Leaked US Trade Talks Show How Trump Is Dictating Johnson’s Approach to a Hard Brexit

Yves here. Not to be a stickler, but the article mentions how the US pressed the UK to have an even more distant relationship with the EU than Switzerland, as if Switzerland were a model. Switzerland got where it is by virtue of on the order of 150 bilateral deals. The EU has more or less said it’s not doing things that way again and is tightening up its arrangements on some of the Swiss agreements.

More generally, it’s another element of Brexit Delusion Syndrome that meaningful numbers of people really seem to believe that the UK can make up for the significant hit it will take in EU exports by going the way of a distant relationship via trade with the US and others. Distance makes the UK a not terribly attractive global supply chain partner for anyone but the EU. And why would the US not use the UK’s desperation for a trade and services deal to eat the City’s lunch? UK financial firms may still do OK by virtue of moving staff and ops to other financial centers, but the UK itself is another matter.

By Nick Dearden, director of Global Justice Now. Originally published at openDemocracy

The cat is out of the bag: Boris Johnson is dancing to Donald Trump’s tune, regardless of the damage this might cause to Britain. His promises to maintain Britain’s ‘high standards’ after Brexit are not worth the paper they’re written on.

That’s the only conclusion that can be drawn from a set of leaked papers detailing trade talks between US and UK officials over the last 3 years. The minutes, redacted versions of which Jeremy Corbyn held up at last Tuesday’s leaders debate, were posted by an anonymous source on the discussion website, Reddit. They show how the US administration has already successfully bullied Britain into taking a harder Brexit position, which is good for Trump’s geopolitical games and US big business, but bad for Britain’s economy and British welfare.

The papers show US officials pushing Britain to an ever harder Brexit position, clear that they don’t want Britain to be a ‘satellite of the EU’ in the way Switzerland is. They even threaten that if the UK continued to push certain EU positions in international forums – something the UK is still bound to do – it could undermine negotiations on a US trade deal.

Papers from the time of Theresa May’s ‘Chequers plan’ are illuminating because the administration is clearly furious at May’s promise of long-term alignment with EU standards which would prevent the dilution of British food regulations which US agribusiness hopes to benefit from. US negotiators saw this as a “worst case scenario” and threatened to raise it with Trump ahead of his UK visit.

One of the most significant changes which Johnson made to May’s Brexit deal was a weakening of the alignment to EU standards, suggesting US bullying worked. But it’s particularly worrying that economic modelling seen by the trade officials showed this was likely to be good for the US, but much less so for “UK welfare and GDP gains.”

We already suspected that the US was pushing lower food standards in Britain post-Brexit. That’s because US food standards are far more favourable to big business than EU standards, and the only way to help US business increase its penetration into British markers is to undermine current regulation. US officials explicitly mention the infamous chlorine-washed chickens, promising to help the British government sell the concept to a sceptical British public. They attack attempts to reduce sugar in food, the protection of regional products (like Stilton cheese and Cornish pasties) and even nutritional labelling, which they say is more harmful than it is useful.

While US officials are eager to give US experts and multinational corporations better “participation” in standard-setting in Britain post Brexit, they are deeply critical of Parliament sticking its nose into such issues. They call the European Parliament’s decision to temporarily ban the Monsanto-owned chemical glyphosate “unhelpful”.

Although the trade deal could exacerbate the drivers of climate change, US officials report they’re “banned” from mentioning greenhouse gas emissions reductions. In fact, the US seems interested in introducing a ‘corporate court system’ in a US-UK deal, formally known as ‘investor state dispute settlement’ or ISDS, a mechanism regularly used in other trade deals to make government action on climate change more difficult. ISDS would allow thousands of US multinationals access to secretive tribunals, for the first time, where they can sue the British government for treating them ‘unfairly’. Unfairness, in this context, could mean phasing out coal-fired power or banning fracking.

The papers show both sides are deeply interested in a so-called e-commerce chapter, which is aimed at creating new rules for the digital economy. The problem is that these rules would lock in the power of internet giants like Facebook, Google and Amazon, making it harder for governments to tax and regulate these corporations, and making Labour’s proposals for a public broadband service all but impossible.

Across all service sectors, the US wants sweeping liberalisation, based on a so-called ‘negative list’ – unless you specifically list it, assume it will be opened up to US corporate penetration. This could mean parts of the NHS being further opened up (the US expresses an interest in nursing) and would make bringing formerly public services like mail or rail companies back into public ownership that much harder.

