Deep down, President Biden knows that a US-UK trade deal makes perfect sense
Argentina’s invasion of the Falklands was a massive headache for the Reagan administration. While Britain was America’s foremost Nato ally, Galtieri’s junta was seen as a bulwark against communism, and the Organisation of American States was backing Argentina’s claim. The State Department’s instinct was to broker a compromise between the two belligerents.
The US Senate, by contrast, was in no doubt about where it stood. A motion calling for an immediate Argentine withdrawal passed with only a single dissenting vote (that of the lifelong contrarian Jesse Helms).
The senator who proposed it was Delaware’s Joe Biden who, strange to think, had by then already held office for nearly a decade. “My resolution clearly calls for us to state whose side we’re on, which is the British side,” he told CBC. The United States, he added, should leave no one in any doubt that she was “standing with our closest and oldest ally and the alliance that is most important to America”.
I have never bought the idea that Biden’s indomitable Irishry makes him anti-British. Sure, some IrishAmerican politicians (though hardly any Irish politicians, these days) feel that the one stance must imply the other, but Biden is not among them. Even when, under Bill Clinton, he horrified American security officials by lobbying to get Gerry Adams an American visa, he was not hostile to the UK. His first phone call as president was to Boris Johnson, and his first overseas visit was to Britain. He has stood resolutely by the Aukus pact, brushing off European criticism.
Why, then, is he in no hurry to sign a trade deal with us? For the most basic reason of all: he is in no hurry to sign trade deals with anyone. Donald Trump’s malign ascendancy moved the dial on international commerce. Politicians in both parties started repeating his claptrap, partly from conviction but mainly from electoral calculation. All sorts of nonsensical ideas – ideas that had been definitively disproved by Adam Smith two-anda-half centuries earlier – came back into circulation. The idea, for example, that a trade deficit undermines a nation’s long-term prosperity (there is no correlation); the idea that trading with low-wage economies destroys jobs (it may shift a few low-paid jobs, but it creates many more high-paid ones); the idea that governments should “protect” key industries (doing so invariably makes them flabby and inefficient – as Ronald Reagan used to say, “protectionism” should really be called “destructionism”).
America’s illiberal drift was accelerated by Covid which, illogically but inexorably, made people warier and more introverted. In the run-up to the 2020 elections, Republican candidates were looking over their shoulders at Trumpy primary voters, and Democrats were looking over theirs at anxious trade unions.
Joe Biden didn’t survive half a century in front-line politics without knowing how to respond to the public mood. “As President”, announced the man who had sought Atlantic and Pacific trade deals under Obama, “I will not enter into any new trade agreements until we have invested in Americans and equipped them to succeed in the global economy.”
In the short term, at least, Britain has missed her moment. We wasted the first three years after the Brexit vote with an idiotic internal debate about whether we wanted an independent trade policy at all. Then, just when we decided that we did, in smashed the wrecking ball of the coronavirus.
That does not mean, though, that there is no progress to be made. What, after all, is a trade deal? It is not, as commentators sometimes seem to imply, a kind of permit that allows countries to sell to each other. Rather, it is a framework that pulls down identified obstacles and prevents the installation of new ones – or at least provides mechanisms for redress if they are erected.
We are not seeking to establish some wholly new relationship with America, as if we were Elizabethan emissaries approaching Muscovy or Cathay. Rather, we want to scrap outstanding restrictions.
Much can happen through sectoral deals. In recent months, officials have persuaded the US to drop its bans on British beef and lamb – the second being potentially hugely significant in a country that is just starting to acquire a taste for the stuff. They have defused the Boeing-Airbus dispute that had thrown up pointless and vexatious tariffs on products ranging from Highland knitwear to whisky. All this has gone hand-in-hand with arrangements between trade bodies.
When Liam Fox began scoping the trade talks, he privately argued that a series of mini-deals might be the easier way forward, precisely because it would avoid a big set-piece that would bring out the worst tendencies on both sides (American mercantilists have their British equivalents in those resentful Remainers who are suddenly pretending to be alarmed about American steak).
There is something in Fox’s analysis, but the underlying logic continues to pull towards a comprehensive deal that will provide a framework within which technologies and products yet unborn can circulate unhindered. Consider that each country is the other’s largest investor. A million Americans work for British-owned companies and a million Brits work for American-owned companies. That mutual ownership rests on obvious congruities of language, commercial law, business etiquette, accountancy systems and culture.
These same congruities ought to make the two countries natural trading partners – and would have decades ago had it not been for EU protectionism in agriculture and heavy industry. Similar wage levels and interoperable professional bodies make the mutual recognition of qualifications relatively straightforward. The few tariffs that remain on manufactured goods (notably cars) could easily be swept away.
Britain wants greater access for its financial services firms, the US for its farmers. The first is more economically significant, the second politically tougher. But let’s not make the mercantilist error of seeing imports as a concession. Allowing British financial services to compete freely in all 50 states will chiefly benefit American consumers. Letting US beef appear on our shelves will chiefly benefit British consumers.
The immediate consequence of Biden’s reluctance to go for a fullyfledged free trade agreement is to make it easier for Britain to repudiate the Northern Ireland Protocol. The main argument against unilateral abrogation was that it would hamper trade talks. But with a deal some years off, we should act now, show the world that a new arrangement does not require border infrastructure, and negotiate from there.
In the long run, this is about much more than commerce. The friendship that has existed between the two great English-speaking democracies since 1898 (broken once, and disastrously, when the US failed to back the Suez intervention) has made the world richer, safer and freer.
The values we now call universal – human rights, representative government, impartial courts, private property, free contract, personal autonomy – were largely developed in the language in which you are reading these words. If they became universal, it is because the Anglosphere triumphed militarily, first against fascism and then against revolutionary socialism.
Those values seem suddenly contingent, the world order on which they rest fragile. Power is tilting towards altogether grimmer and more autocratic regimes. In such a world, the English-speaking peoples must again be ready to act in concert. Yes, the primary need is for military cooperation, diplomatic support and intelligence-sharing. But the strongest alliances are underpinned by economics. Our ultimate goal should be not just an ambitious UK-US free trade agreement, but an Anglosphere market.
It may be that, in due course, Biden will re-enter the Pacific trade deal that the Obama regime negotiated and Trump rejected. If so, the US would be joining Australia, New Zealand, Canada and (by then) the UK. A deeper Five Eyes trade arrangement could nestle within the Pacific pact, as the Australia-New Zealand deal does today.
Perhaps – who knows? – Ireland might one day want to join. John F Kennedy, the first US President of Irish Catholic origin, was perhaps the most solidly Anglophile leader his country has had. He was obsessed with British history, saw Winston Churchill as the saviour of freedom and, deep down, wanted to put right the defeatism that his father had displayed as ambassador to London. It was JFK who, in 1962, knocked aside the doubts of his officials and insisted on giving the UK an independent nuclear deterrent – thereby, ultimately, making the Aukus deal possible.
The Anglosphere alliance does not rest on the temperament of its national leaders. It rests, ultimately, on the readiness of its constituent nations to stand together for freedom – a readiness that may be tested sooner than we know. And in his heart, Joe Biden knows it.
This is about much more than commerce. Our friendship has made the world richer, safer and freer