Theresa May’s Trump Card

Abstract

Since the Brexit referendum of 2016, the United Kingdom (UK) under its Prime-Minister Theresa May has opted for a hard-Brexit — a choice that, according to critics, would cost the state 60 billion Euros to the European Union (EU). With the new administration under United States (US) President Donald Trump, the UK has likely found itself a useful partner in the upcoming trade-negotiations with the EU.

Ideologically — mainly on grounds of anti-immigration policies — President Trump formerly endorsed the pro-Brexit movement and has been a harsh critic of the EU over its dealings with the Syrian refugee crisis. Since the definition of the UK-US “special relationship” since Sir Winston Churchill 70 years ago, Prime-Minister May’s rapprochement to President Trump using that same narrative is most reminiscent to UK Prime-Minister Margaret Thatcher and US President Ronald Reagan’s relationship during the 1980s when both political leaders formed a Western front in Europe against Soviet aggression; ultimately leading to the demise of the USSR.

Although today’s circumstances show no clear resemblance to the 1980s, potential deteriorating EU — UK relations could substantiate the US’s role as UK’s remaining trade and security-ally. President Trump’s position regarding the EU on security issues and most likely also trade issues related to Germany’s automobile industry, not to mention President Trump’s ambivalent attitude to NATO, should — put in the correct perspective — at least give some merit and value and substantial content to critics of Prime-Minister May’s choice to opt for a hard-Brexit and reevaluate, in fact, the underdog position the EU may well find itself in eventually.

Literature Review

Political news junkies like myself had a hard time keeping up with the developments around President Trump’s campaign in 2016, and the year 2017 has already shifted in many ways how political news should be reported. News outlets open new positions to fill in their editorial departments and the Trump administration has started banning news outlets from the White House Press Office. Although these developments mark as unprecedented in contemporary US history, there are some historical lines to be drawn that are connected to the geopolitics as stated in this paper’s Abstract. Also, we will most likely see a very different approach to the EU from the US. As this paper discusses the Brexit negotiations, major players from both blocks — the UK and the EU — will be heavily discussed according to their own agenda-setting; the US only to a certain degree as the position of the Trump administration with regards to the EU is not clear-cut.

There are in fact three ways the content of this paper is set-up: First, much of the information is drawn from news outlets with an emphasis on business, like the Financial Times and Bloomberg, as an important theme discussed over Brexit is the trade-relationship between the EU and the UK. At the time of writing, the actual trigger for Brexit — initiating Article 50 — has not yet been pulled and no actual date is set, although some speak about early-March or late-March. For this paper it means that its content is based on what the preconceived positions and interests of its major players are around the time of March 2017. At the end of this paper, a likely scenario that could unfold will be presented.

This brings me to the second part of how the content of this paper is managed: A January 26th 2017 published opinionated piece on Project Syndicate written by main Brexit negotiator and leader of the Alliance of Liberals and Democrats for Europe Group and Member of the European Parliament from Belgium Guy Verhofstadt. In this piece he reacts on Theresa May’s historic Brexit speech earlier that month. The full transcript of May’s Brexit speech published by The Telegraph on January 17th will be thoroughly cited and discussed in this paper. Also Verhofstadt’s views on the coming negotiations will be put to use.

Third and lastly, the negotiation-theories by Fisher and Ury Getting to Yes and Getting Past No are used the structure and manage the content by, first identifying May’s BATNA; second, identifying UK’s positions of interests with the US and the EU; third, identifying UK’s leverage points to the US and the EU; fourth, identifying the objective criteria for May’s hard-Brexit stand. These objectives are then translated into research questions where their respective objectives are discussed. Lastly, the information from the research questions will be discussed and analyzed.

Objectives

  1. Identify Prime Minister May’s BATNA

Both historically as well as from contemporary indications, it is safe to suggest that the US will always be UK’s Best Alternative to a Negotiated Agreement in future engagements. As stated in the Abstract, the US and the UK have remained close nations after the Second World War. The themes “trade” and “security” will come back later in this paper, but it should be no surprise that the US fits this role for the UK. Aside from the ideological differences between May (previous to the Brexit, May belonged to the pro-Remain camp of the conservative party) and Trump (who has been a vocal proponent of the Brexit and a stark critic of the EU), it should be clear that the historic and contemporary US – UK relation is the protection that May seeks in the upcoming Brexit negotiations with the EU. 

Even stronger so, setting aside the ideological differences between May and Trump, thereby separating the people from the problem and focussing the US – UK relationship on trade and security, May secures her agenda of a bottomline that will not be changed.