Moreover, US officials repeat Trump’s concerns that countries like Britain aren’t paying enough for our medicines, with a special concern about cutting edge biological medicines used in the treatment of many cancers. Introducing a US-style pricing regime would make such drugs unaffordable to the NHS. Incredibly, trade negotiators received special lobbying from pharmaceutical corporations as part of the trade talks.

Both the British and American sides agree that these talks should be secret – exempt from freedom of information rules – and it’s clear to see why. The papers reveal the British government being subject to bullying by the biggest country on earth. Far from taking back control, Britain has clearly entered into a relationship where we hold none of the cards.

They make a mockery of Boris Johnson’s manifesto pledge to protect British public services and standards – that would be absolutely impossible under the type of trade deal being discussed here. And they justify Labour’s focus on the US trade deal at this election. This deal is at the centre of the divergent views the two biggest parties have about what sort of country they want to build after 12 December. On the one side, we could have a government which tries to fight inequality and climate change by constraining corporate power through tax, regulation and decent public services. On the other, one that will ignore the interests of their own electorate to kowtow to the biggest corporations in the world.

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  1. John A

    Except the BBC is leading the way, closely followed by the press, in dismissing this as more Corbyn ‘lies’ and exaggerations. It’s remarkable how dishonest the mainstream media are in Britain.

    1. Eustache de Saint Pierre

      Lickspittles of the world rejoice – I think it has always been the case with the Orgreave footage being my first introduction, but especially since the GFC there appears to have been a steady acceleration. Stephanie Flanders now working at JPM was a good example of the BS response to the crisis from the BBC.

  2. skippy

    With the post in mind …

    “The Labour party in the UK has today committed to introducing unitary taxation by the end of the next parliamentary term. This is significant internationally because it marks the first such manifesto commitment from a major political party, with a realistic prospect of election success, in a major OECD member country. Coupled with the leadership of the G24 group of developing countries, the Labour commitment represents an important further normalisation of unitary taxation, and a potentially important step to ending the great damage done by corporate tax abuse internationally.

    But what is unitary taxation? We’ve put together an infographic below to illustrate how unitary tax works.

    Under a unitary tax approach, governments treat a multinational corporation as a group made up of all its local branches, instead of treating each local branch as an individual entity separated from the global chain. The profits that the multinational corporation declares as a group are then apportioned to each country where it operates based on how much of its real economic activity took place in that country.

    Simply, put a unitary approach requires multinational corporations to contribute tax based on where they employ workers and do business, not where they rent letter-boxes and hide ledgers. That means making sure corporations pay their fair share locally for the wealth created locally by people’s work.”


    Naw BJ would be better for … what – ????? – again …

  3. Seamus Padraig

    … the article mentions how the US pressed the UK to have an even more distant relationship with the EU than Switzerland, as if Switzerland were a model. Switzerland got where it is by virtue of on the order of 150 bilateral deals. The EU has more or less said it’s not doing things that way again and is tightening up its arrangements on some of the Swiss agreements.

    But Switzerland (like Norway) was supposed to be a model for the ‘soft Brexit’ deal that Jezza was going to negotiate after winning the election, wasn’t it? So if the EU has already ruled out such a possibility for Britain, then I guess the hardline Brexiteers were right all along: there’s no Brexit but a hard Brexit.

      1. Noel Nospamington

        The British have already generated a lot if bad blood in the rest of the EU.

        Rather than cancelling article 50 and still having Brexit/UKIP clowns sitting in the EU parliament for years causing headaches for the EU. Not to mention all of the other British obstructionists in EU committees and agencies .

        A soft Brexit deal which still allows Britian to remain in the single market may be the best for everyone. Plus it allows the British party in power to announce that they “got Brexit done” for whatever that is worth.

      2. Yves Smith Post author

        No, the Norway model is not available. We’ve discussed this repeatedly. Please don’t spread disinformation

        First, Norway is a member of the EFTA. The UK would have to join the EFTA. Norway, the largest member, has already said no.

        Second, the UK has allow EFTA some latitude because all four members are small. It’s not going to allow that even if the UK were to join.

        Third, Norway has about 100 bilateral agreements with the EU on top of EFTA. As we said with Switzerland, the EU has strongly signaled it’s not doing that any more.

        Fourth, as Richard North has shown (with photos!) Norway still has a hard border (custom check points) with its EU neighbor, Sweden.

