15 August 2019

With the UK and EU still on course for a No Deal Brexit, the US National Security Adviser, John Bolton, came to London for talks this week. He said that Washington was eager to agree a post-Brexit free trade deal with the UK. Describing the UK as “first in line” for a deal, he even suggested the prospect of ‘sector-by-sector’ deals to isolate areas which are more challenging to negotiate, such as agriculture or financial services. Bolton is not an official trade negotiator, but his remarks illustrate this US Administration’s desire to forge a closer relationship with the UK post-Brexit.

Securing a deal with the US promises to be challenging. There would be difficult hurdles to concluding negotiations and ratifying a deal both in Washington and Westminster. A potential deal is already a political football in the US. The Speaker of the House of Representatives, Nancy Pelosi, whose Democratic Party controls the House, yesterday repeated her warnings that “If Brexit undermines the Good Friday accord there will be no chance of a US-UK trade agreement passing the Congress.” A deal would also be politically controversial in the UK. It’s worth remembering that the Leader of the Opposition, Jeremy Corbyn, was opposed to a US-EU trade deal when Barack Obama was in the White House.

The UK is no stranger to the need to strike a balance in its relationships with both the US and the EU. This is already visible in foreign policy and security matters. The UK was eager to join a US-led operation in the Strait of Hormuz, when Germany refused and France was reluctant. On sanctions, for example, once the UK has its own independent regime, it will have the opportunity to align with the US rather than the EU if it so chooses.

The next important episode will be the G7 summit in France on 24-26 August, when Prime Minister Boris Johnson will meet several EU leaders, as well as US President Donald Trump. US Vice President Mike Pence will also visit both the UK and Ireland at the beginning of September. The signals sent during these meetings, where global issues including US-China trade tensions and relations with Iran will be discussed, will be well worth watching.

In a No Deal Brexit outcome, the UK will have more freedom, and potentially an incentive, to shift direction towards the US on trade and security issues. Little debated in Westminster, where the focus is on parliamentary manoeuvring ahead of 31 October, the wider implications of how Brexit might play out are surely being considered in Washington, if not in Paris and Berlin.

 

News in brief

1. Corbyn calls for “temporary” Labour government to avoid No Deal

The Labour leader sent a letter to the Scottish National Party, Liberal Democrats, Plaid Cymru and Greens leaders as well as four Conservative backbenchers, asking them to support a vote of no confidence in Boris Johnson and his plan to form a “strictly time-limited temporary government.” He says his temporary government would seek to call a general election before the UK withdraws from the EU and he would ask the EU for the necessary extension to Article 50 to do so. Corbyn has pledged to campaign for another referendum with a “Remain” option on the ballot, in an effort to gain the support of those calling to stay in the EU. However, Lib Dem leader Jo Swinson has already rejected the proposal.

Shadow Business Secretary Rebecca Long-Bailey said this morning that Labour will back a no-confidence vote “as soon as possible” in early September.

Separately, Sarah Wollaston, the MP who resigned from the Conservative Party to be part of the Independent Group for Change, yesterday announced she would join the Lib Dems in order to fight against No Deal. She also said that Corbyn “won’t find the support of the Commons.”

2. The Brexit blame game continues

Boris Johnson has accused MPs who want to block No Deal of “collaborating” with the EU, pointing out that if the EU “think there’s a chance that Brexit can be blocked by Parliament, the more adamant they are in sticking to their position.” He once again called on the EU to compromise and renegotiate the Withdrawal Agreement.

Meanwhile, the EU has refused to reopen negotiations on the Withdrawal Agreement and expects the UK to come up with proposals for changes to the Political Declaration which would help the deal pass through Parliament. According to EU sources quoted by The Sun, the EU27 have concluded that the UK is not serious about negotiations and Johnson is heading for No Deal deliberately.

3. German economy shrinks

Germany’s GDP fell by 0.1% in the three months to June, according to new figures from the Federal Statistics Office. Factors involve the trade tensions between the US and China, problems in the German car making industry, as well as a slower job growth.

4. Meanwhile in Italy

A confidence vote in Italian Prime Minister Giuseppe Conte will be held on 20 August. This comes after Deputy Prime Minister and leader of the right-wing Lega Party, Matteo Salvini, declared the coalition government between Lega and the Five Star Movement to be over. If the vote is lost a caretaker government could be put in place, or the Italian President can call a snap general election.

 

 

Open Europe in the media

Open Europe’s Chairman and the CEO of Next, Lord Wolfson, told BBC Radio 4’s Today programme that we “are a long way from disorder and chaos” under a No Deal Brexit. He added, “The encouraging thing is that we are rapidly moving from the disorder and chaos camp to the well-prepared camp. I should stress that I would much prefer a deal to No Deal, but I am much less frightened by No Deal if the Government is prepared, and there is every indication it’s taking it more seriously.” Listen to the full interview here.

Our briefing from last week, by Dominic Walsh, was quoted by the Parliament Magazine.