Category Archives: European Union

Britain, Economic, European Commission, European Union, Government, Politics

UK-EU trade deal: a logical step forward

BRITAIN

Intro: The agreement made with the European Union will have limited tangible gains, but at least the tone set by the prime minister is a positive one

MUCH is being made of Sir Keir Starmer’s deal with the EU, but many things still remain to be worked out. The agreement which was announced in London should be regarded as a staging post rather than a final destination. It was, in effect, a commitment to have more meetings at which negotiators will try to make more deals.

On the issue of visa for young people and the UK’s mooted return to the Erasmus university-exchange scheme, there is little clarity beyond the rebranding of “youth mobility” as “experience”. A decision on the level of fees that European students must pay has also been kicked into the long grass. So have some details of how the UK will work with the bloc on policing and security, including the use of controversial facial-recognition technology in tackling drug and people smuggling across borders.

Increased cooperation on defence is significant and timely, given the ramping up of geopolitical instability under Donald Trump – although British arms manufacturers will have to go on pushing for access to the EU’s £150bn fund. On food and fishing, terms have been decided. Fewer checks on exports, including meat, will benefit UK food producers, particularly the smaller ones that were worst affected by Brexit. For Europeans, mainly the French, the big win is a 12-year agreement on fishing in British waters.

The 41% of UK goods exported to the EU, worth £385bn, are more than is sent to the US and India combined – making this by far the most important trade deal so far. Though the UK remains outside the customs union, and regulations governing other goods including medicines have not been relaxed, the new measures mark a significant easing of trade.

By contrast, the new dispensation for UK travellers to join European passport queues, and looser rules about pets, are more about style than substance. But while conveniences like these will not bring the economic benefits that the PM seeks, they do send a signal. For ministers, any hint of an interest in rejoining the EU remains taboo. Instead, this modest scaling back of Tory-erected barriers is designed to show voters that Sir Keir is operating a rational and responsible government that puts the interests of British businesses and consumers first.

It should not have taken nine years since the referendum to reach this point. A group of around 60 Labour MPs is rightly pushing for the government to be more ambitious, emboldened by polling showing that most voters now think Brexit was a mistake. Free movement, however, remains a red line, and one inked in all the more vividly after the strong showing of Reform UK in recent local elections and national polls. This was also Starmer’s real chance to counter anti-immigration sentiment, not capitulating to it. He may yet come to rue his decision on this.

Among disappointing omissions is the lack of a mechanism to make touring by our creative artists, like musicians, easier. Nonetheless, the agreement is a much-needed step forward, even though the actual gains for the UK have been overstated.

Ursula von der Leyen, the European Commission president, was more accurate when she spoke of the deal as “framing” an improved future relationship. If Sir Keir wants to reverse the damage done to the country since Brexit, he will require to paint a picture of why an outward-looking, interconnected UK is more likely to succeed. Not one that has become an insular nation under Brexit.

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Britain, China, Economic, Europe, European Union, Government, Politics, Society, United States

UK-China relations: The Brexit dilemma

BRITAIN-CHINA

Intro: Trump’s trade wars have exasperated the Eurosceptic model, which is more outdated than ever

WHEN the transatlantic alliance was more functional than now, there was never a united view of China. Beijing has always been perceived as a commercial rival and potential security threat, and a common wariness has existed. For hawks in Washington, however, the idea of an alternative superpower closing in on economic and technological parity feels existential. More dovish Europeans have been openly compromising and readier to leaven caution with engagement.

Britain has veered between the two poles. In 2015, David Cameron promised a “golden era” of open trade with China. In 2020, under pressure from the US, Boris Johnson banned Huawei, a Chinese telecoms company, from UK 5G infrastructure.

In opposition, Conservative politicians have become increasingly hawkish against Beijing. Keir Starmer’s Labour government has tilted back towards cooperation. Several Labour ministers have visited China, including the chancellor. Other ministers, including the business secretary, will go there later this year, to revive a trade commission that has been dormant since 2018. Despite being manifestly frustrated with the Chinese owners of British Steel during the recent dash to keep Scunthorpe’s blast furnaces operating, the UK government has retreated from intimations of deliberate sabotage.

At some point, a reckoning has to be made. The pursuit of economic growth and investment will inevitably come into conflict with a national security interest in keeping China at arm’s length. The question is where to draw the line. The official line is that judgment is deferred pending a Whitehall “audit” of relations with Beijing. That is due in June.

