Why a May-Trump trade deal should ring all kinds of alarm bells
Date: 26 January 2017
Commenting ahead of the meeting between Theresa May and Donald Trump on Friday where they are expected to discuss a possible trade deal between the UK and the US, Nick Dearden the director of Global Justice Now said:
“A US-UK trade deal cooked up by Theresa May and Donald Trump should ring very loud alarm bells. For starters, Trump is unequivocal that he will only make trade deals that put the USA first, while May is desperate to ink anything to show that the UK has a trading future outside the European single market. That power imbalance means May is likely to concede all manner of ground to Trump for the sake of trying to shore up her own political credibility – and those concessions will carry a heavy price for British citizens.
“Modern trade agreements are increasingly not about tariffs – we have low tariffs with the US anyway – but making sure laws and regulations don’t obstruct the free flow of capital. These ‘obstructions’ are likely to include public services like the NHS, labour rights, consumer standards and environmental protection.
“The rise of Trump and right-wing populism across Europe have been fuelled by our broken economic system, which puts the demands of the ‘1%’ ahead of the rights and needs of the vast majority of humanity. A US-UK trade deal between May and Trump would likely deepen this inequality, rather than foster the sort of economic policies that could combat poverty, inequality and climate change.”
Global Justice Now is particularly concerned that a US-UK trade deal could impact on farming, finance, consumer privacy and the NHS, and would give US corporations sweeping new powers over UK laws:
- The US has always been clear that European food and farming regulations, which prevent the sort of high-intensity, high-chemical, low-animal welfare farming common in the US, are a “trade barrier”. Any deal will likely look at stripping away regulations on genetic modification, antibiotics and hormone use in farming. In turn, this will open up UK small farmers to devastating competition with US agribusiness.
- The US is extremely keen on intellectual property rules, and will push to protect the privilege of pharmaceutical copyright – at a cost to the NHS – and harsher copyright laws in general. It has been particularly interested in overturning laws that force foreign companies to keep data on local servers. That means allowing the Silicon Valley industries to move the data of UK people to the US, where they don’t have to abide by European laws on data privacy.
- Trump’s nominee for Commerce Secretary, Wilbur Ross, who is expected to shape trade policy for the new administration, has already told Congress that he wants to do bilateral trade deals which he sees as easy and quick. He wants to present other countries with a ‘take it or leave it’ model that includes stronger ‘enforcement mechanisms’. This is likely to mean a more extreme version of the ‘corporate courts’ system which allows foreign corporations to sue government for laws and regulations which damage their profits.
- Trump has an awful record on the environment and could well push for rules, already proposed in other deals, that makes discriminating between different sorts of fuels impossible. In other words, supporting renewables technologies when fossil fuels could do the job could become the basis for a trade dispute.
- The US has been more progressive on financial regulation than the UK, but Trump has already promised to sweep away Barack Obama’s post-crash financial laws. That will be welcomed by the City of London, which will want to use a trade agreement to lock in financial deregulation – making proposals to break up big banks or impose a financial transactions tax extremely difficult.
