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A transatlantic zero-sum game

by
03 February 2017

The UK will not benefit from a post-Brexit trade deal with the United States, says Nick Dearden

PA

“Shared ambition”: Mrs May and President Trump at the White House last Friday

“Shared ambition”: Mrs May and President Trump at the White House last Friday

THE Prime Minister emerged from the White House last Friday brimming with enthusiasm, having met Donald Trump for the first time since he was sworn in as President of the United States (News, 27 January). Mrs May told reporters that she and President Trump had “agreed a shared ambition . . . for a Trade Negotiation Agreement that will benefit both our countries. This is the first step leading to a future trade deal with the US which could provide huge benefits to our economic muscle, and will give businesses additional certainty and confidence.”

There are reasons that this should ring alarm bells. The first broad concern is that President Trump has said, unequivocally, that he will make only trade deals that put the US first. Mrs May, meanwhile, is desperate to sign anything that shows that the UK has a trading future outside the European single market. That power imbalance means that Mrs May is likely to concede all manner of ground to the President for the sake of trying to shore up her own political credibility. Those concessions will carry a heavy price for British citizens.

But there are several more specific concerns. Modern trade agreements are increasingly not about tariffs — the UK already has very low tariffs with the US — but about making sure that laws and regulations do not obstruct the free flow of capital. These “obstructions” are likely to include public services such as the NHS, labour rights, consumer standards, and environmental protection.

Protecting the NHS has been one of the most prominent issues in all the recent campaigns to oppose toxic trade-deals, and that is no exception for the possible US-UK deal. The US’s huge private health-care industry positively drools over the idea of getting its hands on the NHS. Any trade deal that the UK made would be pushed by these health-care interests’ trying to lock in further liberalisation of our health service. Even at this early stage, Mrs May has refused to rule out the possibility that the NHS would be on the table during these trade talks.

Food safety standards are another potential casualty of a US-UK trade deal. The US has always said that European food and farming regulations — which prevent the sort of high-intensity, high-chemical, low-animal welfare farming common in the US — are a “trade barrier”. It is likely that any deal would look at stripping away regulations on genetic modification, antibiotics, and the use of hormones in farming. This would open up British small farmers to devastating competition from American agribusiness.

While, traditionally, the US has been more progressive on financial regulation than the UK, President Trump has already promised to sweep away Barack Obama’s post-crash financial laws. That will be welcomed by the City of London, which will want to use a trade agreement to lock in financial deregulation, making proposals to break up big banks or impose a financial-transactions tax extremely difficult. With Chancellor Philip Hammond’s threat of aggressive tax changes after Brexit, economic inequality in UK could get worse, with the super rich contributing less and less to the public purse, leading to failing public services being used to justify their privatisation.

One of the most controversial aspects of recent EU trade deals has been that of “corporate courts”, whereby corporations are able to sue governments in secretive courts for enormous sums of money for bringing in laws that might harm their profits, such as a ban on fracking or the introduction of plain packaging on cigarettes. President Trump’s nominee for Commerce Secretary, Wilbur Ross, who is expected to shape trade policy in the new administration, has already told Congress that he wants to present other countries with a “take it or leave it” model that includes stronger “enforcement mechanisms”. This is likely to mean a more extreme version of the “corporate courts” system.

 

IN HIS inauguration speech, President Trump appealed nakedly to nationalist sentiment, reinforcing his view that trade is a matter of win or lose, not of mutual exchange and benefit. He cares only that the US and American companies should win, at the rest of the world’s expense.

Thankfully, Mrs May is legally unable to start official negotiations with President Trump until Brexit happens and the UK is formally separated from the EU trading bloc. The successful public outcry against the Transatlantic Trade and Investment Partnership between the US and the EU (Comment, 18 November) shows that the public has become increasingly savvy about the numerous devils in the small-print details of these trade deals.

The rise of Trump and right-wing populism across Europe have been fuelled by a broken economic system, which puts the demands of the “one per cent” ahead of the rights and needs of the vast majority of humanity. It is likely that a US-UK trade deal would deepen this inequality rather than foster the sort of economic policies that could combat poverty, inequality, and climate change.

However they voted in the EU referendum, most people in Britain want to live in a peaceful and humane world, where a more equally shared prosperity is based upon mutual exchange with other countries — not a winner-takes-all deal in which the UK is the sore loser.

Nick Dearden is the director of Global Justice Now. www.globaljustice.org.uk

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