Lesson 1: No nation makes deals based on compassion

Delusions of grandeur: history teaches that trading between unequal partners has rarely been magnanimous.

Potential trade partners see a weak negotiating partner so desperately in need of markets to replace the EU that the UK will have little choice but to make concessions favouring other parties, writes Geoff Kitney.

When British voters chose to go it alone in the world, it is fair to say that many who voted that way had a strong belief that they were living in a country being prevented from achieving its potential.

To passionate Brexiters, the idea that freeing itself from the dead hand of the European Union would “make Britain great again” was what Brexit was all about.

To them, Britain’s glorious past was recoverable once the bulldog spirit was liberated from the EU yoke.

This view was based on what to them was the bleeding obvious – a nation with a glorious past had suffered grievously from pooling its destiny with countries of less glorious pasts, with inferior systems of government and without Britain’s potential to assert itself as a global power.

There are still people who remain convinced that for Britain to blossom, it just needs to cut itself away from Europe.

Nigel Farage, the face of Brexit, roared in his best Bulldog voice his outrage at the deal just done by United Kingdom Prime Minister Theresa May to clear the way to the next stage of the Brexit negotiations. He was appalled that May had conceded to EU pressure on the divorce bill and on arrangements for a Brexit transition rather than an abrupt and unconditional departure.

Farage and extreme Brexiters seem not to have noticed – or have chosen not to notice – that what the Brexit negotiations have revealed quite starkly is that the UK has a very weak hand compared to the EU.

The delusional optimism of those who argued that the UK could easily replace its trade with the EU with new partners who would line up to sign free trade deals favourable to Britain was always bound to be revealed to be misplaced

Once the May government concluded that it was more vital to Britain’s future than it was the EU’s for there to be a post-Brexit trade agreement, UK negotiators were in a much weaker position to resist EU demands on the divorce bill and the Irish border issue.

To most informed observers outside the UK, it always seemed inevitable that this would be the case.

Looked at from an objective point of view – free of the delusional nostalgia by which Farage and the UKIP crowd have been blinded to reality – it was always obvious that Britain needed the EU post-Brexit more than the EU needed Britain.

The delusional optimism of those who argued that the UK could easily replace its trade with the EU with new partners who would line up to sign free trade deals favourable to Britain was always bound to be revealed to be misplaced.

The madness of talk that suggested that separating itself from the single market on which a large part of Britain’s economy depended and replacing it with a miss-mash of trade agreements with countries with less interdependence with the UK has now been confirmed.

The agreement reached a few days ago that Farage and others have branded as a capitulation was, in fact, recognition of a political reality which was there from the start.

Britain and the European Union are bound together by economic forces that cannot be broken without immense damage, mostly to Britain.

It appears that, even within the Conservative Party, more sensible Brexiters have come to accept this and that it means that the highest priority for the government now has to be a trade agreement with the EU.

The potential partners that Brexiters saw for trade deals in a Brexit future – led by the United States – have little interest in helping Britain out by doing cosy free trade deals

The “no deal” option is not an option.

While some in the government clearly believed in the notion that Britain could be a beacon of virtue on trade, leading a potential global push-back from rising protectionist pressure by negotiating gold standard free trade agreements outside the EU, when they took a harder look at what is happening in global trade, they recognised that going it alone involved unacceptable risks.

The potential partners that Brexiters saw for trade deals in a Brexit future – led by the United States – have little interest in helping Britain out by doing cosy free trade deals.

On the contrary, what they see when they look at the UK outside the single market is a potentially weak negotiating partner so desperately in need of markets to replace the EU that it would have little choice but to make concessions favouring the other parties.

In world trade, no nation makes deals based on compassion. Trade deals are the ultimate in battles for advantage and self-interest.

Of course, this also applies to the European Union.

The Brexit decision – celebrated as an act of strength by the Brexit crowd – in fact has had the opposite effect. It has weakened Britain’s hand in world trade and, ultimately, as a world power.

The second phase of the Brexit negotiations – out of which UK negotiators will try to get a trade agreement with the EU that goes as close as possible to maintaining the advantages that Britain currently enjoys as a member of the single market – is going to be a hell of a battle.

And, at the end of it, on current indications, what will Britain have to show for it?

The signs are it will be far less than Brexit mania promised – and the response of the British public to this may become a source of further upheaval.

 


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Headline image: Destroying Chinese war junks, by E. Duncan (1843)
Credit: Wikimedia Commons

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