It is, however, under the circumstances that the Trump campaign managed to wield US presidential power amid allegations of foreign interference by Vladimir Putin’s Russia, amid Trump’s perceived weak stand in the world due to allegations of white supremacist outings from his supporters, a question whether this bottomline will be able to stand. Should Trump’s agenda with regards to NATO become more clear, should Trump’s agenda with regards to US trade deficits with European nations (Germany, but also the UK) come to change, then May’s BATNA has a good chance of changing, too.

Yet, amid these BATNA-insecurities, May was able to buy some time. By initiating a phone call and a visit to Trump, where both aimed at being caught on camera holding hands, and by not condemning the potential hacking of the US election by Russia, May has set aside her own liberal agenda and used the “special relationship” – narrative to appear to potentially side with the anti-globalist agenda of Trump, further putting pressure on the liberal trade structures of the EU; the same structures used by US businesses to thrive in Europe, but also for the EU’s diverse set of export products that has resulted in a US trade deficit to Germany and the UK.

Furthermore, by having the UK Supreme court make a statement concerning Article 50, and also requesting Parliament to make an unanimous statement about Brexit, May has been buying time to come up with a strategy.

2. Identify UK’s positions of interests with the US and the EU

Although the main rhetorical argument from May’s Brexit speech, to build a “truly Global Britain,” offers some insights in the positions that she will take in the upcoming negotiations, the key verb “to feel” should not be underestimated in what kind of deal May is aiming for:

“It’s not simply because our history and culture is profoundly internationalist, important though that is. Many in Britain have always felt that the United Kingdom’s place in the European Union came at the expense of our global ties.”

(May, 2017)

May’s globalist perspective is very much present throughout the speech, but, more importantly, the remark that UK’s place in the EU is an emotional issue, captures the rationale behind the Brexit from a cultural perspective; hereby painting her position in the upcoming negotiations as an issue of UK identity. By manifesting this cultural position, May allows the common interests between both the UK and the EU to be open for negotiation as the UK is moving to remove itself from the EU. May’s key points: guaranteeing the rights of EU nationals in Britain and Britons living in Europe, leaving the single market through enacting a free trade deal with minor payments to the contributions that are currently being made (May, 2017).

To the US, May has been stepping to the side of the Trump administration: criticizing former US Secretary of State John Kerry’s condemnation of Israeli settlement construction in the West Bank (Trump is rewarding of such disruptive behavior) and having British Foreign Secretary Boris Johnson veto an EU statement of support for an ongoing Middle East peace effort; also, refusing to send a high-level delegation to a Middle East peace conference organized by the French government, arguing that it would send the wrong signal four days before Trump took office (Verhofstadt, 2017).

In short, May acknowledges the person, Trump, and acknowledges his authority. As is widely known, Trump is very insecure about his current leadership (criticizing the outcome of the election over losing the popular vote, criticizing the media for allegedly framing the inauguration crowd as smaller than the crowd President Barack Obama had in 2008; having a very defensive position about the size of his hands).

3. Identify UK’s leverage points when it comes to dealing with the US and the EU

An obstacle to agreement between the UK and the EU is the 60 billion euros exit bill that the EU has presented to the UK to pay prior to agree on a new free trade agreement. This free trade agreement, according to May, does not mean membership to the single market having to comply to “EU’s rules and regulations” and “accepting a role for the European Court of Justice […] having direct legal authority in our country” (May, 2017). The 60 billion euros exit bill stems from the UK’s promised contributions to the EU budget as a member of the single market (Bloomberg, 2017).

This is where the Brexit-negotiation is expected to become difficult and could potentially result in a breakdown. EU Commission’s Brexit chief negotiator, Michel Barnier is expected to tackle the issues of money and expatriate rights first because they are the most politically sensitive matters, meanwhile, denying the UK any trade talks until progress is made on the exit bill (FT, 2017).

May, while also asserting she wants to guarantee the rights of Europeans to live in the UK and Britons to live in Europe, hereby inventing options for mutual gain; on the other hand, is expected to want to negotiate a new free trade agreement that aligns with her ambitions for a Global Britain:

“We want to get out into the wider world, to trade and do business all around the globe. Countries including China, Brazil and the Gulf States have already expressed their interest in striking trade deals with us. We have started discussions on future trade ties with countries like Australia, New Zealand and India. And President-elect Trump has said Britain is not ‘at the back of the queue’ for a trade deal with the United States, the world’s biggest economy, but front of the line.” (May, 2017)

“And a Global Britain will continue to cooperate with its European partners in important areas such as crime, terrorism and foreign affairs. All of us in Europe face the challenge of cross-border crime, a deadly terrorist threat, and the dangers presented by hostile states. All of us share interests and values in common, values we want to see projected around the world.”

