WeeklyWorker

22.10.2020
Was banking on Trump

Gambling on chlorinated chicken

Boris Johnson seems to be playing a high-risk game of poker with the EU. Eddie Ford looks at the latest Brexit developments

There is no doubt that the economic downturn caused by the Covid-19 pandemic is one of the most devastating in capitalist history. It has to be compared to the great depression of the 1930s and the South Sea Bubble crisis that peaked in 1720 - the reasonable expectation being that the downturn will last for a considerable period of time.

For instance, in August the UK economy plunged into the deepest recession since records began in 1955, with GDP falling in the second quarter by 20.4% compared with the previous three months - the worst of any G7 nation in the three months to June and even before the onset of a perilous second wave of the virus. Then last week, hyperbole or not, many industry bosses were predicting that 200,000 jobs in the hospitality sector would be lost by the weekend due to London coming under a ‘tier 2’ lockdown - doubtlessly we will find out soon. Other sectors of the economy are being hammered, with only worse to come, due to increasing restrictions and lockdowns - whether regional or national.

On top of that, compounding the misery, the government seems prepared to go for a hard Brexit. The Boris Johnson deadline of October 15 to strike a deal with the European Union came and went, leaving nobody sure whether the talks were off or not. Was the British government about to “move on” and go for the so-called ‘Australian solution’ - apparently based on the “simple principles” of global free trade under World Trade Organisation terms? Then, adding to the confusion, Michael Gove sent out contradictory messages on October 19. He declared that the talks had “effectively ended” - only to praise the EU a few minutes later for making a “constructive move”, after Michel Barnier appeared to agree to all the British government’s demands for the resumption of negotiations - mainly the offer to “intensify” the talks, based on legal texts.

But despite Gove’s finishing remarks about needing to “work on the basis of the proposed intensification”, not long after he had left the chamber a No10 spokesman said the government “continues to believe there is no basis to resume talks unless there is a fundamental change of approach from the EU”. That is, an approach “consistent with trying to find an agreement between sovereign equals” and “with acceptance that movement needs to come from the EU side as well as the UK”.

This response caused bemusement in Brussels. Both Angela Merkel and Emmanuel Macron had said last week that they were “willing to compromise” on the most contentious issues of domestic subsidy control (state aid) and EU access to British fishing waters - the latter issue perhaps involving some sort of ‘transitional’ or temporary arrangement. Furthermore, only hours before Gove had pronounced the talks effectively over, there had been a “constructive” meeting between him and the European commission vice-president, Maroš Šefčovič, at the joint committee charged with implementing January’s withdrawal agreement. Šefčovič welcomed the “clear political steer” and “commitment” given by Michael Gove to resolving key areas of disagreement, saying the meeting “demonstrated the political will to move at pace on both sides” - though he did warn that “much work remains to be done by the UK” in relation to the Northern Ireland protocol.

According to one EU insider, the seeming progress at the joint committee meeting represented “a turning point”, coming just weeks after the UK threatened to sabotage the process with the UK Internal Market Bill’s powers to “disapply” many of the main provisions in the withdrawal agreement - technically breaching international law. Both sides agreed a number of issues, including access to EU databases and IT systems, for the UK to implement the protocol. The Irish broadcaster RTÉ also reported that the EU had asked to have 15 border officials present in Northern Ireland to ensure EU rules are maintained in relation to customs and veterinary checks. Everything looked on track, more or less.

However, the Downing Street knockback means the Brexit stand-off continues, with just four weeks left in which worthwhile negotiations may be conducted in pursuit of a comprehensive trade deal before the parliamentary ratification process will need to begin. An extremely daunting timetable - maybe near impossible. As things stand now, with state aid being the stumbling block, we have the strange spectacle of what appears on the surface to be a Tory prime minister prepared to blow up a free trade deal in order to defend the right to prop up businesses with subsidies. Otherwise Brexit would not mean Brexit.

Finally beginning to get impatient, Paris on October 21 said there will be “no new approach” coming from the EU - it is up to Britain “to tell us now, beyond tactics, if they want to continue negotiating”. Similarly, the EU Council president, Charles Michel, warned “time is very short” - it is up to the UK to decide whether talks should resume.

Even if a barebones ‘thin’ EU deal is scraped together at the last minute, this will act as “dead weight” on Britain’s ability to trade - at least according to the former boss of the Brexit department, Philip Rycroft. He points out that, while a deal is certainly better than no deal, it is worth remembering that “all of the panoply of a border applies if we get the deal” - customs declarations, security declarations, regulatory checks, rules of origin, compliance, etc. Either way, says Rycroft, the Brexit negotiators are essentially hammering out “the extent of new barriers to trade” - trying to cope with a massive and very expensive logistical challenge.

If we do end with an “Australian-type” future for the UK, rather than the glories of Canada, that will be a euphemism for the total failure of Boris Johnson and his government - not sun-kissed beaches and barbecues on Bondi beach. What happened to the “oven‑ready” deal promised by the prime minister? Colleagues of Michael Gove report that, in reality, he has become steadily more alarmed about how badly Britain will suffer in the event of a hard Brexit. Beef and lamb farmers would face tariffs of 40% to 100%, which would obviously put many out of business. The same essentially goes for dairy products - especially cheese.1 Car manufacturers would find themselves having to pay export duties of 10%, which would make the viability of some of their factories highly doubtful.

