Open Democracy | 8 October 2019
Can an ‘open relationship’ work after a UK/EU divorce?
par Laura Bannister
Beyond Deal or No Deal lurks a ‘future relationship’, which is likely to contain a trade agreement. We should look now at what that means for our NHS, environment and rights.
As with all messy break-ups, the Brexit divorce process makes it hard to consider what comes next. The constant uncertainty obscures the fact that if Brexit happens the plan is in fact the same as ever: to establish a new relationship between the UK and EU using a free trade agreement (FTA).
While surely better than No Deal, this FTA could reach into areas of our lives we think of as distant from ‘trade’, like the way that NHS services are provided and the protection of our rights and environment.
If we get an extension and secure a Brexit deal, trade negotiations with the EU will begin in January. Even with no deal, both parties will want to quickly establish some basis for civil interaction, which could mean discussions start before the end of this year. We should therefore attempt to tear our eyes away from the on-again, off-again drama to look for a moment at what this deal could contain.
At least to Brexiters, an EU-UK trade deal looks like the best of both worlds, like some kind of ‘open relationship’ that holds onto our closeness while allowing us to flirt with exciting new trade partners.
Open relationships involve reframing the nature of the partnership. In the case of the UK and EU, reframing the partnership through a free trade deal risks cropping out the deeper social goals that form the backdrop of EU membership. Zooming in on the single objective of free trade raises three key problems.
The first problem is that trade deals create binding international law that prioritises trade over all other objectives such as climate justice and public health.
National regulations requiring companies to use local suppliers or reduce air pollution can be considered ‘barriers to trade’ as they can make it more complex or costly for overseas companies to do business. If governments or local councils impose these rules anyway they risk being hauled before trade courts. This can oblige them to change the rules, accept punitive tariffs on local producers, or even pay multi-million pound fines from public spending budgets. This puts huge pressure on governments to only make laws that multinational companies will accept.
This muddling of priorities already exists to some degree within the EU’s single market, but it is balanced out by strong EU laws on labour, environment and product standards, as well as the overarching social goals embedded in the EU’s founding treaties. A free trade deal lacks these counterbalancing forces, so the pressure to put trade first is likely to be stronger than if we remained within the EU.
Of course Brexit is never simple, and in the EU-UK case the outcome may be different than usual. The EU is keen to maintain a ‘level playing field’ so may be interested in re-writing the usual trade rules to ensure the UK can’t undercut European businesses by having lax standards. However, we need to keep a close eye on the proposed content of the deal to ensure that social and environmental goals are put first, and trade can be kept in its proper place.
The second problem is that there are specific problematic rules that are found in EU trade deals with other countries, which don’t exist in internal EU law. These rules pose major new risks, including the locking in of privatisation, the weakening of regulation, and the potential for corporate lawsuits against the public purse. The EU-Canada deal, of which a ‘plus plus plus’ version is proposed for the future EU-UK relationship, contains many of these worrying measures.
For example, ‘ratchet’ clauses mean that there is no going back once you privatise your public services. Anti-discrimination efforts could be impacted by a ban on transparency requirements for digital code, which could stop regulators from checking visa and benefits software. Free trade agreements can also establish a special court system called ISDS that can only be used by foreign investors and gives them a fast-track to sue governments overrule changes they dislike. This has been used to challenge important and popular policy changes like a fracking moratorium in Quebec, a tax on sugary drinks in Mexico and an increase to the minimum wage in Egypt.
It may seem surprising that the EU would accept these sort of deregulatory ‘free trade’ rules with countries outside the bloc, but not within it. The inconsistency may be the result of different priorities within relevant EU bodies, for instance the department for Trade (which drafts external deals) aims to maximise trade, whereas other Directorates that draft internal EU law have broader social and environmental goals in mind. Whatever the reason, it is very possible that these problematic free trade rules will be included in an EU-UK deal, unless we can mobilise strongly to demand a different kind of relationship.
The third problem with framing the relationship as an FTA is that the UK’s process for making trade deals is deeply undemocratic, so we could get little to no say over what is included and whether the deal is signed at all. Earlier this year the Trade Justice Movement and others won major amendments to the Trade Bill that would have given MPs the chance to debate and vote on trade deals. Sensing defeat, the government let the draft legislation go cold, and it eventually got killed off by the illegal prorogation of parliament. This is both ironic and shameful given that a major reason for leaving the EU was a wish for more democratic control.
These three problems - excessive free trade focus, the specific risky features of FTAs, and a serious lack of trade democracy - would be a poor basis for our new open relationship with the EU.
If remaining in the EU becomes truly out of the question, we must be ready to push the government towards a better kind of partnership that is structured around something deeper and more meaningful than just free trade.