Coronavirus: United Kingdom, facing worst recession on record, sees GDP drop 20.4% in Q2

The UK has seen its economy, hit by the coronavirus crisis, suffer a "record" contraction of 20.4% in the second quarter, and is officially facing its worst recession on record, agency figures show National Statistics (ONS), published Wednesday 12 August. 
Economists consider that a country enters a technical recession when it accumulates two consecutive quarters of contraction in its economy. According to the ONS, most of the contraction, which began to be felt in March, occurred in April, an entire month of containment and almost total cessation of activity in the country, which saw production collapsed by 20%.

With a very early recovery in construction sites and manufacturing activity, gross domestic product (GDP) rebounded in May by 2.4% (revised figure), followed by an acceleration in June (+8.7 %) thanks in particular to the reopening of all shops. This is the biggest contraction in the UK economy since the ONS began these quarterly statistics in 1955, he said…

Modest spinoffs in sight for CUMA

Canada will be richer by almost $ 7 billion and 38,000 jobs with the new Canada – United States – Mexico Agreement (CUMA) than if Donald Trump had followed through on his threat and simply removed his country from any free trade, says Ottawa.

Canada – United States – Mexico Agreement (CUMA)

Economists at the federal Department of International Trade on Wednesday unveiled the impact study of the CUMA that opposition parties have been eagerly demanding for weeks.

The 82-page document predicts a modest net gain of $ 6.8 billion, equivalent to a quarter (0.249%) of a percentage point of Canada's gross domestic product (GDP), maintaining 38,000 jobs, equivalent to one-sixth of 1 % (0.16%) of the Canadian total, and actual wage increases of half a percentage point (0.504%).

These gains were calculated not from what Canada already had with the North American Free Trade Agreement (NAFTA) since 1994, but from the situation that would have prevailed if, instead of leading to a ACEUM, the NAFTA renewal negotiations had failed and the American president had followed through on his threat to withdraw his country from any trade agreement with Canada. In this case, the basic rules of the World Trade Organization (WTO) would have applied, explain the authors of the impact study, and Canada and Mexico would not benefit either. special exemption from Donald Trump's trade tariffs in steel and aluminum.

Representatives of the opposition parties on the parliamentary committee responsible for examining the UCCA with a view to its ratification did not hide their dissatisfaction on Wednesday. First of all for having waited so long for the impact study of an agreement concluded in November 2018 and to which only a few modifications were made last December. But also so as not to be able to compare the reality at the time of NAFTA with that which will apply if Canada decides to imitate the United States and Mexico and in turn ratifies the CUMA.

" I am very disappointed. […] How are we supposed to get an idea of ​​the impact of the new agreement compared to what we already have? Asked Conservative MP Randy Hoback.

It was immediately clear on the Canadian side that a status quo with NAFTA was not one of the options offered by the President in Canada, said International Trade chief economist Marie-France Paquet . "Only two options were presented to us: a new agreement or no agreement and tariffs. "

In its own impact study released in April, the United States compared the AUMCA and NAFTA. Here, too, there were modest economic spinoffs that could range from a net loss of US $ 23 billion (–0.12% of GDP) to a gain of US $ 235 billion (1.21%) according to relative importance given to the climate of uncertainty.

"We know that uncertainty can have a big impact on economic activity, but it's very difficult to measure. We have not tried to do it, "said Marie-France Paquet.

The CD Howe Institute offered its own economic impact study this summer, in which it did not seek to measure the effect on uncertainty either, but concluded that the passage of the NAFTA at CUMA would result in a net loss to Canada of $ 10 billion (0.4% of GDP). The study, however, was based on some questionable assumptions, observed the economist.

In all cases, it is concluded that the increase in the minimum North American content required in automobile manufacturing will translate into a modest increase in the price of vehicles and, consequently, a decrease in their sales.