UK Prime Minister Theresa May and Shinzo Abe, the Prime Minister of Japan. Official reception in Tokyo. Picture taken on 31 August 2017. UK Government work, some rights reserved.
The British Prime Minister Theresa May is amidst an agonizing effort to put together a decent package of trade deals or at least initial and relevant MOUs for the after Brexit era. The obvious reason for that is to convince the Brits and the Parliament that her country will survive after March 2019, in case a favorable agreement with the European Union is not struck. It seems however, that she cannot even present traces of tangible options about a rapprochement with major world trade powers.
As things stand now, Britain will be in thin air after Brexit, as far as foreign trade is concerned. That’s why the British Government is actually proposing to Brussels, at least indirectly, to establish a no-change interim period after March 2019. During this time, which may last four years, Britain will continue being a part of EU’s customs union and internal market, exactly as it is today. But let’s take one thing at a time.
Looking eastwards
Last week, Theresa May went to Japan to seek a favorable statement about future trade relations of the two countries. She was looking for at least a positive statement about a potential free trade deal, at least like the unsubstantiated one the US President Donald Trump is liberally and verbally offering to Brexiteers. Alas, the Japanese are very reserved people and don’t make inane offers. On top of that, the core basis of their country’s economic success and wealth is free trade and progressing globalization, a policy line the Brexiteers have fought to win the Brexit vote.
Unfortunately for May, the leaders of the Japanese industrial and financial business conglomerates know very well that the Brexiteers are fervently opposing globalization. They also know that along those populist policy lines May’s colleagues now strive to abandon the EU the hard way. All this means that Britain under May cannot be a reliable partner in a free trade deal. Also, not to forget, the main Japanese industrial and financial groups have heavily invested in Britain aiming at the entire EU market. The UK market alone doesn’t mean much for the Japanese giants.
Alarmed Japanese
For this reason, Tokyo is alarmed with the possibility of Britain leaving the European Union in a way which will threaten the Japanese fixed investments in key sectors like industry and finance. No wonder then why May didn’t manage to bring anything positive back from Tokyo. On the contrary, the British delegation was officially informed that there cannot be any discussion about future trade relations between the two countries, before the terms of the Brexit are known in details. Tokyo doesn’t mind much about a trade agreement with the UK, but cares immensely about economic relations with the EU and of course is concerned about the future position of the UK in Europe. Japanese officials must have not stated it clearly, but reportedly they told their British interlocutors that Tokyo prefers the softest possible Brexit, as the best guarantee for their country’s interests in the Old Continent, including Britain.
Japan is the third largest economy of the world and is prospering on free trade and globalization, that May and her colleagues are opposing or at least can’t really influence in general. This blatant reality ruins every effort by London to find willing future trade partners in East Asia or elsewhere in the world. Even Canada and Australia, two countries heavily depending on exports, which belong to the British Commonwealth under the English Sovereign, will think twice before talking to May about globalization and free trade. They already have had hard times with the populist protectionism of Donald Trump, and May can emerge as free trade advocate only as a female harlequin.
Relying on Trump or the EU?
As for a possible generous trade deal with the US, London has already understood two things. Firstly, what Trump says about Britain favoring Brexit and accusing the EU of protectionism, if anything, do not necessarily produce tangible gains for the UK. Secondly, a closer relation with the US under Trump is far from constituting a trusty substitute to the EU and a reliable future trade partner. Even if London didn’t have any geopolitical problems concluding trade agreements with many countries in the next few months, the technical side of the task would prove impossible. It is humanly impossible to substitute the 40 or so EU foreign trade agreements the UK in now a part of, as a member of the club.
So, according to a Reuters’s sources in the newly instituted foreign trade ministry, the Department for International Trade, the only solution is to ‘copy paste’ the agreements the EU has signed as a block during the past decades. In this way, the UK practically extends its the present relation with the EU, an option which gradually appears as Britain’s only viable solution. The European Sting reported and commented on this prospect as the only way out the London government is currently contemplating. However, during the next months there has to be a lot of ‘political digesting’ towards this direction.
A soft Brexit
Yet, the UK in order to preserve its full participation in EU’s customs union, has to accept terms and conditions very similar to full membership. It remains to be seen though if Berlin and Paris will not grab the opportunity to humiliate and punish the UK and exploit London’s difficult position. In reality, fifteen months after the Brexit vote, nothing is clear or starting to be clarified.
In the end, 10 Downing Street, under May, or whoever succeeds her in this ‘electric chair’, may have to convince the Brits and the Parliament that there is no other solution for London than full capitulation to Brussels. Historically, this can practically reverse the results of the game changer Battle of Waterloo, at the beautiful suburb of Brussels. This time the Prussians have already taken positions in the field.
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