Food & drink industry
No deal will mean so many compromises for Britain: Trump
will make sure of that
Concessions on food standards, data protection, taxes on
tech giants … EU membership was never like this
Sun 25 Aug 2019 07.00 BST Last modified on Sun 25 Aug 2019
07.02 BST
Plastic bottles of Coca-Cola at a supermarket
Extension of the sugar tax could see Coca-Cola
sue the UK government for damage to its profits. Photograph: Régis
Duvignau/Reuters
Britain’s abject weakness as a trading nation is on full
display in Biarritz at this weekend’s G7 summit. The warm embrace from Donald
Trump for his old friend Boris Johnson and the talk of favourable access to
American markets cannot disguise how ill-prepared the UK is for life outside
the European Union’s protective wall.
Like a medieval tribe piously leaving the citadel even as
its enemies are massing on the horizon, Britons are discovering that Brexit is
going to demand many more compromises than were ever forced on it by majority voting
inside the EU.
US demands that Britain accept its beef with added growth
hormone and its chlorine-washed chicken are well-known and unwelcome, but it is
what these products represent that is so crucial to the UK’s future. Once the
prime minister considers lowering more broadly the standards of UK agriculture
to the base level accepted by US consumers, all alignment with EU standards
will be broken.
Johnson’s chief adviser, Dominic Cummings, knows that his
efforts to eliminate the Northern Irish backstop depend on a continued
alignment with the EU on trade to get around the problem of goods being checked
at the border.
The Brexiter argument – one that will supposedly satisfy
Angela Merkel and Emmanuel Macron’s 30-day deadline – is that alignment with
the EU will allow frictionless trade until the technology needed to overcome
physical border controls is tested and satisfies Brussels.
Instead, Johnson is preparing to rush into Trump’s arms with
a trade deal that will, at least as far as the EU is concerned, usher in
sub-standard food. All UK food will then potentially fail the EU’s tests, and
the Irish government will be told by Brussels that it must institute border
checks.
The US president also wants to extract concessions on the
implementation of privacy rules and data flows. The US has a more liberal
approach to personal data than Britain, which operates under the EU’s more
stringent GDPR standard.
Macron’s proposed
taxes on digital companies will also become a dividing line. Trump opposes as
“foolishness” the French president’s 3% levy on the revenue from digital
services earned by firms with a turnover in France of more than €25m and €750m
worldwide.
Former chancellor
Philip Hammond last year announced a less onerous 2% tax on search engines,
social media platforms and online marketplaces with global turnovers in excess
of £500m. According to Washington, both these ideas unfairly punish
Google, Facebook and Amazon, and will be outlawed in any trade deal.
Disputes will be settled in a court of arbitration, where
major corporations maintain the right to sue governments that make unilateral
changes to the law that affect their profits. This is a mechanism tobacco
companies have used to extract compensation for laws restricting or banning
smoking.
Such a tactic is unlikely to be used against consumer
legislation in the UK (though an extension of the sugar tax could lead to a
claim by Coca-Cola and Pepsi), but Washington has long objected to the way the
NHS negotiates the price of medicines, and this system, which keeps down the
cost of drugs in the UK, could be the subject of a disputes claim.
Then there are the little clauses that can seem innocuous
and yet reveal just how low a country can be forced to stoop to secure a trade
deal with a more powerful partner.
Trump has insisted that all countries seeking a trade deal
agree to outlaw boycotts of Israeli goods. David Cameron’s administration
blocked public bodies from supporting boycotts of Israel, but it is a stretch
for the UK government to act against all boycotts.
Johnson may say he is concerned about animal welfare and
environmental standards, but so far this is just words. He needs to make clear
that EU standards are the baseline. They are not a preference to be cheaply bargained away.
Britain can
easily cope with no-deal Brexit, claims Boris Johnson
PM said EU leaders would be blamed for their ‘obduracy’ and
that UK could keep much of £39bn settlement
Heather Stewart and Julian Borger in Biarritz
Mon 26 Aug 2019 00.00 BST First published on Sun 25 Aug 2019
20.45 BST
Johnson made his debut on the international stage as prime
minister at the G7 summit in Biarritz. Photograph: Reuters
Britain could “easily cope” with a no-deal Brexit, which
would be the fault of EU leaders’ “obduracy”, Boris Johnson claimed at the
summit of G7 countries in France, as he continued to resist mounting pressure
to spell out his own plans for breaking the deadlock.
