Crypto News: Supply Lines: The full Windsor

The UK and European Union reached a new deal on commerce with Northern Ireland, a pact that once seemed impossible and threatened to spark a trade war as tensions rose in 2022.

Here's the Latest:

UK Prime Minister Rishi Sunak, clinching the agreement with European Commission President Ursula von der Leyen on Monday, said it took several "big steps forward" that include:

A "green" and "red lane" system, with goods traveling from Great Britain to Northern Ireland requiring less onerous checks and paperwork than those destined for the EU
Removal of existing requirements on trade from Northern Ireland to Great Britain, as well as on pets and parcels traveling between the two regions
The ability of the UK government to make decisions on value added tax and excise changes that could apply in Northern Ireland as well as Great Britain
Medicines approved by the UK regulator will automatically become available in Northern Ireland.

What Does It Mean?

The so-called "Windsor Framework" reduces hurdles to cross-border commerce between the UK and its largest trade partner. That means lower costs, faster transit and fewer bureaucratic headaches for British and European exporters.

Secondly, the deal helps rebuild a sense of trust and cooperation between Britain and Europe amid the uncertainty surrounding Russia's war with Ukraine and America's trade war with China.

Third, the agreement could help unlock progress on several unfinished Brexit issues, including a pending financial services pact and the UK's involvement in the EU's Horizon science funding program.

Finally, and perhaps most importantly for Britain, the move may have a positive effect on prospects for forging deeper economic ties between the UK and another key trading partner: the US.

A US trade deal — which Brexiteers viewed as a key dividend of the split from the EU — remains in limbo, due in part to President Joe Biden's concerns about protecting the Good Friday Agreement. Biden has been considering a visit in April to celebrate the 25th anniversary of Northern Ireland's peace treaty. (Here's Biden's statement from yesterday.)

Reading the Details

Meanwhile, as politicians debate the fine print, industry reaction yesterday was guardedly optimistic.

Logistics UK: The deal is "positive news for industry, and Logistics UK will now take time to work through the technical details with members."

Make UK: "Today's deal will remove customs checks and deliver free flow of goods from the rest of the UK into Northern Ireland, while at the same time protecting the EU's single market with scrutiny on goods destined for the Republic of Ireland."

British Chambers of Commerce: "We will be closely considering the legal texts and their full implications, but this appears to be a positive step toward achieving this goal. The Green Lane proposal should offer a green light to future prosperity in Northern Ireland. But more broadly businesses in the UK will welcome the potential for stabilizing relations with the EU."

Northern Ireland Retail Consortium: "It is positive to see both sides have agreed a permanent deal that addresses key issues such as controls on movement of goods, but it is difficult to be more definitive at this stage as the detail is key."

Northern Ireland Business Brexit Working Group: "Reaching an agreement is an important step in securing the stability and certainty businesses have been seeking. While we do not doubt that many issues will have been resolved, others may remain and/or arise in future, so we would encourage the UK and EU to continue with a constructive, solutions-focused approach as businesses adjust to the new arrangements."

—Brendan Murray in London and Bryce Baschuk in Geneva

Ifo

Germany recovers | The number of German companies reporting shortages of key materials has fallen to its lowest level since April 2021 as global supply chains recover from shock of the coronavirus pandemic. Just over 45% of companies reported deficits in February, according to a survey by the Ifo Institute, down from 48.4% a month earlier. The automotive industry had the highest share of bottlenecks, with almost three in four companies reporting shortages.

Dropping anchor | For a sign of how much global trade has slowed, look no further than idled container ships — unused vessel capacity is near the highest level since a spike after the start of the pandemic.
Power rivalries | The geopolitical crisis over Russia's invasion of Ukraine and growing US-China tensions have led to "slowbalization," where global integration is happening at a slower pace, according to retired General David Petraeus.
China plus one | Apple's Chinese suppliers are likely to move capacity out of the country far faster than many observers anticipate. Meanwhile, the Biden administration will require companies that tap $39 billion in funding for semiconductor manufacturing to provide affordable child care for their workers.
Fewer connections | The Covid pandemic led to a 30% drop in cross-border links between companies and their suppliers, but higher shipping volumes from more resilient producers cushioned the fallout, the Bank for International Settlements found.
Chip outlook | The semiconductor industry will return to an exponential growth path next year despite lingering inflationary and geopolitical uncertainties, according to machinery maker Tokyo Electron.
Pay increase | The Alphabet Workers Union said thousands of contract employees assessing the quality of Alphabet's Google search and advertising won a raise that brought workers' wages up to $15 an hour, following a Bloomberg report documenting allegedly inadequate pay and benefits.
Working conditions | Volkswagen reaffirmed its commitment to an automotive plant in Xinjiang after a visit by its China chief, despite persistent concerns of human rights abuses in the country's far western region.
Price pressures | French and Spanish inflation unexpectedly accelerated in February, increasing pressure on the European Central Bank to deliver more interest-rate hikes and raising political risks for the two countries' leaders.

Trucking rates | Rational pricing is likely to help ease challenges for most transportation companies from a slowing economy, rising costs and tough comparisons, though Bloomberg Intelligence expects the truckload industry may face rates pressure until the second half.
Shifting demand | Maersk CEO Vincent Clerc says a plan to almost double revenue from contract logistics services reflects demand from customers, according to Borsen.
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