Obama announces his re-election bid

President Obama promises to run an innovative campaign, but it could cost $1bn.

And – he's off. Barack Obama has officially announced his re-election bid, after one of Washington's worst-guarded secrets. In typical tech-savvy style, it was first revealed in emails and text messages to grass-roots supporters, with a short video on barackobama.com – before the neccessary papers were filed with the Federal Election Commission.

Everything was already in place – the 2012 website complete with all-important donation button, the campaign HQ in Chicago . . . and running the whole show is the former White House deputy chief of staff Jim Messina, unusually ensconced in that high-rise Chicago office some 700 miles from Washington, DC.

David Plouffe, who ran Obama's victorious campaign three years ago, told the New York Times that Messina's team was "going to innovate – and make what we did in 2008 seem somewhat prehistoric". Hard to see what they could do to transform the campaign paradigm this time around, but let's wait and see.

One thing, of course, hasn't changed – cold, hard cash: Messina has already been wooing potential donors and Obama has got a series of fundraisers in the diary, all aimed at attracting up to a billion dollars (yes, you read it right) even though he's extremely unlikely to face any challengers at the primary stage. If he meets that target (and a $30,000-a-head dinner at Harlem's Red Rooster restaurant plus a New York reception the other week managed to pull in a cool $1.5m), he'll become the first billion-dollar presidential candidate, at the helm of the most expensive campaign ever.

In contrast to 2008, the bulk of the money will be raised not from the grass roots, but from wealthy backers with deep pockets. Messina has already asked them to bring in at least $350,000 each this year – not exactly small change. But all neccessary to combat the Republicans' formidable money machine – its own party coffers boosted by groups like American Crossroads, which hauled in millions for the midterms in 2010.

So let's assume he gets the money: what are the odds for 2012? It's usually hard to beat an incumbent, and even though Obama's ratings are hardly stellar, there aren't exactly any standout stars in the Republican field. Indeed, none of the various runners and riders has yet declared officially.

Reasons to be cheerful?

After months of uncertainty, however, the planned 4 April launch date is feeling like pretty good timing for the White House – the Democrats have been cheered by the latest jobless figures, down to 8.8 per cent, with almost a million and a half jobs created this year.

It all offers some hope that the economy could start rebounding just in time for next November's poll. Battles over spending cuts and union rights in key states such as Wisconsin have also rallied the Democratic base.

Yet there are considerable hurdles to leap – not least the fight over this year's federal budget and the threat of a government shutdown, still very much alive. Despite the administration's best efforts, the flagship health-care reforms are no more popular now than they were a year ago, while the stimulus bill has not yet proved its electoral worth.

Most urgently, Obama is grappling with a series of crises overseas, the military intervention in Libya holding out the prospect of a long-drawn-out commitment by US forces.

So the next 18 months are all about "winning the future" – the Obama slogan that's meant to transcend talk of hope and change. Once again, the key is energising his core supporters – including those young people who were the heart and soul of the triumph in 2008 – and reaching out to those independents who are wavering over the choice ahead.

The presidential battle is joined. Now it's up to the Republican hopefuls to put their head above ground and enter the race for real.

Felicity Spector is a deputy programme editor for Channel 4 News.

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.