At first glance, the news of the start of a new round of bilateral negotiations between the United States and Great Britain on the transatlantic free trade agreement can only cause yawning. What can be interesting in changing the export conditions for pork pies or pallets for showers, even if customs duties on them are significantly reduced? And in such negotiations, this is a common thing - and although top officials rarely go into details, their teams have to deal with such small things.
Yet what the United Kingdom Secretary of State for Foreign Trade Elizabeth Trass and US Trade Representative Robert Lightheiser are doing now is not just a routine, boring, bureaucratic procedure. This is a serious application for reformatting relations between the centers of forces of the West, and perhaps even the first step towards a new world order.
Back in December last year, when Boris Johnson won the Tories triumphant victory in the early parliamentary elections in the United Kingdom, he had a remarkable telephone conversation with Donald Trump. The main topic of this conversation - if we leave out the congratulations on the victory - was the increase in the scale of trade between the USA and Great Britain. Both leaders discussed "the immense importance of relations between the United Kingdom and the United States and look forward to continuing close cooperation on issues such as security and trade, including negotiations on an ambitious free trade agreement."
Few people remembered at that moment that in early 2015, Boris Johnson, then mayor of London, published a book dedicated to the 50th anniversary of the death of the most famous of the prime ministers of the United Kingdom, Sir Winston Churchill. The book, in fact, was called “Churchill's Factor”. Among other things, in this book, Johnson argued for the need and benefit for the UK of the Transatlantic Trade and Investment Partnership between the US and the EU. Then this project was still alive and actively discussed, although it had many opponents, mainly liberals, leftists and anti-globalists. Johnson was indignant, they intimidate the gullible British inhabitant: they say, TTIP will open European markets for dangerous imports from the USA - genetically modified chickens with three legs, pale and tasteless cheese, huge, gallons of gas-eating cars with seats designed for large American backsides. To argue with these idiots (Johnson did not stand on ceremony) is useless, but it is necessary to explain to the good British that all these horror stories have nothing to do with reality. The new transatlantic free trade agreement is not a threat, but a sensational opportunity to break the remaining trade barriers with a country that already accounts for 17% of British exports.
In his book, Johnson scrupulously listed the advantages of free trade between the United States and Great Britain - the aerospace sector, where the British are traditionally strong - "many US airlines are updating their fleet with British planes," the auto industry, the production of luxury goods that will undoubtedly be in demand in the US, where households with average earnings exceeding $ 300,000 per year, make up a significant portion of the market. Of course, tariff barriers between the USA and Great Britain are not so high - below 3%.
However, besides them there are barriers to non-tariff, regulatory and other protectionist measures used to protect against foreign competition.
It is precisely these very measures that prevent the export of delicious British pork pies to the bottomless American market. The TTIP agreement, Johnson promised to his readers, would boost the UK economy by about £ 10 billion a year, and the economies of the entire European Union by £ 100 billion. "Not so much to give a damn about it - at least not that the moment when the eurozone is balancing over the edge of the abyss. "
In the five years that have passed since the publication of the book, much has changed. First, the TTIP agreement itself was torpedoed. How and why is a topic for a separate article, but in mid-2016, European politicians almost unanimously recognized that the agreement was “dead”, “buried” and in fact had no chance of implementation.
Secondly, in the same 2016, a Brexit referendum was held, in which supporters of Britain's exit from the EU won an unexpected victory, including Boris Johnson, who considered the EU to be shackles that prevented the United Kingdom from making a breakthrough into the bright future of the Transatlantic Trade Partnership. And cited in his book Winston Churchill, persistently repeating: "Never separate from the Americans!".
True, the brexit process dragged on for almost four years - thanks to the Brussels wise men who did not want to part with a fat British cow, and the "saboteur" Teresa May, who was engaged in leaving the EU, like a Victorian lady, in fulfilling her conjugal duty (motionless, tightly shutting her eyes and thinking about England). But as soon as May resigned, and Johnson took her place ...
At the meeting of the Big Seven in Biarritz (August 2019), Donald Trump amicably patted Johnson on the shoulder: “We are preparing a very big trade deal. “We have never had a very big, such a big deal with Britain!” Johnson responded with enthusiasm: “It will be an excellent agreement!” But then everything was limited to talk - the main issue at that moment was the deal between London and Brussels, and the opposition in parliament tied Johnson hand and foot.
The triumph of Boris Johnson in the extraordinary elections at the end of last year seems to have removed the last obstacles to the conclusion of a free trade agreement between the UK and the USA. But while both sides slowly warmed up, preparing for long negotiations, the coronavirus pandemic broke out.
Negotiations nevertheless began on Tuesday. In full accordance with the realities of the new world, they were held in the format of a video conference - the benefit of modern technology allows you to discuss any issues without personal presence. The first round of negotiations is designed for two weeks, but both the US and the UK have already announced that they intend to work at an accelerated pace to reach an agreement as soon as possible, which "will contribute to the long-term recovery of our economies, which is vital in the face of recovery from the COVID 19 damage. ”
And this damage can be enormous - according to the estimates of the independent Bureau of Budget Responsibility, if the lockdown lasts another 12 weeks, the losses will amount to 35% of the country's GDP, although this effect will be temporary.
To cope with the catastrophe, it is necessary to ensure free and wide access of the financial companies of the City of London to the US financial market, which will be one of the main goals of the agreement, which Truss and Lighthizer are going to agree on.
I must say that the draft bilateral agreement between Washington and London has no less opponents, or even more, than the rest of the US-EU TTIP project. They argue that no agreement with America can replace the UK benefits from unhindered access to the EU market - the second largest economy in the world with a population of half a billion people. Losses from Brexit will in any case be quite large - according to some estimates, up to 4% of GDP in the next ten years. And the abolition of tariffs on transatlantic trade with the United States, as Ms. Trass predicts, will increase the size of the UK economy by only 0.16% over the next 15 years. This is not an equivalent exchange.
