If we crash out of the Single Market, as Theresa May intends to do if the EU don’t give in to her negotiating demands, we will need to expand our trading links with the rest of the world massively to balance the trade we are going to lose.
We probably are going to crash out of the Single Market. The EU have been very clear all along that they cannot agree to our demands so, two years after we trigger Article 50, we’ll be out without a deal.
If we want to avoid being damaged financially by Brexit, we’ll need something to offset the estimated £75 billion a year that leaving the Single Market is expected to cost us. We need to be earning elsewhere. The deals we make will need to be net earners – to bring in more money than goes out. This will be an uphill battle, since we’re struggling to meet even our current export targets, let alone massively expand.
At this point, our attention will turn to the US, our next largest partner after the EU. We will urgently need to make a free trade deal with the US as a key part of our post-Brexit trade, one that brings in money. And this is where the wheels immediately fall off the Brexit plan.
The new US President, Donald Trump, has made very clear what his views are on international trade. He’s not interested in free trade – he’s a protectionist. He’s for putting up the cost of imports to protect American jobs. His plans for all new trade deals effectively mean that they must be net earners for the US, exactly the opposite of what the UK would be looking for, and he intends to tear up existing trade arrangements to get what he wants.
There is worse. Far worse.
Trade treaties these days contain far more than just an agreement about import charges. The most important parts nowadays are in agreements over shared standards, for example on product safety, on dispute resolution, and on opening up previously protected parts of a nation’s economy to companies from outside.
Donald Trump is embarking on a bonfire of safety, environmental and marketing regulations. When we come to negotiate a trade deal with the US, the expectation from their side is that we will accept their lower standards on goods they sell us.
There’s a relatively simple example – whisky:
which gives me an excuse to show you a clip of the sublime Otis Lee Crenshaw (caution: sweary).
This example is serious enough for Scottish distillers. But there are cases with much more direct and dangerous consequences.
Trump intends to slash 80% of the regulation on medicines. Think about this for a moment. A read of Ben Goldacre’s Bad Pharma should be enough to convince you that the problems facing the pharmaceutical industry are not that their hands are tied too tightly. And yet we may be faced with no alternative but to accept lowered safety on imports, as a condition for a deal we will be desperate to make.
That same desperation is likely to lead us to offer up the NHS as a lucrative sweetener for a US deal.
It’s already clear that our government is holding back on criticising Donald Trump’s presidency for fear of the effect it may have on any trade deal we make. Donald Trump says he may negotiate this deal personally, when it happens, and he is well-known for holding petty grudges, so there are solid grounds for being concerned that if we upset him now, he’ll retaliate at the negotiating table.
Trump is also well-known for being exploitative in his dealings. Witness the cavalcade of small businesses left ruined in his wake, when he failed to keep his end of deals he made with them. His business approach is to throw his weight around, and if the people he deals with are not big enough to stand up to him, that’s tough luck. Which of us is going to be the more powerful partner in any US-UK trade deal, the US or the UK? Meanwhile, Trump’s advisers see Brexit as a golden opportunity to steal trade from the UK, not to promote it.
It gets even worse. The Trump administration has already, in its first ten days, shown itself to have a lack of respect for truth, decency and the rule of law worthy of a tin-pot dictatorship. Our Government’s reluctance to criticise Trump’s excesses – to protect a trade deal we only need to seek because of Brexit – while the rest of the free world lines up to condemn him, puts us on the wrong side of history. There are only a few ways this can play out.
Either Trump’s presidency swiftly collapses in the stink of its own corruption. In this event, the UK is going to have sullied its international reputation for no good reason – we’ve got nothing out of Trump for our betrayal of basic human decency.
Or if Trump lasts a bit longer, and we tie ourselves to him with a trade deal on which we are dependent, we get to follow his administration into the swamp. How far are we prepared to follow him? Quite likely, if we won’t condemn him for all the things he’s done so far, he’s going to have to go a lot further before we decide we can no longer hold our noses and put up with it. The longer we go on, the worse the damage to our international standing, the bigger the harm to us. The US is already close to being a pariah. Do we want to join them on the naughty step?
It should be obvious to anyone that making ourselves an outcast among the international community, threatening financial reprisals for anyone who doesn’t give us what we want, and insulting our long-time friends and neighbours, are not what we should be doing right at the time when we are looking to negotiate new deals.
This is all morally questionable, and financially it is clear that striving to secure a deal with the US may harm our exit deal with the EU.
The UK still has a few friends, but their patience will only go so far.
Artwork by Alexis Taylor