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TThis month, thirty years ago, there were crucial trade talks in Brussels. After four years of discussions, attempts to secure a new global agreement were not going well. Inside the negotiating room, the US and EU teams were at odds. Outside, on the streets of the Belgian capital, farmers rioted over proposed cuts in farm subsidies.
As the deadline for the first editions of UK newspapers approached, the press room was graced with the arrival of the man from the Daily Telegraph on site: a young Boris Johnson. The newspaper’s news desk had belatedly warned that there was a story in these collapsing business conversations and had told Johnson to find out what it was all about.
The future prime minister of Great Britain did what any other journalist would do under the circumstances: he activated the charm and asked his fellow pirates to tell. By heart, he wasn’t overly concerned with the nitty-gritty, he just wanted the big picture. .
That was smart. In general, people find the details of business negotiations boring and often incomprehensible. There will be those who will read and understand all the clauses of the agreement signed last week by the UK and the EU, but there will be as few as those who have turned page 5 of A Brief History of Stephen Hawking’s Time.
As such, it is reasonable to assume that for most voters the details of the London-Brussels deal will become muddled fairly quickly. They will remember that it had something to do with the fish, but they will need to do a Google search to find out exactly what it was. The big picture will matter; the fine print will not.
Those on the left who have been urging Sir Keir Starmer to vote against the UK-EU deal would do well to take this into account. It is said that Labor must ensure that Johnson has to “own” the deal, so that when its “disastrous” consequences become apparent, the prime minister will suffer the political consequences.
This is an illusion for several reasons. There is no evidence that the UK’s trade performance has any political relevance, despite the fact that this country has been running a huge deficit in manufactured goods every year since the early 1980s.
Furthermore, what matters for a nation’s business performance is the quality of the goods and services it provides, rather than the trade agreements it negotiates. The EU single market is much more advanced for goods than it is for services, but that hasn’t stopped the UK from running a sizeable surplus in trade in services. Why? Because since it joined what was then the European Economic Community in 1973, the structure of the UK economy has changed. Manufacturing has emptied, but the service sector has grown and become very competitive internationally.
A potted history of three decades is something like this. The Brussels trade talks took place less than a month after Margaret Thatcher was ousted as prime minister and two months after the UK joined the European exchange rate mechanism. At a time when communism was collapsing, plans were brewing for a European monetary union and a new single currency.
In the 1990s, Britain left the ERM on Black Wednesday, the single currency became a reality, and we saw the arrival of a fully turbocharged globalization. It became axiomatic, for both left and right parties, that there was little that could be done (or should be done) to meddle with market forces. People, goods and money should be able to move freely in the world. Nation states were considered redundant and the focus of policy changed. There was no longer any real debate on economics; instead, radicalism was increasingly challenged towards cultural change.
In the 2000s, the traditional Labor coalition began to crumble. The university graduates and public sector clerks who came to dominate the party more and more embraced the mix of economic and social liberalism. The workers’ wing of the party, which tended to favor economic activism and social conservatism, did not. A particular cause of friction was the sharp increase in net migration after Eastern European countries joined the EU in 2004.
Little by little, Great Britain became two countries. Half did well in globalization; the other half did not. Half liked the idea of unrestricted free movement of capital and people; the other half did not. Half were largely satisfied with the status quo; the other half was not.
To make matters worse, when the unhappy tried to voice their concerns, they were either ignored or told to shut up. The EU referendum in June 2016 gave them the opportunity to be heard and they took advantage of it. It was a sign of seething resentment that they were willing to ignore the wildly hyperbolic claims of impending disaster from both the national and political establishment and to vote for Brexit.
Having done this, they expected the normal rules of democracy to apply. What they did not expect was to be vilified and for the losing side to do everything in their power to reverse the outcome. They found the idea of being told to think back to a popular vote was an insult, and indeed it was. The result was the demolition of the Labor “red wall” in the 2019 general election.
As Starmer seems to have belatedly realized now, there is little political mileage in continuing to complain about the decision made in June 2016. Johnson is happy to “own” his trade deal because it allows him to say that he will use the freedom he is given to address the issues. leave voter complaints. I’d be delighted to see Labor oppose it.