“I think we can get through this, this is a great, great
country, the UK, we can easily cope with a no-deal scenario,” Johnson insisted
in Biarritz, as he made his debut on the international stage as prime minister
with a series of bilateral meetings with world leaders including Donald Trump,
the EU council president, Donald Tusk, and the Indian prime minister, Narendra
Modi.
Johnson said preparations for no deal were being ramped up
to help secure an agreement, but also “so that if and when we are forced by the
obduracy by our European friends to come out on 31 October without a deal that
things are as smooth as they can possibly be”.
Johnson claimed food shortages – one of the risks outlined
in the leaked Operation Yellowhammer documents on no-deal planning – were
“highly unlikely”, and offered a “guarantee” that patients would be able to
access medicines unhindered.
The prime minister said that in the event of no deal the UK
would withhold much of the £39bn financial settlement agreed by Theresa May –
and insisted it was up to the EU27 to avert that eventuality.
“If we come out without an agreement it is certainly true
that the £39bn is no longer, strictly speaking, owed,” he said. “There will be
very substantial sums available to our country to spend on our priorities. It’s
not a threat. It’s a simple fact of reality.”
During the Conservative leadership campaign, Johnson
suggested the entire £39bn would be retained in the hope of using it as
leverage to win a better future trading relationship from the EU27. But Downing
Street appears to have conceded that legal obligations for past liabilities may
mean up to a quarter of it may still have to be paid.
Johnson is battling to keep alive the prospect of striking a
reworked exit deal with the EU27 in time for Britain to leave by the Halloween
deadline, which he has made it a “mission” of his government to meet.
But with just a week until MPs return to Westminster,
preparing to seize any opportunity to bind his hands, Johnson has so far
presented no detailed plan.
After Johnson met Tusk on the sidelines of the G7 summit on
Sunday, an EU official said, “nothing really happened”. “It was essentially
just a reconfirmation of of the views of both sides. There were no new
substantive elements from any side, and obviously not from the UK side,” the
official said.
“What we ideally would have been hoping for and looking for
are new ideas that unblock this situation,” the European official said. “So we
are waiting … We need input from their side.”
Meanwhile, it emerged this weekend that Downing Street has
sought legal advice from the attorney general, Geoffrey Cox, about the
possibility of shutting down parliament from September.
Asked about the issue on Sunday, a senior government
official said, “No 10 commissions legal advice on a whole range of issues, but
the PM is clear that he is not going to stop MPs debating Brexit”.
Johnson’s parliamentary opponents appear unable to present a
united front, however. The shadow trade secretary, Barry Gardiner, accused the
Liberal Democrat leader, Jo Swinson, of being “extremely petulant” on Sunday,
after she raised doubts about whether Jeremy Corbyn was the right person to
lead a caretaker government to prevent a no-deal Brexit.
Gardiner told Sky News that the Labour leader was offering a
“failsafe” way of achieving the Lib Dems’ Brexit aims, but he said Swinson had
concluded, “oh well, we are not going to cooperate if Jeremy Corbyn is going to
be the person who does it”.
Labour has suggested it could table a vote of no confidence
in Johnson’s government – but is unlikely to do so immediately after MPs return
from summer recess unless it is convinced Tory rebels are ready to back it.
Swinson has written to Corbyn, suggesting an agenda for the
meeting and warning that if he insists on leading the charge it could prevent
the plan succeeding.
“In the last week, many MPs who stand opposed to no deal, in
particular key Conservative MPs, have rejected your proposal to lead an
emergency government. Insisting you lead that emergency government will
therefore jeopardise the chances of a no confidence vote gaining enough support
to pass in the first place,” she wrote.
The former chancellor Philip Hammond revealed the extent of
the bad blood between Downing Street and Conservative moderates on Sunday, as
he wrote to the PM demanding an apology for briefings that suggested the
Yellowhammer leak came from former ministers.
Hammond said it had since emerged the document was dated to
August, and thus could not have been leaked by one of the moderates dispatched
to the backbenches in Johnson’s summer reshuffle.
A government official said Johnson would respond, “in due
course”.
On Sunday, Johnson claimed the Brexit mood music had
improved significantly over recent days; but it remained “touch and go” whether
a deal was achievable.
Throughout the summit in Biarritz, Johnson has sought to
stress the UK’s determination to remain internationalist – and to distance
itself from Trump’s White House on some questions.
At a dinner of G7 leaders on Saturday night, which sources
said was occasionally testy, Johnson sided with Germany, France and others
against the US president’s argument that Russia should be readmitted to the
group.
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