Dynamics can change rapidly in politics. Less than a year ago, Boris Johnson hailed his general election win as a new dawn for Britain. With an overwhelming Conservative majority, Johnson was ready to embark Britain towards its global status, forging free trade deals around the world without interference from powers at Brussels.
Brexit Conservative backbenchers in line with Ian Duncan Smith, have long yearned for an ambitious post-Brexit free trade deal with the United States. In Johnson, Eurosceptics had a leader who championed the Brexit campaign and who was prepared to deliver a trade deal with the United States rather than achieving an agreement at all cost with the European Union. Crucially in the former Mayor of London, Brexit hardliners believed that Johnson would be a more suitable leader in achieving a trade deal with Donald Trump, given their similar personality traits and their aversion to the European project.
Fast forward a few months later, with the coronavirus pandemic crippling the British economy combined with Joe Biden’s victory, Johnson finds himself under increasing pressure to reach a trade deal with the EU. This is compounded by the fact that the incoming president is a staunch multilateralist and will therefore give priority to the United States traditional allies, especially those who saw their relations with the White House strained under the Trump administration. Johnson must now show to Biden that he believes in his conception of international relations. However, this is strained by the ongoing dynamics at Westminster and in the difficulties of advancing negotiations with the EU.
Negotiations remain contentious
With less than seven weeks remaining before Britain leaves the single market, fundamental disagreements remain with the EU, meaning that future trade relations remain uncertain. Among them are the extent to which the UK should follow EU standards related to labour, environmental issues such as industrial pollution and government support for the private sector as well as fisheries.
The consensus within the UK government remains that an agreement should not be reached with the EU at any price. On ‘The Andrew Marr Show’ last week, the Chancellor of the Exchequer Rishi Sunak, said that although he hoped for a trade deal, the government will not push for a deal with the EU at any price, insisting that the coronavirus pandemic posed a greater threat to the UK economy than Brexit. This is contrary to the claims of leading economists at Goldman Sachs, who estimate that the economic cost of a no deal outcome would be two to three times higher than that of COVID-19. Indeed, the absence of a trade agreement would mean that future trade links between Britain and the EU would revert to World Trade Organization terms, where the movement of goods would be subject to tariffs and controls.
For businesses, jobs, and economic confidence, this would have significant negative implications. The Japanese carmaker Nissan Motor Co., which employs 7,000 people in Sunderland, has indicated that its British subsidiary would not be viable since car exports to the European market would be subject to a 10 percent tariff. In a high-volume low margin business, a 10 percent tariff would remove any chance of businesses remaining competitive and would ultimately have an impact on employment. The multinational law firm Baker & McKenzie has already reported that the expected loss in output for the UK main manufacturing sectors from a no deal Brexit and COVID-19 would amount to £28 billion.
Internal Market Bill
The British government’s Internal Market Bill is another divisive piece of legislation that has sparked discord in Brussels and in the Biden camp. Johnson is pushing for this legislation, in the absence of a trade agreement, the bill will ensure that all goods and services will continue to circulate in the UK’s four constituent countries on an equal and duty-free basis. Downing Street’s main concern is that without this legislation, powers in Brussels will use the Northern Ireland protocol to gain leverage over the UK by aligning certain EU rules to Northern Ireland so that goods will continue to flow into the Republic of Ireland. In this situation, the British Prime Minister believes that this could lead to potentially significant challenges being applied to goods moving from Britain to Northern Ireland.
The EU and the Democrats are concerned that if the bill becomes law, it will lead to the reimposition of a hard land border between Northern Ireland and the Republic of Ireland and therefore, erode the stability that has underpinned peace since the 1998 Good Friday Agreement. Prior to this year’s presidential election, the Speaker of the United States House of Representatives, Nancy Pelosi, warned that Britain would not be able to secure a future trade deal with the United States if it undermines the Belfast agreement. Already, Biden, who has Irish heritage, used his first phone call with the British Prime Minister to warn him against undermining the longstanding peace on the island of Ireland.
Over the past month, the European Commission has expressed its disapproval by launching legal action against the bill on the grounds that it runs counter to Whitehall’s earlier commitment under the Withdrawal Agreement. Such infringements could lead to significant fines being imposed by the European Court Justice.
With the House of Lords withdrawing the rejected clauses from the Bill, restoring the rejected clauses would only complicate Whitehall’s ability to reach a deal with the EU.
Special Relationship at risk
Downing Street’s policy on Brexit clearly risks undermining future relations with the incoming president. In the absence of a trade agreement with the EU,if parts of the Withdrawal Agreement are also overturned then relations with a Biden administration will get off to a turbulent start.
Failure to conclude a comprehensive trade agreement by the end of the year will also signal to the future president and Democrats that the UK is willing to turn its back on its neighbours, just as Biden wants to rebuild bridges with the EU. As former vice-president under President Barrack Obama, Biden saw how Downing Street could act as a bridge between Europe and the United States. Already this week, Biden appointed Antony Blinken to the coveted Secretary of State position and John Kerry to the role of Climate Envoy. Both Blinken and Kerry are fluent in French, which signals Biden’s willingness to engage more closely with Washington’s traditional allies, particularly in Paris and Brussels, on international issues.
For Johnson, the challenge now is to convince the incoming president that he no longer aspires to become a Trump-style national populist that many Democrats perceive him to be, by fully committing to multilateral cooperation.
In a sign of changing power dynamics, Boris Johnson top aide Dominic Cummings, who was a driving force behind an antiestablishment turn of Britain’s Conservative Party, has resigned. Architect of Brexit, Cummings departure could be the prelude to a more compromising tone in negotiations with the EU, thus giving way to a greater willingness on the part of the Johnson government to reach an agreement. However, the broad sentiment in Brussels remains that Europeans don’t see the Prime Minister in a hurry to make up his mind, as time is running out. This will not please Biden’s foreign policy team.
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