At the stroke of 11 p.m. on Jan. 31, Britain was no longer part of the European Union and free to make any kind of trade deal its government could reach “without let or hindrance” from the EU.
But this “freedom” means that U.S. imperialism is free to put intense pressure on a stand-alone country whose major trading partner is the EU — just across the Channel. Forty-five percent of all Britain’s exports in 2019 were to the EU and 53 percent of all its imports from the EU. Only 13 percent of its exports were to the U.S.
London has conflicts with Washington over taxes, trade and technology. If the British government imposes a digital-services tax that hits U.S.-based tech giants, the Trump administration threatens to retaliate with a 100 percent tariff on British car exports.
The U.S. and the EU have conflicting health and safety standards. The EU forbids the sale or import of frozen chlorinated chicken. In the U.S., it is a common way of treating frozen chicken.
The U.S. trade model is a lot looser than the EU’s, but Britain is going to have trouble straddling between them. If British corporations adhere to U.S. rules on food safety, they could run into the EU’s nontariff barriers. If Britain adopts U.S. rules on social protections for workers, which are far less protective than EU rules, Britain can have problems trading with the EU.
The contradictions could create a problem for cross-border trade between the Republic of Ireland, which is part of the EU, and the six counties of northeast Ireland, which for now is part of Britain.
British Prime Minister Boris Johnson is scheduled to say on Feb. 3: “There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules.” (Guardian, Feb. 2)
U.S.-British conflict over Huawei
The market for 5G network gear, software and the hardware necessary to use the new standard is estimated to be around $700 billion for the decade 2019-29. The Chinese firm Huawei is a world leader in 5G technology, providing reliable gear at relatively low prices. Huawei is the world’s second-largest cell phone provider and has a major share of Britain’s market.
The technological issue between the U.S. and Britain centers on Johnson’s decision to use some kits from Huawei for the 5G network that is being built in England. This decision was announced two days before Secretary of State Mike Pompeo went to Britain to discuss the changes in U.S.-UK relations that Brexit will produce. Pompeo aims to deny China and Huawei the ability to shape the future of the internet.
5G is a new network standard that is faster, more reliable and more capable than the current 4G network. If England excludes Huawei from its 5G network build, its people will have to bear the heavy costs of ripping Huawei gear out of its 4G network.
5G will accelerate the growth and expansion of telecommunications. It will also redefine industries such as automotive, entertainment, computing and manufacturing. Like any advanced economy, Britain’s will have to adopt it.
Washington claims that British use of Huawei equipment would create a grave security risk, opening up networks to monitoring by Chinese intelligence. Huawei denies this claim and points to its use of open source code.
The French government has stated that it will use Huawei equipment. Huawei has 25 percent of the telecommunications market in France. German network operators say that banning Huawei may add years of delays and billions in costs to Germany’s 5G network launch.
Responding to U.S. pressure on the security issue, a number of Conservative members of the British Parliament have challenged Johnson’s decision on Huawei’s gear.