I don't comment on US affairs generally unless they affect the UK. The decision by Trump to pull out of the trans-Pacific Partnership qualifies. Without a major superpower, TPP becomes more akin with a Pacific Efta. I don't think it will die because too much has been invested and the benefits are fairly obvious for the willing remaining parties. What that means though is that any Brexiteer fantasy of a CANZUK alliance is stone dead. TPP has its own customs protocols and though it will share a similar regulatory base it will likely be incompatible with our own. Moreover, trade imbalances exist with these countries for good reason. We do not necessarily want to be open to NZ competition on lamb.
But what does this mean globally? Effectively Trump has written the USA out of the script and turned inward. It will no longer pursue multilateral solutions and will focus entirely on bilateral deals. This is viewed as a major step backwards by the media but as I understand it, it's not much of a deviation from the norm. The US has always had a keenly patriotic and strategic trade policy and thanks to its size and diversity it can pick and choose. Multilateral efforts have tended to ignore the USA as a lost cause. African states are looking elsewhere and the failure of TTIP shows that the US is not amenable to trade liberalisation. America is protectionist because it can afford to be.
That is why the UK must resist calls from the right for unilateral free trade because that's effectively a free licence for US dumping of surpluses - and the UK, being run by gullible atlanticists will not bring any complaint to the WTO unless pressured by European corporates, most of which will soon be divesting gradually from the UK. We should be most cautious of a deal with the US for its own sake.
I take the view that we should take the Trump administration as a half time intermission. America has gone on pause for a term while it sorts itself out. America can afford to be ignored for a while and we cannot waste our time pressing for a comprehensive deal that isn't going to happen. We must seek our fortunes elsewhere.
Our trade strategy must be geared toward our most pressing strategic concern which is to slow the flow of migrants from Africa lest we see all of Europe destabilised - which is not in our interests. We need to give Africans a reason to stay where they are and that means investing and stimulating trade. We cannot afford to do this alone so we must still work closely with Europe and other interested parties because what needs to be done requires that we do it together. We don't have the money to do it any other way. If we want to benefit from trade then we have to invest first to bring infrastructure up to scratch.
Free trader fantasies about a glorious English speaking union may sound superficially appealing but in the real world they simply won't fly. We can have preferential customs, visa and tariff arrangements and nobody is going to complain about that but the geography and legacy commitments make any kind of comprehensive union implausible - even if it were based on the Efta model.
The short of it is, Brexit or no, we are still better looking across the Channel than the Atlantic. For the time being, we cannot count on the USA for anything - especially when Trump is taking Europe advice from one N Farage. All we can do is enjoy the entertainment and hope our septic friends emerge from their darkest hour having had a rethink. Sooner rather than later is preferable.
No comments:
Post a Comment