added “I don’t know were that guy went, but “I want him back”.