Written by BRENDAN CHILTON
Brendan Chilton is Chief Executive of the Foundation for Independence and General Secretary of Labour Leave.
This week saw the UK trade negotiators begin discussions with their US counterparts on the first stages of an ambitious trade deal between the two countries. The negotiations are set to deepen what, for much of the twentieth century, has proven one of the more significant bilateral relationships in geopolitcs. But they also come in an hour of unprecedented challenge as tensions between the West and China are heightening. The course that the UK takes at this juncture will be important not just for our recovery from the global pandemic, but also in terms of the delivering the promises made in the 2016 EU referendum.
Even before COVID-19 spread across the continent the Eurozone was in trouble.
The negotiations with the US are taking place in parallel with the negotiations on the future relationship with the EU. The UK government knows it must deliver on new trading opportunities as promised in the referendum and also to assist in the recovery from the present crisis. This set of parallel negotiations presents the British with an unenviable juggling act. The two negotiations, while apparently separate, have serious implications on the other. Should the UK permit US food standards, for example, then it is likely tariffs will be imposed on UK imports to the EU. Similarly, if the UK abandons EU based standards tariffs could be levied on imports to the US. It is a careful balancing act where each nation or bloc gives and takes to secure their own national priorities. The notion that there is anything free in global free trade is for the birds. Free trade exists within nation states but not between them. That should constantly be on the mind of the British negotiators as the UK pushes ahead. We are back to Palmerstone diplomacy, ensuring that the British national interest trumps all other priorities.
The realities are of the EU’s negotiating position are also significant. Even before COVID-19 spread across the continent the Eurozone was in trouble. Wealthier northern member states with their greater fiscal controls led by Germany were in constant tension with those southern member states who enjoy a binge diet of high borrowing, high spending and less effective tax and regulatory structures. Applying a single currency with single rules to this unhealthy hotch-potch of national conditions was always going to be a struggle. National governments committed to the project are fearful of another rise in populist parties opposed to Brussels supranational agenda. The UK’s departure from the EU has only heightened those tensions as EU Finance Ministers grapple to plug the gap left in Commission spending plans and forecasts. But it has also relieved the UK of being tied to a block, which, for the foreseeable future, is going to have to tackle complex systemic failings the remedies to will inevitably be extremely expensive and painful to bear. Those constant crises in the Eurozone over the past decade and their likely continuation make the urgency for a resolution to those negotiations between the UK and the EU more paramount than ever. An extension to the transition should be avoided at all costs.
COVID-19 serves only to exacerbate the Eurozone’s problems. The Commission has faced huge pressure from dissatisfied member states to provide support to tanking economies during the crisis. As the EU’s economy shrinks, the profound disagreements on set about the EU’s recovery have yet to be fully exposed. The Germany’s constitutional court, for example, has criticised the European Central Bank (ECB) for the mass purchasing of bonds. However, southern states, Italy in particular, will not tolerate further austerity and increases in debt to pay for the recovery. In leaving the EU, the UK has ensured it is free to prosper. Just as the EU gazes inward toward its own protectionist priorities, so too does it struggle to maintain the solidarity and wellbeing of member states member and is ill equipped to take on a greater international role. As an independent state the UK can cast off those burdensome Brussels shackles and maneuver around international players and forge new alliances utilizing it’s standing in international forums and soft power. Our primary partner in forging that role should be the United States.
As China has grown the West has become dependent on cheap goods, resources and manpower of the Chinese nation. Coronavirus has, rightly, heightened suspicions about the Chinese governments trustworthiness. Its disregard for intellectual property rights, treatment of democracy protestors in Hong Kong, its imprisonment of the Uighur population, appalling human rights record, and the aggressive expansionist tone of the Communist regime should all send a signal to the Western free world that solidarity among free nations trading with one another is key to generating prosperity for nations afflicted by COVID-19. It is also a projection of Western values against an authoritarian regime that is seeking to alter the geopolitical balance of world power in favour of itself.
To serve its own trading interests, and the peace and security of the world, the UK must play a leading role in developing comprehensive trading relationships with other nations and be resolute in its determination to maintain the balance of power with its allies. The UK’s ability to cement trading relationships with the US, EU and nations in the Far East will be key to maintaining that balance. The UK’s capacity to restore old trading links with Commonwealth nations will be crucial to maintaining the influence of the free west, particularly in developing economies and halting the advance of Chinese power, particularly in Africa. Brexit will enable the UK to do just that — outside of the Customs Union. Using our trading influence and bilateral alliances we will be able to play a role on the international stage in favour of freedom and to counter against authoritarian states while generating wealth and prosperity for our people.