Talks are set to continue between the UK and the EU as it was warned the two sides were still far apart on issues surrounding the Northern Ireland Protocol.
UK officials described as “constructive” the first round of talks in Brussels this week, which came after the EU proposed new measures earlier this month.
It is understood that while there was common ground in some areas, there were still substantial gaps on what were seen as fundamental issues mainly surrounding governance.
Sources close to the negotiations said “real progress” must be made soon and a process of “endless negotiation” must be avoided. But reports over Christmas crackers being delayed by the protocol was “yet another practical example” of the disruption caused by the agreement.
A team from the European Commission is set to travel to London on Tuesday for several days of intensive discussions.
Brexit minister Lord Frost and EU Commission Vice President Sefcovic are then due to meet in person in Westminster for talks at the end of the week.
The two leaders will take stock and assess progress so far.
A UK Government source said: “The talks this week were constructive and we’ve heard some things from the EU that we can work with – but the reality is that we are still far apart on the big issues, especially governance.
“There’s been plenty of speculation about governance this week but our position remains unchanged: the role of the European Court of Justice (ECJ) in resolving disputes between the UK and EU must end.
“We need to see real progress soon rather than get stuck in a process of endless negotiation because the issues on the ground in Northern Ireland haven’t gone away.
“Whether we’re able to establish that momentum soon will help us determine if we can bridge the gap or if we need to use Article 16 to safeguard the Belfast (Good Friday) Agreement”.
The protocol, which was agreed by the EU and UK to maintain a free-flowing land border on the island of Ireland, has created a series of economic barriers on the movement of goods from Great Britain to Northern Ireland.
Measures proposed by the EU would see an 80% reduction in checks envisaged for retail agri-food products arriving in Northern Ireland from Great Britain.
The proposed changes also remove the prospect of certain British produce, including Cumberland sausages, being banned from export to the region.
The EU plan to ease the resultant trade friction also includes a 50 per cent reduction in customs paperwork required.
And more products and companies would be exempt from customs tariffs as a result of expanding trusted trader arrangements and a concept that differentiates between goods destined for Northern Ireland and those “at risk” of onward transportation into the Irish Republic.
The EU has also offered to legislate to ensure no disruption to the supply line of medicines from Great Britain to Northern Ireland.
However, the measures contained in four separate papers published by the bloc do not offer any concession on a key UK Government demand, the removal of the oversight role for the ECJ.
Lord Frost has made clear the removal of the court’s oversight function in policing the protocol is a red line for the Government if a compromise deal is to be struck.
Under the terms of the protocol, which was agreed by the UK and EU as part of the 2020 Withdrawal Agreement, the ECJ would be the final arbitrator in any future trade dispute between the two parties on the operation of the protocol.
The UK now wants to remove that provision and replace it with an independent arbitration process.
The European Commission has insisted it will not move on the ECJ issue.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
