Is Britain to sail alone in the high seas of trade wars?

Michel Barnier, the chief EU negotiator for Brexit speaks at the BUSINESSEUROPE Day 2018. Date: 01/03/2018. © European Union, 2018 / Source: EC – Audiovisual Service.

If Britain is counting on the US for a favorable bilateral trade agreement after Brexit, Donald Trump the President of ‘America first,’ rushed last Thursday to destroy that Brit dream; he announced 25% extra tariffs on steel and 10% on aluminum imports, prompting anger and retaliatory measures from America’s closest political allies, Canada and the European Union. Actually,  Trump is starting an all out trade war and blatantly said “it’s a good thing”. Individual countries, like Britain outside strong clubs like the EU or big enough like China will find it very difficult to survive. As they say ‘when the buffaloes fight in the swamp, the frogs pay the dearest price’.

Before Trump though, it was Michel Barnier, the EU Brexit chief negotiator who traded an even stronger blow to Britain. In the early hours of the last day of February the European Commission published its draft Withdrawal Agreement between the European Union and the United Kingdom. This is a legal text of 119 pages under the title of Draft Withdrawal Agreement, setting the EU terms for the exit of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community. It sets out the Brussels positions on all the main items of the Brexit procedure.

Polemic EU Commission

According to the European Commission, the draft Withdrawal Agreement “translates into legal terms the Joint Report from the negotiators of the European Union and the United Kingdom Government on the progress achieved during phase 1 of the negotiations, published on 8 December 2017, and proposes text for those outstanding withdrawal issues which are mentioned in, but not set out in detail, in the Joint Report. It also integrates the text on the transition period, based on the supplementary negotiating directives adopted by the Council (Article 50) on 29 January 2018”.

The hottest part in this paper is about Ireland. This EU proposal for an after Brexit EU-Britain deal, leaves Northern Ireland within the EU, thus cutting the UK in two. The document states, “The territory of Northern Ireland… shall be considered to be part of the customs territory of the Union”. In other words, after Brexit, Northern Ireland continues to be a part of the EU, while the rest of the UK remains outside the club. This is tantamount of erecting customs controls and checks between the island of Britain and Northern Ireland. In short, there goes the United Kingdom.

Cutting the UK in two

Theresa May’s government rejected it right away. The 10 Downing Street lady tenant stated in Parliament “no prime minister could ever agree to these terms as they would threaten the constitutional integrity of the UK”. She also clarified “The draft legal text the Commission have published would, if implemented, undermine the UK common market and threaten the constitutional integrity of the UK by creating a customs and regulatory border down the Irish Sea and no UK prime minster could ever agree to it.” Other members of her government were even more aggressive.

There is more to it though. The text published by the Commission clearly states, “It (the draft Withdrawal Agreement) will now be discussed over the coming weeks with the Council (Article 50) and the Brexit Steering Group of the European Parliament before transmission to the UK authorities for negotiation”. The meaning of this paragraph is even more disparaging for the UK. It says the 27 EU member states of the Council and the European Parliament will discuss and agree on the final text of the Withdrawal Agreement.  The final version most probably won’t substantially differ from the just published document. Then it will be presented to Britain.

Take or leave it

At that stage it will be not a Commission proposal, but a final Agreement text on Brexit, being a unanimously ratified and cemented offer to Britain by the EU 27 and the European Legislative. As a matter of fact, it will be a ‘take or leave it’ offer to the Brits, almost impossible to be negotiated and changed in its main provisions. After the EU 27 member states and the Parliament have collectively formulated the text, it will be rather impossible for all of them to come back and change its main provisions. In such an eventuality, the situation will be tantamount to a European ultimatum to Britain, to either accept it or get lost in the high seas of international markets.

This brings us back to Donald Trump’s declaration of trade war, with his super tariffs on steel and aluminum imports. He appears quite defiant vis-à-vis the threats about retaliatory measures from the rest of the major global trading parties. He blatantly tweeted “trade wars are good and easy to win”. The International Monetary Fund among other international bodies, criticized this decision and “expressed concern about the proposed tariffs and said they likely would damage the U.S. economy as well as the economies of other nations”. According to reliable US sources, Trump’s tariffs on steel and aluminum may in the long run destroy more jobs than the ones to be created in the two sectors.

A ‘good trade war’

As things stand now, this Trump decision may be followed by more, equally disruptive White House pronouncements on international trade relations. He personally has said, the US needs balanced trade relations with all and every individual country. It’s highly improbable then, that the White House will offer Britain the ideal trade deal the Brexiteers have in mind.

In short, Britain after the latest Barnier bombshell is badly cornered and seemingly, the only possibility of salvaging the country from a disastrous Brexit may be a second referendum or a full participation in the EU customs union and internal market. In both cases, the Brexiteers have to swallow their tongues.

