Britain aligns with EU rivaling US on trade and Iran, abandons bilateral ‘Midsummer Night’s Dream’

Cecilia Malmström, Member of the European Commission in charge of Trade, receives Tarō Kōno, Japanese Minister for Foreign Affairs. Date: 25/04/2018. Location: Brussels – EC/Berlaymont. © European Union, 2018 / Source: EC-Audiovisual Service / Photo: Lukasz Kobus.

Last Sunday 29 April, Britain determinedly joined the other two major European Union powers, Germany and France in cautioning the US not to activate its super levies of 25% and 10% on imports of steel and aluminum respectively. Donald Trump, the president of ‘America first’, on 23 March had announced the imposition of the above mentioned extra tariffs on related items imported in the US.

Some days later he deferred for 1st May the application of the new levies on relevant imports from Canada, Mexico, the EU, Australia, Argentina and Brazil. Last Monday he deferred them again for 1st June. On top of that last Monday London joined Berlin and Paris in asking the American President not to repudiate the P5+1 nuclear non-proliferation agreement with Iran. The three European leaders had participated in a joint conference call. Let’s take one thing at a time.

With the EU on trade

Only hours before midnight of Monday 30 April, the White House announced a new deference for the application of the new tariffs on imports of steel and aluminum from Canada, Mexico and the EU for 1st June, while it said it granted permanent exemptions to Australia, Brazil and Argentina. It’s not clear on what terms the exemptions were granted to the last three countries, but a relevant arrangement with South Korea is a strong indication about what Washington wants. Seoul says, South Korea has accepted to impose self restrictions on steel exports to the US by 30% on the 2017 quantities, in exchange for the permanent immunity. As for aluminum products, this country is still subject to the 10% extra tariff on her exports to the US.

Understandably the European Union hasn’t welcomed the deference for another month and keeps asking for a permanent exception. It also complained that the American ruling has already disturbed international trade, resulting to increased steel exports to the EU from all over the world, because of the open character of the club’s internal market. To be noted, Brussels and more precisely the European Commission, exclusively manages and decides about the entire package of foreign trade terms and conditions for all EU member countries. In view of Brexit though, Britain has been advertising she visions some different, bilateral trade packages of its own.

EU to retaliate

Nevertheless, last Sunday, London aligned with Brussels in telling the US they don’t accept a South Korean-type deal, demanding a permanent exemption. Cecilia Malmstrom the European Commissioner for Foreign Trade has threatened the US with retaliation (see European Sting lead of 2 May). In any case, the Brussels’ answer is designed to be moderated value wise in response to the US possible application of the new tariffs. It will concern American goods of a value of €2.8billion, compared to €6.8bn targeted by the US. Britain is one hundred per cent behind Malmstrom in this.

It’s very interesting then to notice that Britain, being on her way out from the club in less than a year from now, is fully cooperating with the EU in this affair. Not a word about a bilateral agreement between the UK and the US. According to Reuters, “The leaders of Germany, France and Britain urged the U.S. government on Sunday to steer clear of imposing unilateral trade measures against the European Union”.

Together on Iran too

There was more to that. London is also cooperating very closely with Berlin and Paris in urging Washington not to kill the P5+1 nuclear agreement with Tehran. Back in June 2015 the US, Russia, China, Britain, France and Germany signed a nuclear Agreement with Iran. It provides for a full stop of the Iranian nuclear arms program, in exchange of a partial lifting of the trade sanctions the world had imposed on that country.

The Europeans now ask the US President not to realize his threat and repudiate the P5+1 Agreement. According to the American law, Donald Trump has to decide this month, if the US is to uphold the P5+1 Agreement or Washington chooses to restore the trade and other economic sanctions on Iran. The three European countries seem to have important joint interests in safeguarding the Agreement, which opens the way for big EU business deals in Iran.

For one thing, Airbus has already signed a preliminary agreement with Tehran, for the sale of tens of European commercial aircrafts. Britain has a large stake in Airbus together with France and Germany. The Americans have shown no interest in doing business in Iran. Bit by bit, Britain finds out that leaving the EU will create rather than solve problems.

Aligning with the Commission

It’s more interesting to watch London unreservedly joining Berlin and Paris in pressing the Americans through the EU Commission, about the steel and aluminum issue. No signs whatsoever of UK proposals to the US for bilateral solutions. Theoretically, Britain by leaving the EU in March 2019 is above all counting on developing bilateral trade agreements with the world major economies, and the US should be a prime target under this Brexiteer theorizing. Still, this week, London decided to join mainland Europe in asking the US to work with the EU on a multilateral trade pact. There is strong evidence about that here below.

According to a Reuters report, a British government spokesperson said “the extension (in relation to the steel and aluminum tariffs) for the EU was ‘positive,’ but the UK steel and aluminum industries needed safeguarding. We remain concerned about the impact of these tariffs on global trade and will continue to work with the EU on a multilateral solution to the global problem of overcapacity, as well as to manage the impact on domestic markets.”

Why leave the EU then?

It’s a revelation to see Britain zealous about working “with the EU on a multilateral solution”. The British Brexiteer government ministers – with first among them the unbelievably heavy liar Boris Johnson, the Foreign Secretary – have been trumpeting the ability of the UK to determine alone its foreign trade prospects after leaving the EU. However it becomes now clear the Theresa May administration has no other policy option, than rejoining the EU and participating and working with mainland Europe in a campaign to protect key multilateral trade packs, including the Iranian deal. Certainly, in 10 Downing Street they have understood the hard way, that the other approach, the single British solution, leads to dreaded dead ends.

London is not any more asking  the US for a ‘preferential’ bilateral agreements as Brexiteers deceitfully told their fellow Brits, to convince them to vote ‘leave’. There is no such thing. As a result, in the first major disturbance of the global order, Britain forcefully rejoins the security of the European Union. It’s a clear revelation of how gigantic were the lies the Brexiteers sold to the Brits.