Wednesday, 29 May 2013

Guns or butter, trade or war?

International trade often has pretty appalling effects, such as the exploitation of some of the world’s most vulnerable people or damage to the environment, but as a general rule it has some beneficial effects, including boosting prosperity and avoiding war. After all, it’s not particularly good for business if you open fire on your client or your supplier, or they open fire on you. Not good for health either.

That’s why I’m terribly keen on the new Transatlantic Trade and Investment Partnership, catchily referred to as TTIP, being negotiated at the moment between the United States and the European Union. If it’s concluded, it’ll be the biggest trade deal in history.

David Cameron has played a significant role in trying to win support for the agreement in Washington. Which is curious. On the one hand, he goes out there to bat for the agreement, as well he might: experts are suggesting it might be worth 1-2% on GDP on both sides of the Atlantic and, boy, do we need any growth we can get. Nothing else the government’s doing seems to generate any.

Sadly, on the other hand, David Cameron is in awe of the right wing of his own Conservative Party, and of the far right grouping UKIP, currently enjoying a bit of a bubble in the polls. So he keeps tossing them bits of raw meat, apparently unable to understand that each time he does that, they only come back for more. The latest raw meat is the offer of a referendum with a single question: should Britain remain in the EU or not?

The mere fact of having made that commitment has upset the negotiations, as the US has pointed out: the Obama government is already in a fight to get the agreement through Congress and any disruption only makes things worse. But even if it is adopted, the US has made it clear that it would not apply to Britain outside the EU.

So Cameron bats for the agreement on the one hand, for sound economic reasons, and undermines it on the other, for lousy political ones.

Meanwhile, with the support of the French, he has managed to bring an end to the embargo on arms sales to Syrian rebels. Immediately the Russians have announced they will sell powerful and sophisticated anti-aircraft systems to the government there, which is interesting: there’s not much air power on the rebel side, whereas there is, of course, in Israel – which is extremely unhappy about the Russian move and threatening military action.

Preferable to a trade agreement?
So we’ve just seriously ratcheted up the chances of escalating the war in Syria, having it spill out into a regional conflict.

The biggest trade agreement in history in jeopardy. A growing risk of war in the world’s tinderbox.

Am I alone in thinking that Cameron has got everything exactly back to front?

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