I haven’t posted much about Brexit on this blog. Partly this
is because other people are more than happy to do so I’d just be repeating what
someone else has said. But it’s also because I’m convinced that in future
years, in the aftermath of a future economic crash, the level of attention
devoted to something that really doesn’t change the economic fundamentals much
will seem bizarre.
However, I think the leaked US-UK free trade negotiations
are very interesting and do merit comment because they indicate that the form
of Brexit matters. Johnson’s regulatory disalignment with the EU and
liberalisation-based free trade agreements represents a definite fork in the
road compared with continue customs unions membership and single market
alignment (the Labour party plan) or remaining.
To recap, the leaked documents reveal that US negotiators
are pushing for “total
market access” to be “the baseline assumption” of the talks. This primarily
means services because services are the dominant part of the British economy.
And this definition includes the NHS because the NHS is considered a service.
British officials have promised to “fly the good for flag
for services liberalisation”. The NHS could only be excluded if, as is the
custom with trade negotiations, it is specifically exempted. And the British
side has declined to exempt the NHS, just as David Cameron refused to do in the
doomed
TTIP negotiations between the European Union and the US a few years ago. That
is extremely revealing.
Other
elements of the nascent US-UK negotiations include introducing lower food
standards (chlorine-washed chickens), banning any mention of climate change and
establishing the right of corporations to sue the British government, without
any right of appeal, for practices they regard as unfair.
The EU and total market access
But before we rush to put our bodies on the line for the
status quo, it’s necessary to recall what is already happening in the absence
of a newly-minted trade agreement with the USA. Because it’s eerily similar.
The afore-mentioned TTIP free trade agreement (FTA) between the EU and the US
was considered to pose “real
and serious risks to the NHS”. There were genuine worries it could also
have undermined food safety, bank regulations and environmental standards. It
was negotiated in secret (you had to go into a secure reading room to examine
it) and it would have established exactly the same ‘corporate court’ system as
the US-UK negotiations. In fact, as a result of EU FTAs with many different
countries, and also within the EU, so-called investor-state
dispute tribunals are extremely common.
In Britain, the NHS
is already being privatised with mental
health services on the frontline. Moreover, under EU laws on fair
competition, companies such as Richard Branson’s Virgin are able to sue
the NHS on the grounds of putatively poorly-run tendering processes.
However, I think there is a difference between EU free trade
and a future in the US orbit. That relates to public opinion. The TTIP, which
was negotiated between 2013 and 2016, is dead in the water – in April 2019, the
European Commission declared that TTIP was “obsolete
and no longer relevant”. Partly that outcome is a result of mushrooming
governmental and public opposition to TTIP provisions as they were gradually
exposed. Doubtless the European Commission would have liked to proceed, without
opposition and scrutiny. But it couldn’t. The same European public opinion will
influence what a future Labour government can and cannot do and what is
politically possible.
The same could theoretically be said of the British
government. But if Johnson wins a majority on December 12 he will take that as
permission to blithely ignore public opinion for five years, by which time a
US-UK FTA could be negotiated and sealed.
Not all people’s
votes are the same
There is also a question here about how Brexit is negotiated
which has been overlooked. The leaked negotiations revealed that a no deal
Brexit (still on the cards if the UK doesn’t reach an agreement on future trade
arrangements with the EU by December next year) is the US’s preferred option.
Conversely if the UK is still in the Customs Union and aligned to the single
market – which is Labour party policy – a US-UK FTA is seen as a “non-starter”.
So if Labour wins the election and negotiates a deal in
which Customs Union membership is maintained and organises a referendum with
that deal going up against Remain – as is its stated policy – that will
specifically rule out any future US-UK trade negotiations which lead to the
privatisation of parts of the NHS or dilution of food standards. Regardless of
which side wins, it won’t happen.
However, if there is a 2nd referendum between
Johnson’s deal and Remain, a future US free trade agreement – with all that
that entails – is eminently conceivable. Indeed, such a scenario – propping up
a minority Conservative government to allow a ‘people’s vote’ –
was put forward by Lib Dem deputy leader, Ed Davey, now that Lib Dem ‘Plan
A’ – revoking Article 50 – has been conceded to be pie in the sky.
Ironically, a putatively principled opposition to Brexit
could result in the worst kind of Brexit happening.
