logo logo

Who is behind the push for a post-Brexit free trade deal with the US?

The Guardian | 4 December 2018

Who is behind the push for a post-Brexit free trade deal with the US?

by Felicity Lawrence

What is it that hard Brexiters and Donald Trump want so much in a free trade agreement between Britain and the US that they are adamant only a complete break with the EU could achieve it, while Theresa May’s deal scuppers it? The sort of deal they have held up as the Brexit prize is contained in a blueprint published by rightwing thinktank the Institute of Economic Affairs, called Plan A+. Last week it was told to remove Plan A+ from its website by the Charity Commission, for breaking rules on political campaigning. Boris Johnson, David Davis and hard-Brexit European Research Group members Steve Baker and Jacob Rees-Mogg have all lavished praise on it.

The blueprint is one of a clutch of overlapping efforts to write policy that a nexus of libertarian thinktanks in both the UK and the US has been busy drawing up since the Brexit referendum. Their starting position is that membership of the EU has stifled prosperity in the UK; they propose a bonfire of tariffs, quotas and anti-competitive rules.

The priority areas for removing “anti-competitive” EU regulations articulated in Plan A+ are unpicking data protection rules (GDPR) introduced by the EU to ensure privacy, and allowing the free flow of data across borders, which would let big tech companies use our data – or abuse it. EU regulations that require exporters using chemicals to present safety data to the European commission before obtaining authorisation for imports are a burden on business, including the plastics sector, the thinktanks say, and should go. Likewise pharmaceuticals companies find the requirements on transparency around clinical trials onerous and should be allowed longer patents – that is, more expensive drugs for the rest of us.

All services and government procurement should be opened to international competition. While these thinktanks acknowledge that opening up the NHS might be too controversial, they think it a good idea. And protections designed to avoid workers being exploited or undercut by cheap migrant labour, which, for example, limit the number of hours people can be asked to work, or require parity of pay with local workers for those posted abroad, should be removed, says Plan A+. The same goes for environmental protections, food standards and the precautionary principle that the EU favours when assessing risk.

The US sees many of these rules as protectionist, Plan A+ explains. It says that in order to persuade the US to make concessions that would allow the UK’s services sector greater access to its markets, Britain will have to make concessions on standards the Americans find irksome, especially in food, agriculture and other goods. The things the US complains about and wants conceded include limits on pesticide residues and hormone-disrupting chemicals in food, nutritional labelling, the use of genetically modified organisms, the export of animal byproducts including some specified risk material for BSE, food additives such as flavourings that the EU has banned because of concerns over safety, hygiene rules including chlorine treatments on poultry and other meats, and animal-rearing standards such as the use of growth-promoting chemicals in pork and hormones in beef production.

Plan A+ is most detailed on financial services after Brexit, where it suggests a wide range of deregulatory measures. Suddenly the agenda is not general at all, but very specific indeed. It reads like special pleading for particular bank, hedge fund and wealth manager interests. Proposals include reducing some of the capital requirements on banks, and lifting several controls on asset managers’ trading. The bank surcharge, which claws back some of the huge cost to the taxpayer of bailing out the sector after the 2007-08 financial crash, and was introduced to deter banks taking on riskier debt, should be cut. Controls on CFDs (contracts for difference – a form of algorithmic trading in which funds trade on the small fluctuations in asset prices without ever owning the assets) should be scrapped, as should some controls on short-selling, and caps on large fund trading volumes designed to prevent excessive swings in markets, especially in vital commodities. The EU directive on markets in financial instruments is described as burdensome to wealth managers because it requires extensive trade-tracking data to be provided to regulators. Although regulation is mostly inimical to free markets, the US will want stronger intellectual property rights regulation to encourage venture capital.

The lead author of Plan A+ is a former Washington lobbyist and trade lawyer, Shanker Singham. This is the second time his reports have fallen foul of the Charity Commission over overt political activity, which is not permitted when organisations claim charitable status. Another thinktank, the Legatum Institute, was instructed to remove a previous report he’d written in a similar vein from its website earlier this year.

Plan A+ followed on from the Ideal US-UK free trade agreement, a draft legislative agreement drawn up by the US-based Cato Institute and the new UK Initiative for Free Trade (which includes among its supporters Boris Johnson, Michael Gove and Liam Fox), as well as nine other rightwing thinktanks. The thinktanks, bar one, belong to the libertarian Atlas network, which describes itself as a partnership connecting free-market organisations around the world “to the ideas and resources needed to advance the cause of liberty”.

Their personnel overlap, as do their funders, in so far as they are known. Most are not revealed. They say their funding does not influence their thinking. But we know enough about their donors to see plutocratic and corporate interests at work. US billionaires’ trusts, big oil, big food, tobacco and tax havens are among those identified as givers by the Guardian.

This push for ultra-free trade looks like shock doctrine, the exploitation of a crisis to push through highly controversial policies while everyone is too distracted to fight them off. What unites these interests is an antipathy towards the EU’s ability to rein in their power. The target is the EU that signs up to climate agreements, is prepared to consider a financial transaction tax, is chasing down corporate tax dodgers, challenging monopoly control, and is a threat to tech giants, hedge funds, wealth managers and fossil fuel barons – especially in the US. In the UK, we have been so worried about Russian interference in our elections that we are in danger of missing the source of money nearer home.

This is not what people voted for, or even realised they were being asked to vote for in the referendum. But that’s the trouble with shadow political power structures. Their true shape and purpose stays hidden while they capture democracy.

 source: The Guardian