Keir Starmer is tip-toeing cautiously towards better trade relations with the European Union (EU), but he still clings to the notion that our world trade position can be based on one-to -one trade deals with other countries. However, Brexit has left us in a weaker, not stronger position in trade negotiations This delusion is based on the notion that we can return to some Golden Age where Britain was a world trade power, and we can trade our way to economic growth by bilateral trade deals with all and sundry; and particularly by taking advantage of our “special relationship” with the world’s greatest economic power, the USA.
It is the same desperate delusion, which led PM Theresa May to a toe-curling hand-holding with Trump at the White House, and to Starmer’s equally embarrassing hand- delivered invitation from the King for an unprecedented second State visit for the increasingly unpredictable Trump.
Trade consensus existed in its present form since 1945
Trump’s attitude to international trade is diametircially opposed to the consensus that has existed since 1945, one supported by every previous postwar US President.
Briefly, after 1945 there was an overwhemingly conviction that countries retreaiting into protetctive tariffs (in effect taxes on imports) after WWI had been a disaster, leading to mass unemployment and eventually to WWII. The advanced western states agreed that lowering tariffs would encourage trade and lead to econmic growth. But unregulated Free Trade would lead to domination by the largest economic powers, especially the USA.
In trade negotiations, size, and particularly the size of your “internal market” is the key. A major reason for the UK joining the then Common Market was to reverse our decline as a trading nation by joining a burgeoning open market in western Europe. A point eloquently made by none other than Margaret Thatcher at the opening of the Single market Campaign at Mansion House, April 1988:
Just think for a moment what a prospect that is. A single market without barriers – visible or invisible – giving you direct and unhindered access to the purchasing power of over 300 million of the world's wealthiest and most prosperous people.
Bigger than Japan. Bigger than the United States. On your doorstep. And with the Channel Tunnel to give you direct access to it.
It's not a dream.It's not a vision. It's not some bureaucrat's plan. It's for real. And it's only five years away.
An agreed framework for international trade was only established as late as 1995, with the setting up of the World Trade Organisation (WTO). Not only would the WTO set rules and regulations, but also it also established a binding arbitration procedure for solving trade disputes. Before that, the free trade movement had proceeded by a series of “rounds” of tariff reductions.
The UK had influence, but we lost that with Brexit
My experience as Vice-President of the Euro-Parliament’s Trade Committee, was that the UK exercised far more influence on EU trade than was admitted in the British media.
One simple example of our loss of power post Brexit has been the bilateral agreements made with Australia and New Zealand, both much lamented by the National Farmers Union (NFU). Whereas on the other hand the admirable Kiwi PM, Jacinda Arden, expressed surprise at how much the UK conceded.
Brexitland’s weakness has continued under Starmer, though Trump’s fury over Britain’s lack of support for his illegal attack on Iran must be a further nail in the coffin of the “special relationship”, which even the most myopic cannot fail to see.
It was the EU which saved us from chlorinated chicken, but now Trump is demanding open access for US oligarchs in high-tech, access which the EU restricts under its anti-monopoly regulations. But like the Tories before him, Strarmer is desperate to claim trade deal successes.
One of the firm components of the EU trade deals remains the inclusion of social, human rights and environmental “conditionality” in trade deals.
The Gulf States have already declared they will accept no “human rights” clauses in any bilateral deal with the UK.
Exports must be based on International Labour Organisation (ILO) core standards to protect workers’ conditions and rights.
Fair Trade and workers protections
Let me say a few words about “Fair Trade”. I applaud the increase in consumer awareness brought about by Fair Trade labelling and the spread of Fair Trade Towns. Some of the world’s poorest people are agricultural workers.
Coffee is a clear example, Europe is the biggest consumer, yet grows no beans, the profit in coffee as in other food is in the ‘value added’ – the processing, roasting, packaging, retailing. We need fairness down the whole chain from grower to barista on zero-hours contracts. Also we need more professional monitoring and enforcement of standards rather than the occasional “tick-box” inspection.
A final point. We urgently need to democratise trade policy making and scrutinising of trade agreements in our own country. Westminster has no structure for such. Whereas the Euro-Parliament had the power to follow the negotiations and finally to ratify all trade agreements.
This article is based on a talk given by Michael ” Free Trade, Fair Trade, Tariffs and Trump” . He is available to give the talk to other audiences. Please contact: mhindley1947@gmail.com.
Read the oriiginal article in Substack.
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