Boris Johnson, 2017: “We hear that we’re first in line to do a great trade deal with the US.” Liz Truss, 2019: “My main priority now will be agreeing a free trade deal with the US.” Dominic Raab, a cabinet eminence at around the same time: “President Trump has made clear again that he wants an ambitious trade agreement with the UK.”
Then Rishi Sunak on the same subject last summer. “For a while now, that has not been a priority for either the US or UK.” Oh.
This government’s single greatest disservice to the UK has been to misunderstand the US. Brexit was, from the start, a huge bet on the economic openness of the United States. A bilateral trade deal with Washington was meant to offset the loss of unfettered access to the EU market. That no such deal emerged was bad enough (though as predictable as sunrise). But then Donald Trump and later Joe Biden embraced a wider protectionism. World trade is fragmenting as a result. So for Britain, double jeopardy: no agreement with the US, but also less and less prospect of agreements with third countries.
As the US is neutering the World Trade Organization, blocking appointments to its appellate bench, Britain can’t even count on multilateralism to keep the liberal flame from snuffing out. In essence, the nation staked its future on trade at the exact historical moment that it fell out of favour as an idea. It is the geostrategic equivalent of investing one’s life savings in a DVD manufacturer circa 2009.
Now, leave aside the question of whether the US is right to turn against trade. The turn is happening, and Tories should have anticipated it. Anyone with a passing knowledge of Washington could have warned them not to confuse the place for a free-market bastion.
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In 1992, the trade sceptic Ross Perot won 19 per cent of the national vote as an independent presidential candidate. “Fast track”, the law that allows the president a free-ish hand to do trade deals, lapsed more than once in the decades either side of the millennium, such was the cross-partisan mistrust of it in Congress.
Look at the dates here. This was the high summer of “neoliberalism”. Imagine how much stronger the protectionist impulse was in normal times. Or rather than imagine, check the record. It shows the tariff walls of the 1800s. It shows the statism of Alexander Hamilton and Abraham Lincoln. Smoot-Hawley wasn’t an interwar aberration.
Britain had the Corn Laws, of course, and Imperial Preference. But protectionist sentiment is a force in American life to an extent that it can’t be in a mid-sized, resource-poor archipelago. It is then transformed into policy via sectoral lobby groups of a scale and sophistication that must be seen up close to be believed. (Prediction: in the contest with China, a lot of industries will turn out to be “strategic”.)
The job of a British government is to fathom these things before betting the nation’s entire future on a hunch that America will forever uphold world trade
All this is the US’s sovereign right. If I lived in a continental-scale market with superabundant resources, I’d need a lot of persuading from David Ricardo and The Economist that I am still better off trading. But that is the point. The Tories think the crucial fact about the US is that it is made up of Britain’s “cousins”. (It isn’t, unless we are consulting the census of 1810.) In fact, what matters are certain geographic and geologic realities, which render the US much less dependent on commercial exchange with the outside world.
After that, the next most important fact is its status. The US is defending a position as the world’s number one power. Chinese imports – of electric vehicles, say – poke at anxieties that aren’t half as raw in Britain.
[ Biden, Sunak highlight stronger economic ties but impact of Brexit lingersOpens in new window ]
One needn’t admire this about the US. One can suspect it of hysteria, in fact. But the job of a British government is to fathom these things before betting the nation’s entire future on a hunch that the US will forever uphold world trade.
This mistake came from “Atlanticist” Tories, remember – the ones who read Andrew Roberts and track the exact co-ordinates of the Churchill bust in the White House. (Barack Obama was hated for moving it.) Well, after giving it all that, these people failed on their own terms. They failed to understand US politics. Britain will foot the bill of their error for decades.
“Trade”: even the moral connotation of the word is distinct in each nation. It has had a high-minded ring to it in Britain ever since the abolition of the Corn Laws helped to feed the working poor. In the US, where the cotton-exporting Confederates were free-traders, history isn’t quite so clear-cut. It is almost as if these are different countries. – Copyright The Financial Times Limited 2024