(May, 2017)

There is much room for scepticism to what extent May will try to build a golden bridge when while pandering to the Trump administration, the security of the UK and the EU is being undermined by Eurosceptics such as Steve Bannon, the White House chief strategist, and also, by Trump’s continuous view of NATO as an “obsolete” organization. Verhofstadt argues in his opinion-piece that American success over the 20th century rested mainly on strong multilateral institutions, close partnerships, and international rules that aim at maintaining global peace and stability (Verhofstadt, 2017). This apparent difference in judgment between both negotiators of the UK and the EU will, to current information available and knowledge, only work in favor for the US.

4. Identify the set of objective criteria Theresa May has opted for in taking a stand for hard-Brexit.

Amid an apparent lack of strategy when it comes to dealing with the EU, May does opt to provide objective criteria to the argument that UK and the EU need each other on trade and security. On trade she stated that the UK “will welcome agreement to continue to collaborate with our European partners on major science, research, and technology initiatives” and that “from space exploration to clean energy to medical technologies, Britain will remain at the forefront of collective endeavors to better understand, and make better, the world in which we live” (May, 2017).

But when it comes to security, May’s position to the EU has found itself negotiable. Pandering to the Trump administration, demonstrating her BATNA, seems to go hand-in-hand in how she aims at using Britain’s nuclear capabilities, the permanent seat on the United Nations Security Council, Britain’s armed forces and its intelligence capabilities — “unique in Europe” (May, 2017, p 9).

 Research Questions

  1. How will Theresa May overcome the differences between the UK and the Trump administration?

Translated differently, the research question comes down to this: Is May’s BATNA a safe bet? The answer is simply ‘no.’ In fact, May’s Brexit strategy has very high risk tendencies which will be discussed later on, but for now, Trump is one of those high risks.

May’s tactic to go to the balcony and not condemn the potential hacking of the US election by Russia, also falling short of mentioning Russia in her Brexit speech (while there are allegations that Putin’s Russia was involved in swaying the Brexit vote, thereby undermining UK’s democracy; also, ignoring the humanitarian atrocities committed by Russian separatists in Ukraine; this last one having signed an association agreement with the UK and the EU on trade) either means two things:

Either, May’s geopolitical strategy aims at using Russia to undermine the democracies of the EU in order to secure herself and the UK of a good deal. Or, May’s vision for a Global Britain can be translated to “Britain First” and does not involve the liberal moralities of international law.

Either way, there is no reason to believe May has seriously considered Trump as a liability to her BATNA due to his ambivalent stance regarding NATO, while also promoting a protectionist trade agenda that potentially conflicts with May’s Global Britain. For the time being, however, creating a favorable climate for negotiating potentially helps May with her talks about the 60 billion euros exit bill. Not being able to do so would undermine May’s position at home.

2. How can the UK negotiate the issues of trade and security between the two blocks, the US and the EU?

The slogan “Global Britain” acknowledges the differences with optimism, aiming at managing trade deals on a worldwide scale. The main problem May will face is Barnier’s plan to deny any new trade talks until progress is made on the exit bill.

What’s more, although Trump has publicly spoken positively about the Brexit regarding immigration policies in the UK, the trade deficit the US has with the UK would not sit well in the long-term should the two countries want to deepen their economic ties in their “special relationship.” The Trump administration has been deeply critical of how the EU is governed and Bannon has been propagating for anti-EU political parties in France and the Netherlands. A successful Brexit for the UK could potentially flip-over other EU countries as well. This is precisely why German, Italian and Czech political actors have been backing Barnier’s line (FT, 2017).

In short, Trump and May have opposing positions in their respective economic protectionism and internationalism, but behind lie shared and compatible interests in weakening EU’s current stance as well as conflicting ones with regards to US trade deficits.

3. How can the United Kingdom balance the apparent differences in dealing with the opposing agendas of the United States under President Trump and a European Union under liberal leadership?

Inventing options for mutual gain in the case of the UK and the EU over Brexit should be clear: there is no mutual gain. The EU will find itself in a political and economical crisis; and whatever the outcome of the negotiations will be the UK will find itself much poorer off. Trump’s USA will be the only winner walking away from Brexit.

May has promised a Brexit to the people (“Brexit means Brexit”), which actually empowers EU’s negotiation position, no matter how clarifying this commitment to the UK is. The only bargaining position the UK has is lowering its corporate tax rates to lure businesses and investments to the UK. However, the conservative’s promise to become a political party for the working class defies this plan.

