Friday, 20 January 2017

The over-optimistic fantasy of a beneficial Trump Trade Deal for Britain


After discarding all of the over-optimistic and often downright contradictory rhetoric in Theresa May's woeful Brexit speech (almost all of it), she really didn't say very much that we didn't already know.

Aside from confirming that the long-awaited Tory negotiating strategy is actually going to be based on the quite extraordinary threat that "if you don't let us cherry-pick access to the Single Market for favoured corporations then we'll turn the UK into a bargain basement corporate tax haven, and then you'll be sorry" one of the other notable features of the speech was the bit where she pinned her hopes on Donald Trump giving the UK a free trade deal saying "President Elect Trump has said Britain is not 'at the back of the queue' for a trade deal with the United States, the world's biggest economy, but front of the line".

If TTIP was scary, how isn't a free trade deal between Trump and the Tories?

One of the first things to note about this is the way that a proposed Trump-Tory corporate power grab blatantly contradicts all the anti-TTIP rhetoric from the Leave camp during the referendum campaign.

Despite the numerous observations that TTIP was dead in the water already because the governments of Greece, Portugal and France would never ratify it, opportunistic Brexiters used fear of this corporate power grab in order to persuade people to quit the EU.


Now, suddenly Brexiters are celebrating the idea of TTIP 2.0, but not based on an agreement between Barack Obama's centre-right government and the diverse political structure of the EU, but between President Trump's billionaire cabinet and Theresa May's hard-right Tory government!

I always strongly opposed TTIP, and it's a good thing for the remaining 27 EU nations that this toxic corporate power grab is dead in the water, but as I said all along, Britain quitting the EU would likely mean the development of even more ferociously right-wing corporate power grabs, and Theresa May's speech has made it absolutely clear that a corporate takeover deal between the UK and the US is one of her big priorities for post-Brexit Britain.

Trump's speech

Just a few days after Theresa May's pitiful Brexit speech, Donald Trump made his inaugural speech as President of the United States. Here are a few extracts:
"From this day forward, it's going to be only America First, America First. Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families."
"Protection will lead to great prosperity and strength."
"We will follow two simple rules: Buy American and hire American."
Theresa May is pinning her hopes on a free-trade agreement with the United States, but the new President is talking boldly about protectionism, putting America First, rigging trade agreements to benefit America and refusing to buy or hire British.

Donald Trump's bold protectionist rhetoric makes Theresa May look blindly and pathetically optimistic if she thinks she's going to get a trade deal with Trump's America that will benefit anyone but the Americans.

A position of weakness


By resorting to childish threats before the negotiations have even begun Theresa May has put the UK into a position of weakness. If the EU do as expected and rebuff the Tory efforts to cherry-pick access to the Single Market for favoured sectors of the economy (banking and vehicle manufacturing were mentioned by name), then she'll be left to decide whether to follow through on her threat to turn the UK into a bargain basement corporate tax haven in retaliation.

If Theresa May gets "no deal" from the EU, then the UK will clearly be in a position of extreme geopolitical weakness, and the countries lining up to form trade agreements with us will factor that into their negotiations. They'll be in the position to say "you need us more than we need you, so what are you going to give us?".

The idea that Donald Trump wouldn't use Britain's geopolitical weakness as a huge advantage in the UK-US trade negotiations is absolute fantasy. He's not going to give the UK a cushy deal just because he's got Scottish ancestry, or because he'd like to grab Theresa May by the pussy, he's going to use Britain's weakness and isolation like a diplomatic half-nelson to extract the best deal possible for America.

Tax Haven Britain

Another consideration that arises from Theresa May's threat to turn the UK into the biggest corporate tax haven in the world is how compatible this would be with Donald Trump's "America First" rhetoric.

Is Donald Trump going to sit idly by while Britain lowers its corporation tax rates to near zero in an attempt to get major multinational firms to abandon Europe and the US to relocate in Britain?

If Trump sees tax haven Britain as a threat to his "America First" rhetoric, how is that going to influence his decision making? Would he introduce protectionist measures to counter the threat of tax haven Britain, or would he join us in a "race to the bottom" drive to eliminate taxes on corporations and the super rich, creating an anglo-American corporate dystopia?

Whatever Trump's reaction to tax haven Britain, it's hardly likely to be good for ordinary British people.

Conclusion

The idea that a rushed trade agreement between the Tories and Donald Trump administration is going to be some kind of saving grace for Britain is frankly delusional. Even at the best of times such a hastily cobbled-together deal between two hard-right governments would hardly be beneficial for ordinary people, but with Britain going into any negotiations in a position of extreme geopolitical weakness, it's likely to end up being a very one-sided deal with very many more benefits for America and American corporations than benefits for Britain.

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