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We will never know what Boris Johnson or David Davis might have said to the US President during his visit to the UK. Having left government they are not on the guest list, although Trump’s latest tweets suggest he may seek to see Boris Johnson even though that latter has resigned as foreign secretary. Here are some ideas as to what might have been said by Boris and the former Brexit Secretary…
We are extremely pleased to welcome the US President here in the United Kingdom, representing as he does a country that shares so much in common with my own country in its values, its commitment to the rule of law, to the protection of property rights, of free peoples trading in free markets and trading freely around the world.
Mr President, we are in a great time of change. While our country has voted to leave the European Union, and in doing so to embrace the rest of the world, there is an existential battle going on. It is the battle of ideas between competition-led capitalism and state-led capitalism, between competition and cronyism. The tide of a prescriptive, dirigiste approach to economic governance as exemplified by countries like China has washed across the shores of Europe. We are in a fight no less real than the wars, hot and cold that we have fought together before. Our enemy is not Europe of course. Our enemy is poverty, and wealth destruction.
We believe that wealth can be created or destroyed. We believe it is more difficult to create than it is to destroy. And we believe that competition is the greatest force mankind has ever known to create it. It is competition, a free people competing based on the quality of their ideas and their capacity for hard work, and not on cronyism or their ability to get a law or regulation that hurts their competitors; it is competition that has lifted billions out of poverty, created innovative ideas and turned them into companies that employ hundreds of thousands of people. It is cronyism, protectionism and over-regulation that has enervated mankind’s spirit, destroying wealth and pushing people deeper and deeper into poverty.
The UK and US have always promoted competition on the merits, that great aspirational principle – the heart of the American dream, that your children can have a life better than yours. We are so proud and humbled to stand alongside a country that has put into practice so much that our own British philosophers discovered. From Adam Smith, John Locke to David Ricardo; from Magna Carta to the industrial revolution; you have taken these ideas, forged in the fires of competition and made them reality. You have been that shining city on a hill for the rest of the world. I hope you will permit me to say that we played some role in your success.
But now we are joined in a mutual struggle – a struggle to show the world that where competition is weakened or crushed, where government replaces what the private sector can do, it is the people who lose out, and the poorest among us are the ones who lose out most of all.
The battlefield for this struggle is set. If the US and UK can agree a free trade agreement, one that pulls the UK out of the European regulatory orbit, this will be enormously beneficial to America’s farmers, businesses and consumers. Such an agreement is also in the American interest, because the US and UK face the same threat from China market distortions. China distortions have created an over capacity of supply in the steel sector. Our inability to deal with these distortions has caused people rightly to question the whole concept of trade liberalisation and its capacity to lift people out of poverty and create wealth. Hence we are embarked on a program of ever-greater regulation and an ever weakened private sector. We must reverse this process and we can.
Our new, independent trade policy will be built on four fundamental pillars which reflect what we can do unilaterally, bilaterally, in plurilateral agreements and in the WTO. Part of the bilateral agenda is an agreement between the UK and US while we are also negotiating a comprehensive free trade agreement between the EU and UK. You might say, we will wait and see what your agreement is with the EU before we proceed with you. That would seem logical. We know that the US understands that we will be negotiating and will be able to sign deals in the implementation period which will begin when we leave the EU in March, 2019, just under a year from now. But we are here to say that there is no reality where you wait for our negotiation with the EU to conclude and then sign a deal with us. If our negotiations with you and the EU are not concurrent, our own incumbent business and status quo beneficiaries will push hard for us to lock into the regulatory orbit of the EU in some fashion and there will be no serious trade deal possible in the future. Look at the pressure on us if we negotiate with the EU in a vacuum. It has resulted in a Cabinet agreement that neither of us could sell. If we don’t negotiate such a deal, the US will lose a significant opportunity. You will have lost the opportunity to shape the trade policy of a major G7 country. Such an opportunity will not come again for generations, if ever.
Let us explain what we think you would lose by painting a picture of why the US-UK deal is so important to both the UK and the US.
First, you have said clearly in trade fora that you are not a protectionist, and, contrary to many, we don’t believe that you are. We believe the US has been one of the strongest forces for liberalised trade on the planet. A deal with the UK, a country at a similar socio-economic level so there can be no race to the bottom or offshoring of US jobs, a country where there is a balanced trade relationship is the ideal candidate for your bilateral agenda.
Second, the possibility of moving a significant European power from the prescriptive rule book approach of EU regulation to a more outcome, effects based system which is based on our common approaches to law and economics could be a significant win in this war of ideas we are in. Your industries have long complained about the EU’s regulatory system, standard setting practices and its ferocious application of the precautionary principle. These things have held back innovation for us in the UK, and we must now break free of it.
Third, we are both affected by the kinds of anti-competitive market distortions in China and other places, and by the actions of state-owned enterprises. We can do in our agreement what had been the hope in the TTIP – a 21st century set of disciplines that could be applied to third parties. We wish you well in your negotiations with the EU, but you must determine whether you think the kind of deal you wish to negotiate that lessens distortions and eliminates red tape and unnecessary bureaucracy in Europe is easier with them than it would be with us. The fact that we will both be negotiating with them at the same time will help us both to reach a better understanding with the EU.
Fourth, we have shared geo-strategic and geo-political interests in sectors like defense, financial services, and pharmaceuticals where our industries form part of an integrated whole. Broadening that market and becoming a rule setter for the world not a rule taker will be most important. Together, we can push back on the tide that threatens to swamp the wealth creation efforts that have lifted so many out of poverty in the post war period.
We have a unique opportunity to use our partnership to promote wealth creation, to lift people around the world out of poverty and to make real a world of opportunity and hope. For too long, the UK has languished, unable to play the full partner you have needed to make this case around the world. No longer. We are ready to take up our sword, and fight for what is right, but we need your help to emerge as a full WTO member and partner, undamaged, and we need your help to ensure we break free of too close a regulatory orbit with the EU.
In the battle for the heart of the world’s operating system – the global regulatory system, if you will – the UK has become the battlefield. If you act now, with determination and the entrepreneurial spirit that has characterised your nation, taking full advantage of this unique opportunity, this unfrozen moment to have the world’s fifth largest economy and second biggest exporter of services to push hard for competition based regulatory and trade policy alongside you, we can turn back the tide of anti-competitive laws and regulation around the world, and create wealth where previously it has been destroyed.