The alternative is a devastating blow to UK’s finance industry with 35,000 jobs lost, revenues of 18 billion pounds per year and taxes of 3 – 5 billion pounds per year (Wyman, 2016).

In conclusion, the only way the UK and the EU can find options for mutual gain is to come together for a brainstorm session. However, amid the geopolitical powerplay explained previously, this would have to done through a third party, or multiple third party mediators. To Verhofstadt and Barnier, Trump’s USA will likely not be suited for this role.

4. Why can the strategy opted for hard-Brexit opt in Theresa May’s favor in the upcoming negotiations?

There are actually two scenarios that can unfold, and in both cases May ends up on top: The first scenario is that the parliamentary elections in the Netherlands, France, Germany and Italy will assert deeper the regional Euroscepticism with pressure amounting on EU Parliamentary leaders and Commissioners to deal with a disuniting trade-block. Either EU ties between member states will deepen, or the ties will sever, in which case, the UK may come out well of the negotiations due to a changing BATNA: which is to form a new trading block with the parting EU-member states against the EU Parliament and EU Commission. In this scenario, the economic effects will be felt for a long time throughout the region, but at least May’s political career is save.

The second scenario is when EU leadership will be able to stand strong amid the Euroscepticism and will even deepen the political ties between its member states. In this scenario, May has two choices: side with the US and put Trump’s chaos spreading foreign policy to use; however, she will most likely opt for the possibility of building a golden bridge for the EU, denouncing Trump’s administration for interfering with EU policies on trade, while making a clear military pledge to NATO to stand strong against Russian aggression; changing her negotiating position with the EU from adversaries to partners. Here, again, the economic effects of the Brexit will be felt for a long time in the UK, but, here also, May’s political career is save.

Final Discussion & Analysis

What can be deducted from the answers from the Research Questions is that the cultural shift in the UK in terms of what the electorate wants in trade policies has a tendency to transform to nationalist geopolitics by the political actors who serve them. Political leaders UK Prime Minister May and US President Trump will be looking to pressurize the EU-member states to dismember. Trump, obviously for reasons not yet confirmed, yet plausible enough for European intelligence services to have stopped intelligence sharing due to possibilities of blackmail by Russia, will in the most likely scenario continue to regard immigration and counter-terrorism as a more urgent security issue than the EU break-up.

Russian interference in EU national elections supporting nationalist anti-European Union parties has the potential to fall in the same interests as Trump. But also, for the UK to be able to form a new trading block with parting EU members, her interests correspond unsuitably sufficient with the nationalist geopolitics played out by Trump’s USA and Putin’s Russia midst starkly differing positions on NATO.

Europe has always been a continent of continuous conflict. Only since the end of WWII when European nations were forced by the United States to work together to rebuild their economies and Europe essentially came to fall under the flagship of the US, this changed. But since US President Trump’s view of Europe conflicts with the views of his predecessors and the military alliance between the US and Europe has a potential of ending in the coming years, Europe’s relative peace can potentially discontinue, too.

The rise of Eurosceptic political parties is a sign that the governing of the European Union needs change. Whether this will go through hard break-ups and the formation of new trade alliances or the EU’s ability to reform its structure of government remains to be seen. In conclusion, the Brexit is only the start of what will most likely be Europe’s most important geopolitical event of the 21st century.

Bibliography

Bloomberg (2017) UK faces 60 billion euro Brexit bill. Bloomberg.  Retrieved on 9.3.2017: https://www.bloomberg.com/politics/articles/2017-02-23/u-k-faces-60-billion-euro-brexit-bill-austrian-chancellor-says

May, T. (2017) Theresa May’s Brexit Speech Full. The Telegraph. Retrieved on 9.3.2017: http://www.telegraph.co.uk/news/2017/01/17/theresa-mays-brexit-speech-full/

FT (2017) How will Theresa May look one year from now? Financial Times, issue February 24th 2017. Retrieved 9.3.2017 : https://www.ft.com/content/866ff996-fa8c-11e6-9516-2d969e0d3b65

Verhofstadt, G. (2017) Theresa May’s Trump Card. Project Syndicate. Retrieved on 9.3.2017 : https://www.project-syndicate.org/commentary/theresa-may-trump-card-by-guy-verhofstadt-2017-01

Wyman, O. (2016) The Impact of the UK’s Exit from the EU on the UK-based financial services sector. Marsh & McLennan Companies.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s