May’s ‘hard facts’

As a matter of fact, in last Friday’s Brexit speech, Theresa May, the British Prime Minister appeared more down to earth. She was diluting the Brexiteers dreams for a trade agreement with the EU to their full liking. May, clearly spoke about ‘hard facts” for everybody. According to her, one of those ‘hard facts’ is that “the UK would still continue to be affected by EU law and some decisions of the European Court of Justice, such as the ECJ rules on whether EU agreements are legal”. To be noted, ECJ’s authority in Britain after Brexit is anathema for the Tory hard Brexiteers. The day before May’s speech, Thursday, despite May’s clear retreat, Michel Barnier had rejected other of her key ideas, even before she pronounced them. He was commenting on information that she was expected to say the morrow.

In conclusion, with the global trade relations in a limbo, the 27 EU countries do not have the luxury to show more flexibility in the negotiations on the future trade relations with Britain, as May sought for last Friday. Simply asking is a bad sign for London and an avowal of being in the weak side. It may be depressing for the Brits to accept that, but unfortunately this is the way it is.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Deadly swine fever threatens Asia, UN agriculture agency warns, urging regional collaboration

With the right leadership, sustainable finance can help us shift to a low-carbon economy

The G7 should take the lead on ocean targets for 2020

More state aid to big firms, no special provisions for the SMEs

10th ASEM in Milan and the importance of being one: EU’s big challenge on the way to China

Friday’s Daily Brief: human rights in Sudan, sombre anniversaries for Rwanda and Nigeria, and fears of ‘chaos’ in Libya

Libya: $202 million needed to bring life-saving aid to half a million people hit by humanitarian crisis

Independent UN rights expert calls for compassion, not sanctions on Venezuela

Berlin repels proposal for cheaper euro

UN should be ‘exemplary’ in defending judicial independence, top Judge tells Security Council

Brexit: UK to suffer from EU’s uncompromising stance

COP21 Paris: The Final Agreement Adopted-full text

The ECB will do whatever it takes to set the Eurozone economy again in motion

A Sting Exclusive: “There can be no global deal on emissions without China and the USA”, Conservative MEP Ian Duncan stresses from Brussels

Why growth is now a one way road for Eurozone

Mario Draghi didn’t do it but Kim Jong-un did

IMF: When high yield goes boom

Burkina Faso: Dozens killed in clashes, UN chief condemns attacks

Western Balkans: European Parliament takes stock of 2018 progress

Ambassador Zhang wishes from Brussels great success and prosperity for the China-EU relations in the Year of the Dog

European Energy Union: Integration of markets and need for in-house energy production

Davos on Climate Change: citizens demanding more actions while CEOs tried to balance profit with sustainability

Here are five tips to make your message clear in a crowded world

Upgraded EU visa information database to increase security at external borders

ECB: A revolutionary idea to revitalize the European economy with cheap loans to SMEs

G20 to Germany: Abandon miser policies

Under-fives’ daily screen time should be kept to 60 minutes only, warns WHO

Women still struggle to find a job, let alone reach the top: new UN report calls for ‘quantum leap’

What could a no-deal Brexit mean for developing countries?

Conflict diamonds and climate change: Cooperate, don’t compete over natural resources urges Guterres

UN humanitarian coordinator condemns Central African Republic hospital attack as ‘inhuman and unworthy’

‘Free state aid’ for imprudent banks

European Accessibility Act: Parliament and Council negotiators strike a deal

What our leaders hide from us

2014 budget: The EU may prove unable to agree on own resources

Rule of Law: Commission launches infringement procedure to protect the independence of the Polish Supreme Court

Europe had a record year for Measles – and it’s partly down to anti-vaccine campaigners

The inhumane face of crisis mirrored in numbers

‘Address root causes’ of instability in Mali through ‘aid and support’ urges UN chief

Here are the biggest cybercrime trends of 2019

Evidence shows ‘brutal’ killing of Saudi journalist ‘planned and perpetrated’ by State officials: UN independent expert

Juncker and Tusk killed Greece on 07 July 2015 to meet the Commission’s summer vacation plan? #Grexit #Greferendum #Graccident

How Eurozone consumers spend their income when they have one…

Eurozone’s sovereign debt not a problem anymore?

Flexible jobs can make work-life balance worse, a German study finds

UN space-based tool opens new horizons to track land-use on Earth’s surface

Is it too soon to hope for a tobacco free Romania?

A young person’s perspective on the Paris and Beirut attacks and aftermath

Hostages to a rampant banking system

Europe led by Germany seems vulnerable to Trump’s threats

Posting of workers: final vote on equal pay and working conditions

The JADE Spring Conference 2017 is casting its shadows before

MEPs call for EU Magnitsky Act to impose sanctions on human rights abusers

Community Manager – 1289

Young students envision turning Europe into an Entrepreneurial Society

Shenzhen just made all its buses electric, and taxis are next

These 4 scenarios show how we might be working in the future

‘End the ongoing atrocities’ against people with albinism in Malawi, say UN rights experts

The world is facing a $15 trillion infrastructure gap by 2040. Here’s how to bridge it

Deal on protecting workers from exposure to harmful substances

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s