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US Threatens UK With Trade Barriers If It Leaves The European Union

One of the most important decisions Brits have to make before the end of 2017 (most likely some time next year) is whether or not to remain in the European Union, and while recent polls have those willing to stay in as the majority, there has been a spike in support for leaving the bloc...

... which coupled with Europe's refugee crisis has made a Brexit an all too possible outcome.

Which probably explains why the U.S., confident it sill has veto power over democracies anywhere in the world, has just made it quite clear to UK's citizens which way they should vote.

According to the Guardian, the US trade representative, Michael Froman, in the first public comments from a senior US official on the matter, said that "the United States is not keen on pursuing a separate free trade deal with Britain if it leaves the European Union."

Just like in the case of Scotland's vote last year, trade is being used a key bargaining chip, or rather ultimatum: vote the way we want, or else. Guardian adds that Froman’s comments on Wednesday undermine a key economic argument deployed by proponents of exit, who say Britain would prosper on its own and be able to secure bilateral free trade agreements (FTAs) with trading partners.

The US is Britain’s biggest export market after the EU, buying more than $54bn (£35bn) in goods from the UK in 2014.

“I think it’s absolutely clear that Britain has a greater voice at the trade table being part of the EU, being part of a larger economic entity,” Froman told Reuters, adding that EU membership gives Britain more leverage in negotiations.

“We’re not particularly in the market for FTAs with individual countries. We’re building platforms … that other countries can join over time.”

Froman's take it or leave it condition is that if Britain left the EU, Froman said, it would face the same tariffs and trade barriers as other countries outside the US free trade network. “We have no FTA with the UK so they would be subject to the same tariffs – and other trade-related measures – as China, or Brazil or India,” he said.

Of course, the US could craft a deal in hours if not minutes if it so wanted, and David Cameron knows this. However, it is far easier for the U.S. oversee a world which is globalizing rather than fragmenting, because if the U.K. were to leave the Union, the line of countries willing to be next would stretch around the block.

Some more details on UK's trade statusin the EU:

The US is Britain’s second-largest export market for vehicles outside the EU.

 

If Britain is not part of the EU and therefore not part of TTIP, British cars exported to the US, such as those made by Jaguar Land Rover, would face a 2.5% tariff and could be at a disadvantage to German and Italian-made competitors.

 

British exports of fuel and chocolate could also be at a disadvantage if TTIP abolishes tariffs on those products.

Those are the benefits of the continued UK allegiance to Washington; however just ask any orginary Brit for the trade offs and you will be listening hours later, usually involving cheap labor migration from the continent.

But perhaps the most interesting consequence from this latest U.S. intervention in foreign affairs is how ordinary citizens will react when they realize just how aggressively the U.S. defends its strategic status quo interests. Which would then lead to a potentially fascinating pivot, one which would explain all the friendly relations between the U.K. and Beijing in recent months, including not only Xi Jinping's recent visit, but also why China picked London as the city where to issue its first sovereign debt in Renminbi.

Meanwhile, the biggest loser from this latest power push may be none other than the U.S. which may soon learn, the very hard way, that those whom it considered close strategic allies can just as quickly find other partners in a world where the US is no longer the only superpower on the block.