The Prime Minister has said that ‘no deal’ would be better than a bad deal for a Britain leaving the EU
She has made it seemingly plain that, at present, she does not see Britain remaining in any way in the single market or a customs union. In other words, unless the government changes its view in the course of negotiations, we could reach a position where we shall become desperate to form other trading relationships.
That desperation would be plain to all, making our negotiating position extremely weak.
It’s worth remembering what happened on another occasion when we were in a desperate position – the early part of World War Two. At the outset, we and the French had money in hand to place paid-in-advance orders with American firms for urgently needed supplies.
The Americans took the money to fund their own industrial development, but were late on delivering the actual goods.
The cost of the war was such that the money soon ran out, and financial help was sought from the US. It was not readily given: after long discussions hard bargains were driven. At that stage, the US had no intention of going to war itself, and saw our desperate needs as a lever to weaken Britain’s future economic position in the world.
For instance, one condition of US help was that Britain would have to give up Empire Free Trade, which had been a great benefit to both this country and the Empire countries. Another condition was that if Britain were defeated in the war, all British-owned assets in the US were to become the property of the US government.
By Autumn 1941, US dominance had even extended to giving its government complete control of what Britain would and would not be allowed to export at that time. And so on.
Finally, it might be worth remembering that the Americans did very well economically out of that war. Whilst most participants, including Britain, were bankrupted, the US doubled its national wealth between 1939 and 1945.
‘America first’ is not a new policy, and if we are to be put in a position of negotiating from weakness with the US and others, we shouldn’t expect any favours.
The Prime Minister has not come out looking strong enough when faced with Donald Trump, and our Secretary of State for Trade would be no match for the big-gun negotiators surrounding the American President.