        1. disillusionized

          The “Norway” option available would presumably be an eea solution but not an efta solution, probably looking like how they would like the swiss relationship to be like, but I would agree the ship has sailed – though a Corbyn win might engender enough goodwill, especially if it’s all good intentioned words in the political declaration but it will have to include fom, and what labours actual position is on that is (?) If I were an EU negotiator I would want to write the text in the second referendum for the leave option…

          1. Anonymous 2

            Thank you, disillusionized, for your intelligent comments which do chime with my intention when writing of a ‘Norway model’. I fear I was using short-hand, for which apologies to Yves

            It would probably have been better if I had referred to continued Single Market membership, which is what most people I talk to in the UK understand when one refers to Norway. I believe the EU would still offer this to a UK Government in some form if it judged the request came from a UK government it trusted. Of course the present one is not going to ask anyway.

  4. PlutoniumKun

    I wonder how they are addressing the issue that any trade deal has to get through Congress, and Pelosi has already said quite bluntly that won’t happen unless the border in Ireland issue is addressed to everyones satisfaction. I would guess that this is another incentive for the Tories to do quietly dump their former DUP allies from a great height.

    1. Landis

      Until the donors tell Pelosi they want the deal through and then she will order the congressional Dems to roll over.

      1. Noel Nospamington

        Don’t underestimate the power of the Irish lobby in the Democratic party, who will be justifiably upset if a hard border returns between Northern Ireland and the rest of Ireland.

    2. DaveH

      Hmm. I’d dispute “to everyone’s satisfaction”. I’d go with “to the satisfaction of Ireland (the country, not the island) and its diaspora”.

      The (justified) issues that Unionists have with the current withdrawal agreement aren’t high up on the list of things that are of concern to the Irish lobby in the USA. They won’t have any issue with Northern Ireland being economically cleaved from the rest of the UK.

      Then again, the Unionists should have seen it coming when they (DUP, UUP not so much) encouraged people to vote to leave the EU. Turkeys voting for Christmas.

    3. fajensen

      “Everyone” … I suspect that would cover only the corporations and ‘private individuals’ that paid for… argued for … because spouting money instead of words is Freedom of Expression and stuff … for Brexit?

      The Tories would sell off Northern Ireland tomorrow for 2 pieces of silver if they had the votes for it.

  5. shinola

    The Good Ol’ USA meddling in another country’s politics?!? Say it ain’t so! Must be fake news ’cause the GOUSA would never do that.

  6. DHG

    Neither Trump nor Johnson will be able to push through a Brexit that would cause the Anglo American world power to waiver in its power or function as its demise is set in stone. It WILL be fully functional when its cast into the lake of fire at the end of this system of things at the hands of Gods Kingdom. Man ruling man is about to come to an end for all eternity, it has been a complete and total failure and if allowed to continue we would all be extinct from greed, avarice and the like.

    1. Tony Wright

      Humans are doing a great job of destroying the planet, so far mostly at the expense of other species, with or without the Hand of God.

  7. RBHoughton

    America’s immense industrial agriculture is a by-product of the Great Depression. The moneymen were able to buy up parched land cheap, apply newly invented pumps to raise water for previously unreachable aquifers and turn the deserts of the mid-West into cornucopias of production. Since then science has improved the varieties of corn, soy, rice and wheat and USDAs handouts / insurance for raising these crops now goes to a handful of monster companies. This government subvention of very large corporations will overwhelm the British farmer with cheaper prices and make him willing to sell his land too. UK will lose control of its agricultural production.

    I will not mention the meat industry as the joys of ammonia-processed beef and chlorine-washed chicken have long been available in Macs and KFC in UK

  8. Jim A.

    No surprise really. One of the major reasons for the EU was to create a trading block big enough to negotiate with the US on something like equal terms. So that the idea that the UK by itself would be able to negotiate a more favourable deal was suspect on the face of it, despite the fact that in many ways they start out more closely aligned with US neoliberal thinking than the other major markets in the EU.

  9. Nils

    I don’t agree with this idea that the US wants Brexit at all. It’s typical for The Guardian and such fake left media. USA has always been pro-EU, this whole idea of Europe as one country. Only Americans could think of a name of the currency as stupid as the “Euro”. The EU and USA is closely tied together, why would US want to break up EU? Makes no sense at all. Haven’t the Remainets noticed that EU and USA agree about almost everything, like sanctions against Venezuela, the coup in Bolivia, comparing fascism and communism (as if EU and USA are not fascist). I agree with Nuland’s famous words. The sooner we get rid of this undemocratic, neoliberal, reactionary organization, the better. Normal working people all over Europe agree with me. Of course The Guardian and such media presentsit upside down. Read Wolfgang Streeck on the EU as well.

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