Wasn’t it one of the 'Remain' campaign’s big arguments that leaving the EU would deprive us of the ‘clout’ we enjoy in negotiating foreign trade agreements? I seem to remember someone even warning us that in the event of Brexit we would go ‘to the back of the queue’ for a trade agreement with the US. So much for being at the front of the queue. Today, the French minister for foreign trade, Matthias Fekl, demanded an end to talks with the US over the Transatlantic Trade and Investment Partnership (TTIP). It comes hot on the heels of claim yesterday by German deputy Chancellor Sigmar Gabriel that TTIP has failed.
Yet again, the EU has proved hopeless in negotiating a trade deal with a major economy. Why is it that non-EU Switzerland can manage to negotiate deals with China and Japan but the EU has failed to do so? Clout is one thing; direction of purpose quite another. Switzerland succeeded in those deals because it concentrated on areas where Swiss exporters are especially strong. When the EU sets out to do such deals it has to balance the demands of 28 competing countries, each trying to swing negotiations to the advantage of their own exporters.
With the TTIP, the EU and US set out trying to construct a slightly watered down version of the single market – in which corporations would be able to use the courts to force governments to open up their public services to foreign providers. It was doomed to collapse because there is such an obvious asymmetry between the US and the EU on this. The US already has high involvement of private companies in the provision of public services. As for those where the state does still retain a monopoly – like defence – there is no way US courts are going to allow, say, French missile manufacturers to supply weapons. It will be ruled out on grounds of national security.
Europe, by contrast, has a relatively high degree of state involvement in the economy, giving plenty of juicy opportunities for US firms – and plenty of reason for left wing parties in France and Germany to oppose TTIP. Britain may now be at the back of Barack Obama’s queue – though what relevance that has given that it will soon be where we stand in Hilary Clinton’s or Donald Trump’s queue that matters. But my money would be on post-Brexit Britain sewing up a trade deal with the US before the EU has managed it.