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Possible trade agreement with Great Britain: Trump's Trojan Horse

2019-09-07T08:52:26.181Z

British PM Boris Johnson needs a fast trade deal with the US at a Brexit. But US President Donald Trump and his advisers will have a deal paid dearly.




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It looked like a friendly chat, but actually it was a showdown behind it. When US Vice President Mike Pence entered Downing Street on Thursday 10, he addressed the hosts Boris Johnson with the warmest greetings from "their friend" Donald Trump. His government, Pence assured, not only fully supports the British Prime Minister's Brexit plans. He was also prepared to start negotiations on a bilateral free trade agreement immediately. Apparently incidentally, the American then mentioned that his country is the largest economy in the world - a clear indication of who should be the cook in this matter and who the waiter.

Read the SPIEGEL cover story here, how Boris Johnson is gambling the future of the British.

But instead of being intimidated, Johnson unleashed a cascade of preconditions. The opening up of the NHS healthcare system to the US pharmaceutical giant is out of the question, and chlorine broilers over there do not want the British on the table either. But for English lamb and the very Scottish specialty haggis on America's menu. Pence was clearly stunned. The preliminary round goes to the British.

At this level, however, it should not stay. Johnson would need a trade deal with the US much more urgently after his Brexit than vice versa. The Brexiteers have promised their followers that a truly global Britain, freed from the shackles of crippling EU regulation, will better exploit the opportunities of global markets. The trade relations to the huge sales market USA are the sample on the example.

"At the end of the snake"

For Washington, on the other hand, the former Empire enjoys at best rhetorical priority. The forces of the Lighthizer Brigade, the team of Trade Representative Robert Lighthizer, are tied to other fields: China, Japan, EU - his boss has put down pretty much all trade relations to zero. It's clear what Trump's predecessor Barack Obama wrote to the British in the Brexit book in 2016: they would be "at the end of the line". The big trading blocs - the EU - would have priority.

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Of course, Trump does not hinder this, to promise his friend Boris a rose garden. After all, in 2016 he himself became the "MR BREXIT!" and believes that after the departure of his favorite enemy Theresa May in their successor to have found a soul mate ("They call him the 'British Trump'."). At the first meeting with Johnson at the G7 summit in Biarritz, the US President raved about "a very large trade deal" designed to boost exchanges "three to four times, fivefold."

For Trump is still valid: "America first"

Goods and services worth about $ 260 billion were traded last year. But while the US is the most important trading partner for the British, the reverse is true: the island of the Eurosceptics only achieves fifth place in US statistics.

Nevertheless, there is a great deal of interest in a US free trade agreement with a post-Brexit UK. There are mutliple reasons for this:

  • More than 40,000 US companies do business in the UK market . In a few locations, American companies have invested more heavily. However, many corporations have established their European headquarters in London to serve the European domestic market. With the Brexit the Europapass should be gone.

  • It goes without saying that both countries pursue the Anglo-Saxon model of capitalism , which (theoretically) relies on openness, free market forces and the renunciation of excessive regulation. By contrast, many Americans consider the rest of Old Europe creepy socialist.

  • The most important argument for Washington, however, is political. The British are their most important foreign and security policy ally in Europe .

  • From Trump's point of view, a deal with the British could also be a sort of Trojan horse. If they open their market for agricultural products from the US or car imports more, he has leverage in the stalled talks with the EU .

However, the traditionally close relationship in practice does not mean that the US makes concessions. Even Tony Blair had to be criticized as a "poodle" and Trump's America-First-Agenda is still on it. There are many issues that could quickly end the bromance between the populists Donald and Boris.

In an 18-page document, Lighthizer spelled out negotiating goals that might spoil Johnson's mood. The US wants

  • a comprehensive market access for agricultural products . It is about tariffs, but also about so-called sanitary barriers. Keywords: chlorinated chicken and hormone meat,

  • for industrial products the abolition of import obstacles ,

  • the assurance that the British will not introduce digital taxes,

  • Restrictions on London's leeway , with "non-market economies" - meaning China - to make arrangements

  • that the British refrain from manipulating their currency - an intrusion into the independence of the Bank of England,

  • and that the British "discourage " politically motivated actions for boycott or sanctions against Israel in commercial partnerships.

In view of this list, it is not surprising that nothing has come out in the already two years running preliminary talks. Trump's security adviser John Bolton has therefore proposed a "modular" approach. One could first agree where the hurdles are not so great, such as in industry and cars. However, according to experts, this would be a violation of the rules of the World Trade Organization (WTO).

But the danger of this happening is low. Not only is US politics busy with campaigning, Trump would need the approval of Congress for an agreement. Nancy Pelosi, the spokeswoman for the House of Representatives, has declared that a deal would have "zero chances" if, at the same time, a new customs border between Ireland and Northern Ireland would jeopardize the peace process.

"Britain has no leverage, Britain is in despair," former US Treasury Secretary Larry Summers described the experiment. Even Premier Johnson knows what to expect. "I know you guys are tough negotiators," he told visitor Pence. He just laughed briefly.

Source: spiegel

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