Labour have upended the election campaign by unveiling a 479-page document detailing exploratory talks between British and American officials setting out the ground for a US-UK trade deal that, they say, reveals that the Conservatives are, despite their denials, planning to sell off parts of the National Health Service to American companies.
Are they right? The Conservatives’ public line on this is that just because one side in a negotiation sets out what it wants doesn’t mean that they will get it. This is true. This document doesn’t prove that the Tories intend to sell off the NHS anymore than you can prove what I ate last night by publishing the menu at the restaurant I went to.
However, anyone who seriously looks at the two nations’ trade flows, economic interests and general behaviour in trade negotiations will rapidly conclude that, if you want a meaningful US-UK trade deal, the ability for American companies to bid for NHS contracts and British agricultural standards will both have to be on the table. If we take the Conservatives’ assurances at face value, what they are pledging to do at this election is sign up to a significant reduction in EU-UK trade: and to rule out many of the necessary components of maximising UK trade with countries outside the EU.
In the 21st-century, the biggest barriers to trade aren’t tariffs – charges levied on goods from other countries to encourage people to buy local – but non-tariff barriers. The simple illustration of this is the three-pin plug: the direct cost to me of buying an American Blu-Ray player as opposed to a British one might be identical, but I can’t plug a US device into a UK socket.
The biggest non-tariff barriers in US-UK trade are in the provision of British healthcare and food. If you want a meaningful level of market access into the US for British companies, you are going to have to give way on both of those to a significant degree. That Conservative ministers have repeatedly promised the NHS will not be part of US-UK trade talks and that standards for agri-food will remain unchanged does not alter that basic reality: they can keep those promises and have a very shallow US-UK trade agreement that will grant the UK essentially the same level of market access it has now, while, let’s not forget, having deliberately chosen a worse standard of access to the European market than the one we presently enjoy soley in order to get better trade deals with elsewhere. Or they can break those promises and get a meaningful US-UK trade deal.
Which will it be? No-one can tell you for sure. Even the Conservative high command is divided. One senior figure recently assured me that a US-UK trade deal would happen because after the election, they will have a majority and no-one will care. Another glumly said that they thought these promises would, in practice, endure, and that the eventual US-UK trade deal would be wafer-thin, with its biggest UK “win” likely to be an NFL franchise here in the UK.
My view has long been that in practice, there will never be a meaningful US-UK trade deal, because, just as Tony Blair’s Labour government had to retreat over genetically modified food and the euro despite having a landslide parliamentary majority because they couldn’t overcome public resistance to both ideas, the politics will never be anything other than fraught, given that most British voters hear “American companies” and “NHS” and think that means a US-style healthcare model where people go bankrupt when they get ill, and they hear “American food standards” and they think it means a worse standard of food safety than the one we have now.
I don’t think it’s particularly useful or enlightening to point out that Johnson broke his promise about putting a customs and regulatory border in the Irish Sea, because that broken promise didn’t involve annoying any voters that Johnson himself has to care about. The Prime Minister’s political career is littered with broken promises, but when he breaks promises, he has done so towards rather than away from public opinion. That could change, of course, but I don’t think it is especially likely.
But that’s a secondary issue. The choice before the UK if it decides to give Boris Johnson the majority he craves to “get Brexit done” is either a radical reshaping of our economy in order to take advantage of the freedom to strike trade deals, which would involve US participation in the NHS, or, more likely in my view, it is a long-term and permanent reduction in our economic performance because the political costs of the radical approach will always be too high for any government to stomach.
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