Material World – Trade deals – and artful dealers
Noel Edmonds has much to answer for. His TV game show ‘Deal or No Deal’ popularised the idea of ‘deals’ as being one-time games. Each contestant had a box, which ‘The Banker’ would offer them money for, based on seeing the contents of other player’s boxes. The aim was to either have the £250K prize ticket in the box, or get The Banker to offer more money than the ticket in the box.
Most deals, though, are part of ongoing relationships: especially deals between enduring entities like countries. They are capable of constant and infinite revision. Good contracts allow the parties to vary the terms by agreement, rather than go to the palaver of completely striking a new arrangement. Edmonds, though, was an entertainer, and so could be forgiven for putting drama first; for politicians it is a different story.
Keir Starmer has been making hay out of having signed three trade deals with significant partners: USA, EU and India. Obviously, such agreements are complex, the result of many hours of hard work by professional negotiators and trade experts, and require the key role of a Prime Minister to choose winners and losers. It is right that in a democratic society such arrangements are made available for serious scrutiny and widespread deliberation, since the effects of trade deals are so far-reaching for so many people.
We do not, though, live in a properly democratic society: we live in a propagandised one. The party in government tries to spin complicated deals and draw our attention to what’s being won, while cannily hiding what’s being lost. They like to big-up the leader, ignoring the officials and their work. In these cases, the trade deals have often been commenced under the previous government and concluded under the current one. It would be interesting to see what difference the change of regime made: Starmer himself brayed in the House of Commons that he had struck deals where the Tory Party could not.
This hoopla is an interesting post-Brexit effect. Over the years, opponents of the EU tried to rein in the power of the government to strike deals through diplomacy, and the EU itself removed a lot of what goes on in trade deals from the back room and made it part of a public process via the EU Commission and Parliament.
Now that is all over, trade becomes an exclusive province of the executive: all relevant treaties are signed under Royal Prerogative. Other polities require treaties to be approved by their legislature, but there is no such requirement in the UK. Our democratic (such as they are) organs will only be involved in any legislation required to give effect to the agreement. This, in part, makes sense of the desire of the Prime Minister to make a big thing of it: this is an area where he alone can decide and give effect to such deals.
If we look, we can see that the UK actually has formal arrangements with most of the countries in the world. Even for those that it does not have a direct deal with, the World Trade Organisation rules are in place so trade can take place. So, in effect, so-called ‘Trade Deals’ are just a variance of existing relationships, and the relative formalisation or extension of existing rules .
The UK, its citizens and companies are currently the second biggest holder of US government debt . So, there is a natural intertwining of interest between the two economies, and British Prime Ministers love to talk about ‘the special relationship’, although it is not clear whether it is reciprocated.
‘The United States intends to provide certain key UK imports with modified reciprocal tariff treatment, based on our balanced trading relationship and shared national security priorities. Any such modifications will be consistent with those shared national security priorities’ .
So it is clear that joint military relations play a big part of the deal.
It should be noted, even if not written into the deal, that the US signed off on the Chagos Island deal around the same time as making the trade agreement again. Secret diplomacy is back, and great power politics has its part to play in the trade deals. Diego Garcia helps the US project its force over Pacific maritime trade, and the UK is in a position to assist that.
Shortly after Brexit, then Prime Minister Theresa May hinted darkly that Britain remains a military power. Clearly the UK government is leaning into that, using ‘security co-operation’ as part of its trading negotiation stance. This can be seen in the UK/EU agreement, where Starmer has been trumpeting getting UK access to the €150 billion Security Action for Europe (SAFE) fund: this will be used to support the UK’s armaments industry, which will doubtless, in turn, be used to fuel arms exports for both profit and strategic interests. Likewise, the deal will enable more top-level engagement between British and EU leaders for security co-operation.
The headlines of that agreement revolved around extending EU fisheries’ access to UK waters. This is an example of the government picking winners and losers. UK fishers could have had exclusive access to all the fish, but the UK government traded that for giving agricultural UK products easier access into Europe via the Sanitary and Phytosanitary (SPS) regime of the EU. This gives the lie to the so-called national interest: it is the particular interest of specific industries.
Hence, the India deal involves improved tariff terms for luxury goods like whisky and gin, hardly worthwhile to most people, but a significant gain for whisky distillers and distributors.
Trade deals are the way that capitalism tries to plan the world economy. If we lived in a democratic society, such arrangements would be subject to extensive public deliberation rather than the fiat of one man. We owe Starmer a debt of sorts: his hoopla shows how the system is run in the interest of war and profit rather than human need.
PIK SMEET