Global Politics Politics

Has the internal market bill already done the damage for Britain’s future trade deals?

Johnson’s government has made a radical statement of intentions as the UK gears up for the last series of trading negotiations for a deal with the EU before 15th October. A statement which has immense implications for Britain’s trading position with the rest of the world and the morality of its choices.

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Image Credit: Mohammed Hassan, PxHere

The Internal Market Bill:

The bill (announced 14th September) enforces compatible rules and regulations for trade in the four nations of England, Scotland, Wales, and Northern Ireland. These rules, formerly set by EU agreements, will now be controlled by the devolved administrations or Westminster. The bill runs contrary to the withdrawal agreement bill agreed with the EU, as the new powers spelt out for ministers in the controversial Clause 45 “have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent.”

The UK government is therefore willing to enforce the bill, allowing trade between Northern Ireland and The UK mainland under its new rules, even though it violates the Northern Ireland protocol which enforces the full EU customs code on goods crossing from Great Britain to Northern Ireland.

Although the bill passed in parliament by 77 votes, the fallout from such radical legislation has reverberated around the globe.

Across the pond:

The US reaction has been to reaffirm its commitment to the 1998 Good Friday Agreement. Democratic candidate for the presidency, Joe Biden, tweeted 17th September “Any trade deal between the US and UK must be contingent upon respect for the agreement and preventing the return of a hard border. Period.” The issue remains the land border between Northern Ireland and the Republic, and the “border” in the Irish Sea between Northern Ireland and Great Britain. Neither Britain nor the EU want a hard border, but both want Northern Ireland as part of their trading bloc.

Rumblings of discontent from the Democratic party may cause concern for Boris Johnson with the US presidential election less than 50 days away and Biden the favourite.

Tory reaction:

In response to Biden’s forthright comments, former Brexit secretary David Davis retorted, “Perhaps Mr Biden should talk to the EU since the only threat of an invisible border in Ireland would be if they insisted on levying tariffs.” However, this appears more of a ‘have your cake and eat it’ policy rather than anything that Brussels would realistically agree to.

Those on the right of the party are more nonchalant over the prospect of a UK-US trade deal being jeopardised, John Redwood has pointed out, “Trade deals are nice to have but not essential. We did not have a trade deal with the US when we were in the EU. Getting back full control of our laws, our money and our borders is essential”. They believe the gung-ho attitude of the UK may be worth it, even if a no-deal Brexit is the outcome.

EU reaction:

The Presidents of the EU Commission, Council and Parliament immediately called upon the UK to honour its commitments under the Withdrawal Agreement. The European Parliament announced that it would veto any subsequent agreement with the UK if the provisions of the bill remain.

The EU is undoubtedly Britain’s main trading partner, the two have around 40 free-trade agreements and none will survive Brexit automatically. The Economist wrote 12th February 2018 “Deal preservation lacks the glamour of deal creation but is a more urgent task.” This now seems more prescient than ever as Britain is teetering ever closer to the abyss of a no deal Brexit.

Trade Deals with the rest of the world:

After the EU, Britain’s top five export partners are Switzerland, Japan, Canada, Singapore, and South Korea. The depth of a trade deal Britain has with another nation is more important than the sheer number it strikes. Although the latter may be politically more impressive, deals existing with Canada and South Korea including services liberalisation, recognition of standards and intellectual – property rights, would be far worse to lose.

But as Britain becomes more desperate in the latter stages of the Brexit process, Marc Roche, Le Monde’s correspondent in London, worries Britain could become a “tax haven at Europe’s gates” and “China’s Trojan horse in Europe” as it uses concessions to catalyse trade deals with the US and China. Rem Korteweg of the Clingendael Institute warns against Britain having to acquiesce to China’s ambitions in the South China Sea to force a trade deal.

Where does this all leave Britain?

Britain’s trading future is finely in the balance on two fronts. One is delivering a Brexit deal on its own terms or leave with a dreaded no deal. The former risks undermining our legal and moral obligations whilst the latter may lead to dangerous concessions with the US or China.

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