The government’s own “reasonable worst-case scenario” suggests that up to 70% of lorries travelling to the EU might not be ready for new customs checks, and the flow rate across the Channel via Dover and the Eurotunnel could be cut by up to 80%, as drivers will now have to negotiate the new ‘Brexit border’ in Kent - ie, make sure they have an access permit if they want to continue their journey. Gove had previously warned that queues of up to 7,000 trucks could form in Kent unless businesses “do more to prepare”. Unfortunately, it seems likely that huge waves of disruption could engulf vital commerce in mid-winter - a season when Britain is particularly dependent on food imports from the continent.

There are also widely shared stories that Michael Gove recently made a formal submission to the treasury, detailing how much additional money would be required to try to mitigate the immediate impact of a hard Brexit. The number of large new expenses is almost incalculable, ranging from managing the colossal traffic jams to laying on emergency air transport to try to ensure that supplies of life-critical drugs could still get into Britain. The sum apparently asked for by Gove has been described as “eye-watering”.

Unravelling

Now, all this might be clever poker tactics by Boris Johnson and his government - not to mention the devilish genius of Dominic Cummings. But with poker it is not just about the cards you hold, but how many chips you have in front on you - how much can you afford to lose? If so, Johnson is playing a highly risky game. It is certainly the case that the EU does not want to lose Britain in terms of a trade deal. Nevertheless, that would be manageable, not a disaster. But you cannot say the same for Britain - it would be far harder hit than the EU by the impact of a hard Brexit, whatever idiocy you may read in the Daily Mail. Therefore, in that sense, it is all up to Britain - make your move. The suspicion is that Johnson’s bluff will soon be called.

However, having said that, the country that will suffer the most from a hard Brexit is the Irish Republic - which is well aware of that fact. Maybe the EU will bail out Eire if the worst comes to the worst, but you would be forgiven for being sceptical, looking at the treatment Brussels meted out to Greece for its ‘profligate borrowing’, ‘fiscal irresponsibility’, and so on. Austerity on stilts. Ireland, of course, has been busy selling its soul to transnational corporations on the basis of its cheap tax regime, and hence is in an extraordinarily vulnerable position when it comes to being bossed about by the EU. Ireland may not be a British neo-colony any more, but it is definitely a neo-colony of the EU - fundamentally meaning France and Germany.

Clearly, there are number of different factors behind Brexit - particularly if it turns out to be a crash-out exit. You could say that it is down to Boris Johnson’s sheer determination to become prime minister no matter what, which obviously has some truth. The new biography of Johnson by Tom Bower portrays him as a chaotic personality and compulsively wild gambler who seems to enjoy dancing with danger. Bower quotes him as once saying: “There comes a point where you’ve got to put the dynamite under your own tram tracks … derail yourself. See what happens.”2

There is also the background of the decline of British imperialism, the turn to finance capital, deindustrialisation, absolute resolve to break the power of the trade unions, and the continuation by Tony Blair of the regime and policies put in place by Margaret Thatcher. Hence, ironically, the so-called ‘red wall’ constituencies turning in significant numbers to Boris Johnson on the basis of getting Brexit done, two fingers up to the metropolitan establishment and putting a bit of the ‘great’ back in Great Britain - plus some extra cash as a reward for voting Tory.

Sure, it is an illogical perspective - which does not mean that the EU should be viewed as a progressive force or a beacon of civilisation, as the more stupid campaigners for a second referendum would have had us believe. Both Brussels and London represent forms of capitalist rule, when what we need is independent working class politics. But, if there is some sort of underlying rationale for a hard Brexit, it is to be found in the shape of Donald J Trump and the project of ‘making America great again’ by basically reversing US decline, reshoring industry to the US, decoupling from China, and all the rest of it. Of course, none of this can be done in any total sense. Nonetheless, under those circumstances, Britain distancing itself from the EU and repositioning diplomatically and strategically towards the US starts to make a certain sense. Johnson would be going with the new normal.

If Trump remains president after November 3, there you are - bingo. Boris Johnson gets his trade deal with the US and Britain then perhaps has a relatively privileged position in relation to other countries in the dog-eat-dog world pecking order. Maybe that involves opening up the national health service to American companies, and perhaps chlorinated chicken and hormone-treated beef - a price worth paying no doubt, if you are not too fussy. But, from where we sit at the moment, the plan seems to be unravelling, with opinion polls showing a clear lead for Joe Biden and perhaps the Democrats securing both houses of congress.

Boris Johnson may well live to regret his gamble.

eddie.ford@weeklyworker.co.uk


  1. ahdb.org.uk/eu-and-uk-import-tariff-rates-for-selected-dairy-products↩︎

  2. T Bower Boris Johnson, the gambler London 2020.↩︎