In the post-Coronavirus world, the foreign policy and foreign trade decisions have become a matter of dilemma for many countries around the world. A cold war has broken out between China and the United States, and the Donald Trump-led US has left very few options for the world’s nations. The United States has now made it clear to the United Kingdom- ‘either you are with us or against us’ in this polarising world.
As per a report by The Guardian, a popular newspaper in the United Kingdom, in the ongoing talks of a free trade deal between UK and US, the US government has told the UK that the tiny island country has to make a choice.
America’s primary objection is to Huawei, the Chinese company which has been given a contract to roll out the UK’s 5G network infrastructure. The US government has alleged that Huawei was snooping on US military secrets and supplying it to the Chinese military and now Trump’s government is pushing every country to shut the door to the Chinese technology giant.
“The US government seems to want to use the pandemic to cut off China from the global economy to onshore manufacturing and redesign the global economy, to reprioritise around security while saying you can’t have China as part of the system because of how they behave,” said a UK finance official.
“Is this electioneering rhetoric? Or is it potentially much more dangerous, a desire to have a different global economy where China isn’t part of the system?” the official added.
The US-UK Free trade deal could be announced before the US Presidential election in November 2020, so that Trump could use it to set the economic agenda for elections. The Trump administration is using a clause called Article 30 previously used in the US-Canada-Mexico trade deal. The clause binds the signing countries to shun non-market economies like China.
Article 30 specifies that if one of the current North American Free Trade Agreement (NAFTA) partners signs a free trade deal with a “non-market” economy such as China, the other NAFTA partners can quit in six months and form their own bilateral trade pacts.
Once the UK signs the trade deal with Article 30, the USA would drive the UK’s foreign and trade policy away from China, and that is what British diplomats are worried about. “The proposed clause is based on Article 30 of the US-Mexico-Canada agreement that locks out non-market economies. Although the UK does not formally oppose such clauses, British diplomats are worried that in the current context it would give the USA extensive and unbalanced leverage over UK policy towards China,” reads the report by The Guardian.
Given the fact that the UK was among the first countries to deal with Huawei to roll out 5G, dumping contracts would practically end China-UK relations, and the US wants exactly that.
Through the deal, the US also wants to show the European Union that after Brexit, it is Washington not Brussels (European Union) that would set the agenda for the UK. EU is still willing to cooperate with China as it helped Beijing to get entry into the alternative appellate body for trade resolution within WTO, to which the US is not part of.
Britain’s Foreign minister Dominic Raab has already stated, “no more business as usual with China.” Moreover, members of Boris Johnson’s Conservative party have already demanded that the country needs to cancel the deal with Huawei and demand repatriation of 350 billion pounds from China for damaging the UK’s economy with the Coronavirus pandemic.
Given the “Special Relationship” UK enjoys with the United States which every President including Donald Trump affirms, it is no rocket science to predict which way the British government would go.
The two nations have very deep economic ties. The US is the largest trading partner of the United Kingdom with bilateral trade amounting to 261.9 billion dollars in 2018 or 10 percent of the UK’s GDP. Exports to the US were 140.4 billion dollars while imports were 121.5 billion dollars, resulting in a trade surplus of 19 billion dollars.
Also, UK is the single largest investor in the US with an investment of 540 billion dollars while the US’s total investment in the island country is 750 billion dollars, or 12 percent of its total FDI.
Historically, the UK and the US had been allies at least since American independence. Most influential families of the US trace their roots to the UK and the Northeastern part of the United States is also known as New England. Both countries have coordinated in almost every foreign policy matter historically, including in American wars in the middle east. Therefore, for the UK, making a choice should not be very tough.
