In uncertain times, allies must stick together.
“It is not given to us to peer into the mysteries of the future. Still I avow my hope and faith, sure and inviolate, that in the days to come the British and American peoples will, for their own safety, and for the good of all, walk together in majesty, in justice, and in peace.”
— Winston Churchill in a speech to the U.S. Congress, December 26, 1941
A week on from the historic Brexit vote in the United Kingdom, it’s worth asking what the United States should do in response to our country’s closest ally’s voting itself out of the European Union.
CNN’s David Wheeler, tongue firmly planted in cheek, has proposed a “Brentrance” — the admission of the United Kingdom into our union as the 51st state. While that is a bridge too far, the case for a U.S.–U.K. free-trade agreement is strong. A trade pact would lend geopolitical stability and support to our British friends and strengthen our respective economic systems, without the dire consequences of which many labor and environmental activists always warn.
Indeed, House speaker Paul Ryan, Arkansas senator Tom Cotton, and Utah senator Mike Lee have all advocated a trade agreement between the two allies in the days following the June 23 vote. Ryan told a Wisconsin TV station that the United States “should begin discussions with Great Britain . . . so that we do have a smooth trade relationship with Great Britain, because they are our indispensable ally.” Lee has gone as far as introducing a bill in the Senate that calls for U.S. trade representatives to begin negotiations toward a bilateral deal “as soon as possible.”
Our current president’s sanctimonious and patronizing pre-vote threat/warning that Britain would be sent to the “back of the queue” notwithstanding, we should move as quickly as possible to hammer out a free-trade agreement with the United Kingdom — above all for geopolitical reasons. Former secretary of state Henry Kissinger, writing in the Wall Street Journal, rapped President Obama across the knuckles this week for his threat, arguing that it “reversed the historical sequence” of a “special relationship” “founded in the origins of America, in a common language and in a comparable system of political values reinforced by fighting together in common wars.”
The idea of the special relationship was enunciated by Winston Churchill not as a refutation of a multilateral world, but as the guarantor of its values in the hard times sure to follow World War II . . . That special relationship is needed for the Atlantic world to traverse the present crisis.
Churchill, an unapologetically enthusiastic free-trader and Atlanticist, would have emphatically agreed. William Manchester, in the first volume of his seminal biography, The Last Lion, maintained that Churchill’s “ultimate goal was the ‘broad, sunlit uplands’ of a time when all swords became plowshares.”
He had faith in eventual peace, and he believed he knew how it could be achieved: by combining the might of the English-speaking peoples in so strong a defense of the United States and the Commonwealth that the rest of the world would be held at bay, as it had been by the British Empire in the relatively quiescent nineteenth century. Then, from that absolute base, freedom would expand outward.
Churchill never wavered in his belief that the British and American peoples could maintain the peace if they worked together. “To Churchill,” Manchester writes, “the ‘Great Republic,’ as he called it, was the key.”
Of course, the United Kingdom and the United States are already heavily integrated from a national-defense perspective — we’ve been through two world wars, a cold war, conflicts in Korea, the Middle East, and Afghanistan, and a decades-long intelligence-sharing arrangement together as NATO allies. But that is no reason for the United States to pass on what is an easy opportunity to aid our friends during a period of uncertainty.
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“Politically, it’s a good deal — for the diplomatic and foreign-policy reasons, it makes a good amount of sense,” says Scott Lincicome, an adjunct scholar at the Cato Institute. “And there would be economic [benefits, as well]. If the U.K. is going through a turbulent economic time, it’s always good for a key ally to stick its hand out and help them weather the storm.”
#share#That said, the purely economic effects, while still positive, would be relatively small. Britain and America are both advanced, highly developed industrial economies with highly educated and skilled workforces. The comparative-advantage benefits — whereby two nations piggyback on each other’s efficiencies by specializing in certain economic activities and then engaging in trade — would be marginal.
“Ideally — and this is leaving the politicians out of it — a trade agreement [should be] between two countries with different levels of economic development,” Lincicome says. “Now, you still will get benefits [from a U.S.-U.K. free-trade deal], particularly on regulatory cooperation and regulation reciprocity, where we don’t adopt their regulations and they don’t adopt ours, but we basically say, ‘Any goods and services that have been approved by your national regulator will be approved in our country.’”
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While that might not result in a massive boost to each country’s GDP, the streamlining of regulations and the easing of obstacles to trade would, over time, increase the volume of goods and services exchanged.
Lincicome cautions that there are two significant non-economic hurdles to a bilateral U.S.–U.K. trade pact. One is legal: Until the U.K. formally withdraws from the European Union, the British do not have the authority to negotiate trade agreements unless they choose to violate their treaty commitments to the EU. The other is practical: The U.K. government does not currently have any trade negotiators in its employ, as that role had previously been outsourced to the European Commission. Naturally, those obstacles are not insurmountable: A sovereign parliament in Westminster can, in the end, do as it pleases, and trade negotiators can be hired.
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Intriguingly, a free-trade deal between the United Kingdom and the United States would blunt the force of the standard arguments against most of our free-trade agreements: the labor and environmental concerns. For those worried about the loss of jobs and factories to low-wage nations such as Mexico, Britain’s high wages and skilled workforce would seem to pose a lesser threat to American rust-belt jobs. And those concerned with opening up trade with countries that abuse the environment have little to worry about when it comes to the British — if anything, the U.K.’s environmental regulations are more stringent than our own.
#related#Happily, bilateral trade pacts are the easiest and simplest to achieve, because they involve the fewest possible number of parties. Similar trade agreements have been concluded in a year’s time — granting that the political will was there to push the idea over the finish line. As it stands, the moment is ripe for talks to begin between the two English-speaking powers: Especially in light of the fact that a British exit from the EU makes the proposed U.S.–EU trans-Atlantic trade pact less likely — the free-trade sensibilities of the British no longer acting as a counterweight to the more protectionist instincts of the French and the Italians.
“In a normal presidential election,” Lincicome says, “the GOP candidate would be out promising a free-trade deal between the U.S. and U.K.” Here’s hoping that Paul Ryan and Mike Lee can talk some sense into President Obama on this issue, or, if he remains recalcitrant, into Hillary Clinton or Donald Trump. Churchill’s “broad, sunlit uplands” await.