But here you need to look at the situation as a whole. It is useful, for example, to ask a question: why was Brussels so opposed to the UK exit from the EU, which spent a lot of energy on intimidating the British with possible economic losses from Brexit?
Yes, because the damage that the European Union will inflict on Britain’s exit is incomparably greater than the losses of London. Of course, in the European Union and after the departure of Albion, 27 member countries will remain, but what are these countries? In addition to Germany and France, it is entirely subsidized states that do not crawl out of debt. The countries of Southern Europe - Portugal, Italy, Greece, Spain - are called the unofficial offensive abbreviation PIGS (similar to BRICS). Poland and Hungary are Brussels’s constant headache, it’s better not to recall Bulgaria and Romania at all ... The departure of the United Kingdom deprives the EU of a tenth of its population - now not more than half a billion people live in the EU, but 453 million people, and as much as 15% of GDP.
Brussels is trying not to talk about this, but Brexit has dealt the European Union, if not fatal, then a very painful blow, the consequences of which will be felt for a long time. And since there is no holy place in the present globalized world, the weakening of the EU will immediately be compensated by the strengthening of another player. And who this player is is actually the most interesting and important question.
It would seem that, logically, it should be just the United States. The conclusion of a bilateral agreement with Britain gives the States a chance to strengthen their influence in Europe, acting through a "junior partner." If Trump, any other of the presidents who have been sitting in the White House in recent decades, this would be so. But Trump is least of all disposed to scatter the resources of his country, strengthening globalization networks. Rather, he is ready to delegate part of the authority to solve problems to those leaders whom he considers to be America's true allies. In Europe, there is only one such leader - and this is British Prime Minister Boris Johnson.
Therefore, it is very likely that if a free trade agreement between the United States and the United Kingdom is concluded, this will lead not so much to increased Washington's influence in Europe.
And how much to the creation of a new, different from the classical Atlantic model of the union system of the two leading Anglo-Saxon powers. This union will be free from encumbrance in the form of a “continental bloc” of Germany and France - in full accordance with the gloomy prophecy of Angela Merkel, “from now on, Britain will become a competitor at our door” - that is, at the door of the European Union. Only Britain will not be alone, but in a company with a “senior partner,” which makes it, of course, an even more dangerous rival.
The exit from the EU and the conclusion of a bilateral agreement with the United States significantly strengthen the UK, transforming it from an important, but still not leading, EU state into the second pole of the London-Washington axis of the Anglo-Saxon. Also, of course, in the position of a junior partner. But perhaps this situation will not last forever.
The future of Great Britain in the new system of relations directly depends on the fate of the global financial system.
For many years, there has been talk that the current international dollar monetary and financial system is in deep crisis. “The United States has accumulated so many debts that the world will soon abandon the dollar,” such a statement was perceived in 2010 as a sensation, and now perceived as a banality, ”financial analyst and editor of Grant's Interest Rate Observer ironically remarked back in 2014. Jim Grant Recently, against the backdrop of the coronavirus pandemic, there are increasing demands to default on US debt to China, which can solve the country's external debt problem (more than $ 20 trillion), but can cause a global financial catastrophe. Although it is believed that the Federal Reserve can print "as much as you want," this is still not entirely true. The US Federal Reserve can indeed launch a printing press, but only so far are new US Treasury bonds in demand among investors. If Beijing believes in the reality of the American default, it will be forced to start a hasty sale of treasuries, and there will be so many bonds on the market that their value will instantly fall - relatively speaking, nobody will need them for nothing. And a working printing press that is not backed by securities will undermine the dollar’s position as a world reserve currency more reliable than any atomic bomb.
And here the world can come close to creating an alternative world currency, for example, the currency of the BRICS block. Given the amount of gold and foreign exchange reserves in the BRICS countries, this hypothetical currency has a chance to squeeze the dollar unsecured by gold on world markets.
This "revolution" threatens to end the centuries-old dominance of the financial oligarchy of the Anglo-Saxons. And this option does not suit either Wall Street or City.
But here, the heartfelt union of the USA and Great Britain, freed from the “shackles” of the EU, could prove to be most opportune. Especially since London has a viable project in its stash.
The project of the so-called pound sterling zone, which the British tried to implement after the Second World War. Then the “pound zone”, which united almost 1 billion of the world's population, was crippled by the rivalry lost by London in the financial sphere, the rivalry which was predetermined during Churchill’s negotiations with Roosevelt’s emissary Harry Hopkins at the beginning of the war. Then the United States agreed to provide assistance to Britain, but set a tough condition - Britain had to pay the United States all its debts in gold, which sharply reduced the United Kingdom's gold reserves. Therefore, although structural opportunities for the development of the pound zone remained, the UK did not have enough resources to withstand competition with the dollar.
But now that the United States itself is not in the most favorable position due to the pandemic and the increasingly deepening financial crisis, the idea of returning the status of the reserve currency to the British pound may come to court. Moreover, the possibilities for this remain today. Commonwealth, or the Commonwealth of Nations, unites 53 countries, in which about 30% of the world's population lives. However, three would have been enough - the United Kingdom, Australia and Canada. And if you recall that the above countries - plus the USA and New Zealand - are united in the purely Anglo-Saxon alliance of intelligence services “Five Eyes”, which are closely monitoring China, then the contours of the new post-pandemic world are beginning to emerge even more clearly.
And what about the fact that the first step towards this new world will be boring negotiations on the fate of pork pies?
The author’s point of view may not coincide with the position of the publisher.