A UK government decision is also imminent on China’s status under the foreign influence registration scheme – a system for keeping tabs on international organisations and companies exercising political influence in Britain. China is not expected to be named in the “enhanced tier” of risky states, alongside Russia and Iran, but some Chinese institutions might have that designation.

Calibrating these judgments – choosing when to prioritise security over commerce – is much harder with Donald Trump in the White House. What used to be a difference of emphasis between the US and Europe looks like an irreparable fracture in the west.

Trump has started a ferocious trade war with Beijing without a convincing strategic rationale. His officials have told Europeans they will have to choose a side when it comes to vital communications technology. Yet, what we see is a US president who has become routinely aggressive in his rhetoric towards the EU, dismissive of NATO, and reliably emollient towards Putin’s Russia.

From that pattern it is clear in Brussels and other continental capitals that Washington is no longer a reliable ally and the trajectory must be “strategic autonomy” for Europe. That is changing the calculus of risk and potential benefit from a more pragmatic China policy. The authoritarian character of Xi Jinping’s regime hasn’t changed, but it presents itself as a more predictable force in international affairs while US democracy declines in harsh and sporadic spasms.

Such changes illuminate a crisis of international orientation for Britain that has been building since Brexit. Economic detachment from Europe was promised on a model of the UK as a lone sovereign agent in an open, free-trading globalised world. That concept has aged very poorly, and it stands more of an outdated concept now than it ever has. Britain is not alone in struggling to navigate relations with China in the turbulent new geopolitical climate, but choosing loneliness and isolation in a world of rival continental blocks is making the struggle much harder.

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Britain, Economic, European Union, Government, Politics, Society, United States

EU reset: No time for UK passiveness

EUROPEAN REALIGNMENT

FANATICS of Britain’s departure from the European Union have struggled to quantify the Brexit dividend and what benefits it brought, but when Donald Trump unveiled his schedule of global tariffs they finally had a number to point towards. It was the difference between the 20% levy imposed on all continental exports and the 10% baseline figure payable on British goods.

A week later the gap closed leaving Brexiteers melancholic and dejected when Mr Trump reversed his plans. What the tariff schedules will look like at the end of the 90-day “pause” is no more predictable than any other feature of current US policy. There is no obvious concession from the UK government that might induce Washington to lower its 25% barrier against car exports, and the 10% rate on everything else looks non-negotiable.

Meanwhile, dialogue with the EU about closer cooperation continue apace. The UK hopes to have a framework agreement in place in time for a summit in London in May. The primary focus is security, but that is intended to be a forerunner to closer trade alignment.

As an indication of accelerating rapprochement, Rachel Reeves, the Chancellor, has just attended a meeting of EU finance ministers in Warsaw. Plans have been announced for a pan-European defence procurement fund with the UK expressing an interest to be included. There are hurdles still to be overcome but also strong will on both sides to make it happen. It is a measure of how much more constructive diplomacy has become under Labour. No Tory government would have sought such collaboration. Regime change in Westminster made a closer EU-UK relationship possible, then Mr Trump’s rampage of destruction through the norms of transatlantic security and global trade made it urgent.

The Brexit withdrawal treaty and subsequent trade and cooperation agreement were deliberately shaped by Boris Johnson’s government to impede reintegration on any level. Irreversible divergence was the whole point. But, while there is no great appetite in Brussels to revisit the terms of Brexit that damaged British businesses and interests more than the EU, recognition of a mutual strategic interest and a more constructive disposition are necessary. The long-term economic rational is being hampered as the UK continues to operate within red-lines drawn by domestic electoral imperatives.

European leaders fully understand that democratic politicians must defer to public opinion. But with Sir Keir Starmer having earned goodwill through his diplomatic advances, the prime minister’s reluctance to ever challenge the fallacious premises of Brexit, even after winning a landslide general election victory last year, raises doubts about the true scale of his ambition when it comes to the EU reset. That misgiving is magnified whenever British ministers talk enthusiastically about their dealings with Mr Trump, who doesn’t hide his hostility to the European project. Sir Keir insists it is not a binary choice, but it will become one as soon as concessions to the White House threaten to destroy trust in Brussels or further impede access to the single market.

The claim that the UK can be equidistant between Europe and the US may feel like keeping options open, but in Brussels it looks like a reversion to typical British Eurosceptic ambivalence. Sir Keir faces a stark strategic dilemma, and his options get worse the longer he defers the choice.

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