After seven weeks down under, I return to find the Brexit scene decisively altered. This is not so much by the Supreme Court’s judgement, always expected, less hurtful than it might have been and readily overcome given the parliamentary climate. The pivotal development is May’s trip to Washington this Friday, as the first overseas Head of Government to meet President Trump. This establishes that the stumbles immediately after his election have been overcome and attests to the mutual interest of both sides in constructive dealings.
So what should May say to him? Is she simply trying to cement a personal relationship, or should she get into specifics? This has only to be asked to be answered: any relationship is built upon specifics. In this instance, both sides will also want a concluding press-conference which puts flesh on the bones.
So let’s ask ourselves, what do the two sides want? At this early point, Trump is demonstrating credibility by signing executive orders which do what he promised (parenthetically, not the least by complying with the news values of his antagonists). He’s still keen on differentiating himself from Obama, but the fact of May’s visit achieves that. Friendship with Britain also plays well with many of his core voters - constitutionally well-disposed to this country - but May will do well not to rely on sentiment alone. In the medium-term, the success of Trump’s presidency will turn on his central economic promise: jobs for American workers. As to foreign policy, he will be less interested in giving signals of reliability to fractious allies than in pressing his foreign policy agenda: bilateralism in trade negotiations, burden-sharing in defence, and the defeat of Islamism.
In principle, this poses few challenges for May, bearing in mind her fundamental objectives with the new man: a clear commitment to NATO and trading alternatives to the EU. The former should be fine, though we may have to goose up our expenditure on the military and suchlike (eg, GCHQ) to show willing. Trade is more problematic. May’s dilemma is that Trump is raising the stakes with his proposals for border taxes and the American way with trade talks is not encouraging: their negotiators take a notoriously tough line, animated by private sector cues. This means that May needs to prevail upon Trump to break the mould in some way, but without challenging his commitment to American jobs. To turn to one or two specifics:
- The two countries don’t export much by way of consumer goods or food to each other, so this ought to be upside all round. Of course we’re bonkers about GM crops and the Americans might not welcome cheap cars from Nissan, but would these be deal-breakers?
- As to capital goods, both sides are already well ensconced with their customers. The civil business of our biggest exporter, B.Ae, is entangled in the Airbus joint venture and its European military business similarly in EADS. Rejigging any of this this would threaten jobs at Boeing and elsewhere, unless B.Ae also brought along new customers. This would be extremely disruptive, as the joint ventures are central to European - in particular French - industrial policy and underpinned by Government to Government agreements.
- As to services, the two countries are more or less on the same page about IPRs. The Americans have much larger private sectors in healthcare, tertiary education and broadcasting but it is hard to imagine more politically sensitive topics here. May is fortunate that Trump is in a position to ignore any clamour for access as unrelated to US jobs.
- Finance poses few problems. Each country is already the largest FDI and portfolio investor in the other. The commitment of US investment banks to London is up in the air: May could ask Trump to lean on them to stay their plans to lighten their City footprint. He has shown that he’s willing to bully the private sector so you never know.
- Finally, when negotiating TTIP and TATP, the US raised hackles by pressing for the private sector to be able to sue for access. If still the thing, the topic lends itself to compromise, as to transition periods, adjudicatory body and so on.
More generally, Trump could press May to sign up to his bilateral agenda. At this point, we’ve got nothing to lose, so there may be text to that effect. Net, net, May has something to offer, Trump has no reason to mess her up, so we should expect a positive closing communiqué. Will there, however, be a timetable (other than the well-signalled State Visit)? May will be bearing in mind that Trump’s piston could have a short shelf-life. After all those executive orders, he’s going to need support from Congress and the government machine. I’d be looking for serious blow-back from those whose interests are hurt or who are determined to be offended by him personally. It’s always possible that his opponents will be cowed as his policies begin to speak for themselves, but Trump could equally become another lame-duck á la Obama in short order. So May had best push things along.