In this week’s Brexit Deconstructed, JAMES BALL discusses how Trump’s ‘America First’ policy is bad news for the UK
The UK is leaving the largest economic union of nations on the planet – which also happens to be right on its doorstep – and pinning its hopes on a new deal with the second largest.
Theresa May has finally acknowledged Brexit will not come without consequences: leaving the single market and customs union will mean there are some new barriers to trading with our nearest neighbours. These may be far more serious than May is currently spelling out, especially as the UK relies on selling services overseas, something which is not covered in most trade deals. This makes securing new post-Brexit trade deals absolutely critical to the future of the UK.
Unfortunately for the UK, that second-largest economic union is led by none other than Donald J Trump, in whose tiny ‘America First’ hands any potential trade deal lies.
Trade deals can benefit both parties, but involve heavy negotiation: each country will try to get a deal weighted heavily in its favour, and will use every bit of negotiating leverage it has to hand. Britain has already decided to leave its main trading union, and has a ticking clock on the departure date – and the governing party has staked much of its reputation on securing a deal. That puts virtually all of the cards in the USA’s hands.
Worse still, we know how they are going to play them. Despite promises during the election campaign to put Britain to the ‘front of the queue’ for a trade deal, Trump has shown little interest in helping out the UK. Last week the president surprised foreign countries, domestic media, and even his own Republican party with a shock announcement of a new tariff of 25% on steel imports. Around 15% of UK steel is sold to the US – around £360m worth a year – and Trump has made no offer to exclude the UK from his new tax, despite the potentially devastating affect on an already struggling industry.
Trump’s style, instincts, and most famous policy platforms are ‘America First’. He is the president who starts his days tweeting about the unfairness of the USA’s existing and painstakingly negotiated trade deals, pledging either to rip them up or rewrite them. And yet the UK’s plan for Brexit is entirely reliant on this man deciding to offer the UK an ambitious, thorough and fair deal. This may prove to be a level of optimism roughly equivalent to asking a car thief to sort out your valet parking.
President Trump is far from being the only problem for the UK in negotiating a trade deal with the USA, though: the UK faces getting crushed between the USA’s and the EU’s red lines on trading.
Representatives of the US State Department have told MPs that the US has no interest in forming a trade deal with the UK that would not allow the import of US agricultural products into the UK.
Recent news stories have revealed this would not just mean opening up the UK to hormone-fed beef and chlorine-washed chicken, but also allowing US milk products into the UK – which can have twice the number of white blood cells per pint (sometimes colloquially referred to as ‘pus’) than EU standards allow. US lobbyists are even calling on the UK to reconsider EU protections on different products, which protect Scotch Whisky, Cornish pasties, parmesan and thousands more products.
Such a trade deal would reshape the food we eat daily, and threaten UK producers who would either need to lobby to lower UK agriculture standards to US levels in order to compete, or else face going out of business. It could also threaten UK animal welfare standards, which Michael Gove has pledged to preserve and strengthen post-Brexit. And that’s before the consumer backlash: how many of the 17 million people who voted for Leave did so to be able to drink more milk from infected cows?
These problems are huge, but they pale into insignificance when compared to the political fallout allowing US foodstuffs into the UK would cause in Ireland. The EU enforces its food and agricultural standards vigorously, and would not allow a situation in which US products could easily enter EU nations. That would mean any land borders – such as the one between Northern Ireland and the Republic of Ireland – would need to be a hard one.
This creates an intractable problem. The UK has now been told there can be no trade deal with the US that doesn’t include agriculture. The UK has also been told it cannot drop its agricultural standards – or allow US products into the country – without creating a hard border in Northern Ireland. The UK and EU have agreed a hard border in Ireland is unacceptable, and the DUP – upon who May relies to keep her job – will not allow it to have a special status separate from the mainland.
May stated a few obvious truths about Brexit in a speech at the start of this month, and received a rapturous response from the UK media for it. She will have to face a bigger one soon: there is no US trade deal that can be done without causing the likely collapse of her government and a huge EU crisis. Who’s left to trade with?