03 October 2016

Paul Goldschmidt: Brexit and TTIP

Boris Johnson's strategy - who continues to proclaim that Britain will be restored to its former status of “world power” as the foremost champion of global free trade - is likely to complicate trade negotiations either between the EU and the UK or between the latter and the rest of the world.

[...] If such declarations are apt to galvanise a public still under the shock of the consequences of the Brexit vote, they seem, nevertheless, to ignore completely the mood of worldwide public opinion which is questioning the relevance and benefits of globalisation. This deeply ingrained trend (with which I am in fundamental disagreement) explains the growing appeal of national-populist political parties be it on the European continent (Front National, AfD, 5 Star movement, Syriza, New Finns, etc.), in the USA (Trump) or in England (UKIP). [...]

Agreements between major trading blocs are highly desirable (NAFTA, the Single Market, China, Mercosur, India) but the parties must have sufficiently homogeneous characteristics to avoid the domination of the weak by the strong which only encourages counterproductive protectionism. Whatever the importance of Britain or Japan, they will never carry enough weight to impose their views on their larger counterparts.
 
That is the reason why it is of the utmost importance that the EU 27 reinforce their cohesion in the face of the world (including the UK). As Donald Tusk has stated, the EU must defend its interests, speaking with one voice, because, whatever Boris Johnson may believe, the EU 27 (+ EEA members) will always - by far - choose to promote exchanges within the borders of their own “common market” (including in related areas such as freedom of movement), rather than privilege relations with the UK or, for that matter, with any other trading partner. It is only under such conditions that fair deals can concluded with the USA or China, relegating an agreement with the UK to the proverbial “back of the queue”.
 
The challenge is enormous and the choice of triggering Art. 50 by the end of March far from insignificant: it will increase the ability of the English to divide the EU 27 because France and Holland, followed by Germany, will, in the midst of their respective electoral campaigns, tend to allow domestic issues to dominate the political debate. Furthermore, pressures exerted by extremist parties as well as the sluggish economic environment are likely to lead to concessions that may turn out to be incompatible with the necessary further integration of the EU.
 
In conclusion, whatever the appearances may be, the real stakes of the liar’s poker game that is unfolding in the aftermath of Brexit is a choice between the dismembering of the United Kingdom or of the European Union! If the EU is capable of meeting the challenge successfully, it will then be in a strong position to promote the interest of its citizens and revitalise with a future likeminded American Administration the TTIP negotiations.

Full article on Paul Goldschmidt website

© Paul Goldschmidt