Sunday, 23 July 2017

The Sharks Smell Blood

Over the last few weeks we've heard a lot about the different countries that want to do trade deals with Britain. The Brexiteers that trumpet this attention don't seem to realise that it is the equivalent of sharks having smelled blood in the water, or buzzards circling over a wounded animal.

The Brexiteers, and unfortunately also the Labour leadership think that Britain can simply put its demands to the EU, and apart from some small fudge here or there, the EU will agree. The policy of hard Brexit has gone off the front burner for now, as a result of the General Election result, though given the government's support from the DUP, and the strength of the ultra-nationalist elements on the Tory back benches, and from elements like Gove, I still would not rule out the possibility of the government walking out of the talks before this year is out. However, that simply puts in stark relief the totally unsustainable nature of the stance of “have cake and eat it” that the soft Brexiteers, including the Labour front bench are now left trying to uphold. It is typical British exceptionalism, born of the quaint notion that Britain is still some 20th century, imperial and global power that can negotiate on preferential terms with the rest of the world.

There is absolutely no reason why the EU would grant Britain the same rights and benefits of being in the single market and customs union, whilst not actually being members of those structures. There is every reason why they will not do that. No organisation that wants to stay in existence gives equal or preferential treatment to non-members as opposed to members. It is typical British arrogance to think that the EU will make an exception to that for Britain. They won't, and its deluding the British people to pretend they will. Even the kind of options that Norway has in relation to the EU, are not tenable as far as Britain is concerned, because Britain is a much larger economy than Norway. As the EU negotiators said at the start, the real options after all the initial talking has gone on will come down to Hard Brexit or No Brexit. Hard Brexit will be a disaster for Britain, and it is up to socialists to say so, and to tell the truth to British workers on that account, and to start making the case as to why Brexit should be dropped.

Labour is being tied in knots trying to cope with all of the irreconcilable contradictions in its stance. It just makes Labour spokespeople look like the Tories second 11, as well as making them appear indecisive, if not dissembling in the inevitably confused answers they give to media questions. If they persist with this stance, Labour risks throwing away a large portion of the support it has won over the last year or so.

But, the same arrogance and cognitive dissonance can be seen in relation to the Brexiteers, and their spokespeople like Liam Fox. They portray the advances of Donald Trump, or of Modi and others as being evidence of the fact that Britain still has it, and the world still wants it. Well they would be better advised to think about it in terms of Trump seeing just yet another pussy to grab. The only reason that Trump would want to do a deal with Britain, is because outside the EU, Britain is weak. The US will be able to dictate terms to Britain on trade in a way they could never do with the EU, the economy of which is larger than that of the US. In fact, that is what characterises imperialism. Even a fairly large national economy, such as Britain, might obtain nominal political independence outside the EU, but only at the expense of losing real sovereignty. In the age of imperialism, it is impossible for any nation to exercise absolute sovereignty, because political independence does not provide, and indeed undermines economic sovereignty.

When it comes to taxes, and a whole range of other issues, Britain will find itself even more at the mercy of large multinational corporations able to blackmail it into providing subsidies, lower tax rates and preferential treatment, and so on, on pain of simply moving their investment and business elsewhere. That is already happening, ahead of Brexit in relation to the big transnational banks. And, to the extent that Britain seeks to align with others in challenging the power of those multinationals, it will find itself doing so on the terms of these other larger organisations, without having any seat at the table itself.

And the same applies to all of those other countries that have given notice of their willingness to do trade deals with the UK. British politicians still think that this is the age of the Empire, and that they can pick up where it left off in terms of trading with India, Australia and so on. In 1800, India still accounted for 25% of global textile production. Britain, in breaking up the old village communes, which were the basis of its Asiatic Mode of Production, also undermined that production. At the same time, Britain imposed swingeing import duties on Indian textiles, so as to protect the rapidly developing capitalist textile production in Britain.

On that basis, Britain supplanted India as the world's leading producer of textiles, whilst India was thrown back on to producing cotton. Even then Britain obtained most of its cotton from the United States, only resorting to the lower quality Indian cotton, when the US Civil War, prevented supplies coming to Britain. Britain could dictate terms to India, just as it did to other parts of the Empire, and could organise production of primary products within them to meet its domestic needs, as well as using them as protected markets for its manufactured goods, thereby keeping out the manufactured products of its competitors such as Germany, France, and the United States. But, those days are long gone. Even after WWII, that world was broken up.

Britain is no longer a major manufacturing centre. That title now goes to China. Australia has enjoyed a 25 year long boom, largely on the basis of being a major supplier of primary products to China. China can absorb all of the minerals, all of the meat, and all of the wool that Australia produces. There are significant advantages for a country like Australia being able to trade on such a large scale with a single country like China, which is why it can do so on better terms than if it were selling its output to a relatively small country like Britain. Similarly, Australia has opened up its own trade with the United States across the Pacific Ocean, as well as with Japan.

Canada's main trading relation now is with the US, and it is likely to be followed by its trade with the EU, not Britain. India too has become a regional economic power. It may indeed want to do trade deals with Britain, but they will likewise be deals based on its interests and its terms, not those of Britain. None of these countries will be looking to do deals with Britain that in any way favour Britain, or replace what it will lose in terms of trade with the EU, and that will be even more the case as Britain's significance in the world continues to diminish.

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