Brits, Beware of Trumps Bearing Trade Deals
Brexiteers celebrating the president-elect’s promise of a quick agreement with the U.S. should watch what they wish for.
It was a landmark speech on a generation-defining subject: The British public was, for the first time on Tuesday, hearing details about its government’s plans for exiting the European Union. And Prime Minister Theresa May picked the moment to brandish the words of the president-elect of the United States with a flourish.
Britain didn’t need Europe, she scoffed. It was going to “get out into the wider world,” trade with countries like China, Brazil, and the Gulf States. And then, the coup de grâs: “President-elect Trump has said Britain is not ‘at the back of the queue’ for a trade deal with the United States, the world’s biggest economy,” she said triumphantly, “but front of the line.”
On the face of it, this triumphalism is understandable. The boast was prompted by a garrulous interview of Trump, published in the Times of London this week, conducted by Michael Gove, a former Tory minister and arch-Euroskeptic MP, one whom May is known to dislike intensely. There was plenty in the interview for May to cringe at, not least Trump’s heaping of praise on Nigel Farage, the UK Independence Party anti-European demagogue, who is loathed by all senior British conservatives
But Trump also agreed with Gove on a subject very important to May at the moment, as she prepares to face negotiations with 27 other countries with few bargaining chips to play. The incoming president praised Britain’s decision to leave the European Union and offered a trade deal with the U.K. to replace access to the EU single market of 500 million middle-class consumers, which May has declared that she is intent on leaving. He also said that a U.S.-U.K. free-trade deal could be concluded “very quickly,” “properly,” and in a way that was “good for both sides.” (“Front of the line” was May’s interpretation.)
That May has an incentive to pretend this is a serious policy statement is clear. At the Davos World Economic Forum this week, global bankers and business leaders are queuing up for interviews to proclaim they will have to relocate to Europe when Britain cuts its unfettered trade links. For all the bluster of the British press, the U.K.’s hand in its coming negotiations with the EU 27 does not look promising. So Trump’s proclamation of a pending new U.K.-U.S. trade pact seemed like a lifeline for May and was quoted endlessly by Brexit cheerleaders in the run-up to her speech.
And yet, surely May knows better.
For one, legally, the U.K., which remains bound by legal EU treaty obligations for the moment, cannot begin, let alone conclude, trade talks until it has formally left the union. Under an optimistic schedule, that won’t be before April 2019 — presuming that May meets her end-of-March deadline for triggering Article 50, which will signal the start of the two-year exiting process, and isn’t held up by Supreme Court rulings, Northern Ireland elections, and other potential snags.
Even if negotiations on a trade deal began as quickly as possible, passing it would be no simple matter. For a lesson, one simply has to look at how efforts to get the U.S.-EU Transatlantic Trade and Investment Partnership deal, pushed by President Barack Obama for years, foundered on opposition in both America and Europe, and now appears to be dead in the water. Trump likely believes himself the man to do things that Obama could not. As it happens, however, it is the Congress, not the White House, that gets the final say on approving trade deals. Securing agreement from Congress typically requires navigating a thicket of competing interests from sectors ranging from labor unions, to environmental campaigners, to everyone who resents having an external supranational tribunal or court adjudicate when disputes arise. The idea that the United States and Britain would begin such a complicated and controversial round of talks in, or even close to, 2020, an election year in both countries, is far-fetched.
That all of this is conveniently swept aside highlights the fundamental folly at the heart of May’s enthusiasm for a speedy deal with the incoming Trump administration: Pinning Britain’s hopes on a quick agreement with the United States assumes a certain degree of concordance between the two nations and their governments. It presumes that the trade deal would be negotiated on the basis of a shared set of assumptions about what makes an agreement good or bad, and a generally shared set of standards about how the trading industries should operate.
This quite simply isn’t the case for Britain and America on a range of businesses. To take just a few examples: U.S. big pharma would surely love to find a route to the U.K.’s National Health Service, an institution as important and cherished by the Brits as the royal family. Rupert Murdoch and other American media moguls would be happy to see the BBC lose its protected status as a national body, paid for by a TV license fee and not paid-for advertising. American agro-giants would love to swamp Britain with hormone-stuffed meat and genetically modified food. The gaps between the United States and the U.K. on these issues are unlikely to be so large as to be unbridgeable — but doing so under deadline pressure, with a man who prides himself on putting “America First,” is a blueprint for a deal that the Brits, who were just recently cheering their move to the front of the queue, are unlikely to be happy with.
Moreover, raising the stakes of a fast deal with America risks putting May’s government in thrall to Trump, a politician who, for all his praise for Brexit, few Britons like, and with whose policies May is fundamentally at odds.
Trump’s dismissal of NATO as obsolete; his admiration for Russian President Vladimir Putin, whose agents have been accused of murdering Russian dissidents in London, as well as thwarting British support for anti-Assad forces in Syria; Trump’s reported reluctance on the subject of a two-state solution in Israel — all of these point to a massive gap between the utterances of the next U.S. president and the policy of the May administration.
In addition, Trump is promising Britain speedy trade deals and in the next breath alienating the very people whose goodwill May will need over the next two years. In addition to the jarring comments he made during his campaign and his fondness for Farage, scourge of Brussels, in his meandering, if vivid, interview with Gove, Trump took pains to point out that Europe was under the thumb of Germany and condemned Chancellor Angela Merkel’s decision to take in refugees fleeing the wars and destroyed states in Syria, Libya, and Iraq. He noted not only that he was pleased by Brexit, but that other countries would soon be joining Britain in quitting the EU. He expressed crude protectionist sentiments, threatening BMW with $35,000 tariffs on cars made in its Latin American plants. Hitting a German chancellor and iconic German companies is music to the ears of the ideological anti-Europeans in Britain, France, and elsewhere on the continent who obsess about the strength and centrality of Germany in today’s Europe, and is unlikely to endear Trump to the people May must win over.
In her speech this week, May sought to make clear that there are many yards of daylight between her administration and the incoming president. She insisted that while the U.K. would be leaving the single market — the EU’s proudest and most successful creation (and largely the work of former Prime Minister Margaret Thatcher) — it supported a strong and united Europe. In the news conference after her speech, May insisted on the importance of a two-state solution to the Israeli-Palestinian conflict.
Britain is on a major collision course with the rest of Europe and there will be testing negotiations on the terms of any withdrawal treaty for the U.K., which is due to be signed by March 2019. Several countries have suggested they won’t let Britain quit on easy terms: The Dutch deputy prime minister has threatened to bar any Brexit deal that doesn’t see the U.K. raise taxes, for fear that Britain will seek to become a tax haven after leaving the bloc. Politicians in Madrid have said they would like the U.K. to agree on joint sovereignty over Gibraltar as a condition for endorsing a deal. Dublin, meanwhile, is tearing its hair out at the thought of restoring hard, physical border controls on all roads that cross from Ireland into Northern Ireland, with customs checks on every truck, van and car if Britain is outside the EU customs union.
Trump’s Brexit boosterism, his promise of a U.S.-U.K. trade deal he cannot deliver, his gratuitous insults against the German chancellor, and his invitation to other EU countries to follow Britain’s example and walk out of the EU are eroding the Euroatlantic alliance in support of democracy, rule of law, liberal values, and open trade put in place since 1945. The ability to brandish an empty promise may be appealing in the short term. In the long term, none of this is any help to Theresa May.
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