Washington and Brussels put pressure on Brexit Britain

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Part of the economic thinking behind Brexit, in rightwing Anglosphere circles, is that it will liberate the UK from the supposed shackles of EU membership. Then a resurgent “global Britain” will be free to roam far and wide across the world’s commercial horizons, especially English-speaking ones.

For Prime Minister Boris Johnson and his Conservative government colleagues, the biggest prize is a trade deal with the US. This, they hope, will be more ambitious than anything likely to be negotiated between Washington and the future 27-nation EU.

In practice, the UK is discovering that even close allies can be very hard-nosed when it comes to trade. By unmooring itself from the EU, the world’s largest commercial bloc, London is making itself vulnerable to simultaneous pressure from Washington and Brussels — although Sajid Javid, UK chancellor, told an event at the World Economic Forum in Davos that Britain would prioritise a trade agreement with the EU over a deal with the US.

In the US case, three recent examples stand out.

In Davos this week, US Treasury secretary Steven Mnuchin gave a blunt warning that, if the UK pursued plans for a digital tax that would hit Amazon, Google and other US companies, London would face retaliatory trade tariffs.

It may turn out that the UK follows France’s example and finds a way of defusing the dispute with the US over digital taxes. But Mr Mnuchin’s words were more than a straw in the wind.

Richard Goldberg, who until early January served on President Donald Trump’s National Security Council, drew an explicit connection last week between Mr Johnson’s desire for a US-UK trade deal and British loyalty to Washington on big foreign policy issues.

Referring to the Iran nuclear deal, Mr Goldberg said: “The question for prime minister Johnson is: ‘As you are moving towards Brexit . . . what are you going to do post 31 January as you come to Washington to negotiate a free trade agreement with the United States?’”

Mr Goldberg added: “It’s absolutely in his interests and the people of Great Britain’s interests to join with President Trump, with the United States, to realign your foreign policy away from Brussels, and to join the maximum pressure campaign to keep all of us safe.”

The third example is the visit to London this month of a US delegation that carried the message that the British government should not jeopardise intelligence co-operation with Washington by permitting Huawei, the Chinese company, to play a part in setting up the UK’s 5G cellular networks.

As for Brussels, the Daily Telegraph’s Peter Foster reports today that the European Commission has warned EU governments that they should not let UK industry bodies certify that tradeable goods conform to EU standards.

If this hard line were to become official EU policy, it would create such severe frictions that London might end up with more modest trading arrangements with its nearest neighbours than the EU has agreed with Canada and Japan.

Under a second commission proposal, the UK could be fined or lose preferential access to EU markets if it were to violate the terms of any future trade deal with Brussels.

True, the commission does not yet have a mandate to speak for all EU governments in trade negotiations with the British.

However, the very fact that such ideas are up for discussion among EU policymakers is a strong sign that Brussels plans to stand its ground against the Johnson government’s determination to diverge from EU rules and standards.

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