Monday 11 May 2020

Britain is treating the EU and the USA completely differently

There is an inexplicable gulf developing between the approach we are taking to trade with the USA and the EU.  Last week talks began with the Americans on a free trade deal. This was all done by teleconference with an official statement from Trade Secretary Liz Truss.  She was not coy about what she wants, all fluttering eyelashes and girly smiles for the US team.  Her statement read like a billet-doux from an ardent admirer and talked of our "shared values and principles".  What a crawler. It was all a bit embarrassing really.

 One of the ideals we share, she says without irony, is that "people should be free to buy and sell, sign contracts and choose their job without obstruction" - this as her government seeks to do just that with our largest overseas market on the basis of political dogma. She tweeted this:
Okay, it might not be to my taste, or yours, but it's an approach and perhaps there's nothing wrong with fawning over someone from whom you want something. Or is there?

We are trying to simultaneously conduct trade talks with our first and second largest overseas markets. Together, including trade with countries with whom the EU have trade deals, they represent 80-85 per cent of out external trade.  The EU being three quarters of it, just 22 miles away and by far the most important.

Yet our attitude to the EU is completely different. No opportunity is lost to insult or look casual to the point of total indifference.

The government's approach to the future EU relationship, as set out in a document published at the end of February says this:

"The UK is committed to working in a speedy and determined fashion to do so, with an appropriate number of negotiating rounds between now and the June high-level meeting foreseen in the Political Declaration. The Government would hope that, by that point, the broad outline of an agreement would be clear and be capable of being rapidly finalised by September. If that does not seem to be the case at the June meeting, the Government will need to decide whether the UK’s attention should move away from negotiations and focus solely on continuing domestic preparations to exit the transition period in an orderly fashion."

There is no such statement in the UK-US objectives set out in the official document explaining why an FTA is so important. No deadline, no threat to review it in a few weeks and walk away if there is no sign of an agreement. In fact just the opposite:

"A US deal presents a significant opportunity for the whole UK economy – potentially creating a substantial increase in trade with the US of approximately £15.3 billion in the long run, delivering a £1.8 billion boost to UK workers’ wages, as well as lowering prices on key consumer goods imported from the US."

The 'long run' is fifteen years during which our economy will grow to perhaps £3-4 trillion. The Treasury's forecast was that a US trade deal would add 0.2 percent to GDP after ten years, in other words, a rounding error.

Meanwhile loss of access to the EU single market, amounting to a reduction of 9.0 percent in our GDP by 2030 if we exit without a deal, is treated as if it didn't matter at all.

The two approaches cannot be reconciled can they?  Either trade is important or it isn't. It cannot be both.

I am sure both the EU and the US can see what we're doing, trying to play one off against the other. This is how you 'take back control' and learn to do the dance of the seven veils in order to attract the best suitor. It won't work.

We are just learning the ropes of international trade negotiations in a three way contest facing two of the world's toughest negotiators. It's like Selby FC facing Barcelona and Bayern Munich at the same time and will not end well.  As has been pointed out we have done no sectoral analysis and if nothing else trade negotiations are about vested interests - winners and losers. Whatever happens there will be both - but I rather suspect the winners will all be in Europe or North American and the losers over here.

David Frost, our chief negotiator tweeted that we have now submitted all the draft texts on Air transport, Air safety, Civil nuclear cooperation, Energy cooperation, Law enforcement, Unaccompanied asylum-seeking children, Readmissions, Social Security and a Fisheries Framework Agreement:

This is six months after the political declaration was agreed, two months after the EU published their draft text and six weeks before a decision needs to be made about extending the transition. Nobody in Britain outside senior civil servants and negotiators know what is in the UK legal texts and as far as I'm aware they have still not been seen by member states because we have refused to allow it.

This is not serious negotiating when we ourselves have set an extremely tight if not impossible timetable.

The EU are taking care not to be seen as the ones collapsing the talks but sooner or later, hard political decisions will need to be made by EU27 leaders and the EU parliament and I suspect some will have no hesitation in calling a halt to the talks and we will be in real trouble - with the EU and the USA.

America will never sign a trade deal with the UK without knowing out status vis-a-vis the single market and the entire British negotiating strategy will be exposed for what it is.
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