World View: Brexit is Trump’s battering ram against EU regulatory power

Ireland may be caught in the middle of a trade war between US and Europe

US president Donald Trump: The same tactics used against Iran force European companies and states to become agents of US policy. Photograph: Jonathan Ernst

US president Donald Trump: The same tactics used against Iran force European companies and states to become agents of US policy. Photograph: Jonathan Ernst

 

Donald Trump and Brexit put world trade into the foreground of international politics. Extremely complex and usually obscure regulatory issues thereby become highly salient and contested.

Ireland has a key role in this new game.

Trump’s policy consistency over 30 years in favouring transactional, mercantilist trade deals and opposing trade deficits and debts is often underestimated. Now that he has consolidated his position in the White House and surrounded himself with compliant policy hawks on trade and foreign policy, he is pursuing such objectives more ruthlessly.

That point stands despite his disruptive style, willingness to change tack and electoral opportunism.

Pursuing geopolitical objectives by trade disputes puts the European Union into Trump’s firing line

Trump’s policy of America First is pursued against alliances and multilateral commitments in place since the end of the second World War, as we are reminded by the D Day anniversaries. Beyond those, China is the central target as an emerging competitor for great power status which must be contained or reversed.

Secondary sanctions will be used ruthlessly against states and companies using its Huawei 5G technology, on grounds of security cutting right across established World Trade Organisation rules. The same tactics used against Iran force European companies and states to become agents of US policy, exposing the lack of alternatives to the dollar in conducting most world trade, despite the euro.

Pursuing geopolitical objectives by trade disputes puts the European Union into Trump’s firing line too. Its international competences are strongest on trade and regulatory issues, where it sets world standards the US must adhere to on data protection, corruption, human rights, the environment and labour.

BREXIT: The Facts

Read them here

Chaos and disruption

Deregulation is another consistent feature of the Trump agenda. Behind the chaos, disruption and self-preoccupation of his first period in the White House, there lies a huge effort to roll back a generation of US standards restricting corporate growth and profitability.

It puts industrialists in charge of federal agencies and has gone furthest in agriculture, energy, labour and environmentalist deregulation.

Because US capital is now so globalised – particularly in the EU, UK and China – the domestic limits to the deregulation drive become rapidly apparent, so it must be pursued internationally.

US policy 'seems closer to an abusive relationship with a vulnerable country than a genuine partnership'

In this strategy Brexit is a real opportunity. A radical break between the UK and the EU in a hard or no-deal Brexit makes rapid conclusion of a compensatory trade deal with the US attractive to such Brexiteers. Trump’s explicit support for Boris Johnson and Nigel Farage and his persistent tweets advising a no-deal play into their agenda, as he advises the UK to “throw off the EU shackles”.

Usually unspoken and often obscure issues dealt with in trade deals leap to the fore as a result. Senior Trump cabinet members and US policy guidelines insist that access for previously excluded US agricultural goods would be central to such a deal.

So would recently deregulated US goods, with lower standards on things like acid rain, pesticides, hormones. Access is demanded to the National Health Service for US pharmaceutical products.

Bullying tone

The bullying tone of this lobbying just when the UK is most exposed reminds commentators of the abiding ruthless streak in US policy towards a previous world power. Brexit is a battering ram against the EU’s regulatory power, looking forward to US retaliatory trade disputes with Brussels on steel, cars and agriculture.

British trade experts like Sam Lowe and David Henig show that because the UK trades nearly three times more with the EU than the US any deal cannot compensate. Henig says US policy “seems closer to an abusive relationship with a vulnerable country than a genuine partnership”.

A no-deal Brexit followed by such a US trade deal would be a direct threat to EU standards from smuggling across a porous land border between the UK and the EU in Ireland. It would have to be controlled. This developing aspect of the backstop guarantee to keep the Border open built into the UK withdrawal agreement makes the current Brexit crisis even more intractable.

Ireland is now a “multiple interface periphery” between these three cores, the political sociologist Joe Ruane argues, referring to territories located historically in the zones of overlap between different political and cultural regions that looked outwards to each.

That highlights Ireland’s position as an open trader sandwiched between these three economic powers now in contention over the politics of trade. It requires skill, capacity and autonomy to defend interests, negotiate opportunities and resist policy capture.

Ireland is strengthened by European solidarity yet is vulnerable to future EU, UK and US pressure.

pegillespie@gmail.com

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