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A No-Deal Brexit Would Spark an Economic Cold War with the EU
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Bluff was a central feature of British power even when the British empire covered a large part of the globe. A story illustrating this tells of a royal navy captain who was sent with a small ship to the far east to force a defiant local ruler to obey some orders issued by the British authorities.

“What do I do if he refuses to do what I tell him?” the captain asked his superiors before departing. “We don’t have any more ships available, so you’ll just have to turn around and come home again,” was the less than comforting reply.

The captain sailed on his mission and transmitted the British demands to the recalcitrant ruler. “What will happen if I refuse to obey?” he asked. “In that case,” replied the captain menacingly, “I will have no alternative but to carry out the second half of my instructions.”

On that occasion, the British got their way, but it is only great powers that can afford to bluff like this and get away with it. Their bluff is not called because nobody wants to find out the hard way if they mean it. A mistake of Theresa May was to make the vague threat of a no-deal Brexit so central to her strategy and expect this to be taken seriously by Brussels. Most there thought she was bluffing because they believed that Britain would not do anything so economically self-destructive and politically divisive. Boris Johnson is now refurbish the no-deal threat to give it credibility, but this does not change the balance of forces which are, as always, skewed against Britain and in favour of the EU, something the Eurosceptics never seem to understand.

Analysis of a no-deal Brexit frequently lacks realism because the focus is on economics rather than politics. This contradicts the experience of the last three years when the prospect of Britain’s departure from the EU has generated great political destruction, but only limited economic damage for the obvious reason that Britain has yet to leave the EU. A British no-deal departure from the EU would, on the contrary, be opposed by so much of the population that it would produce a political earthquake, widening still further the fault lines within British society that are already gaping wide.

The hard-right cabinet appointed by Johnson implicitly recognises that the divisions within the Conservative are so rancorous as to be a recipe for paralysis if all factions are represented in government. But temporary cohesion achieved by giving almost all ministries to a single faction of the Conservative Party, which itself is a minority in parliament, may well prove more explosive. The fact that the most important decision taken in Britain for eighty years is being taken by such an unrepresentative group delegitimises it from the beginning.

A no-deal Brexit would only be the opening shots of an economic cold war waged against the rest of Europe in a conflict that might go on for years. This is unsurprising because a new feature of conflicts between nation states globally is that economic hostilities are replacing military hostilities, though the degree of confrontation varies vastly from country to country. The conflict between the US and Iran in which President Trump is trying to batter the Iranians into submission by an ever-tightening economic siege is the closest to a shooting war.

US and EU sanctions on Syria are similarly an attempt at economic strangulation. Their purpose according to US special envoy James Jeffery is to “make life as miserable as possible for that flopping cadaver of a regime and let the Russians and Iranians, who made this mess, get out of it”. In practice, it is ordinary Syrians who are expiring because of collapsing living standards and lack of medical attention while the Syrian leadership suffers scarcely at all.

Sanctions and tariffs are central to Trump’s effort to make America great again and it is not an unintelligent strategy. It puts intense pressure on China as America’s great rival, but also on Canada and Mexico. America’s vaunted military superiority failed to win wars in Iraq and Afghanistan leading Trump to avoid similar debacles. In two and a half years he has not started a single military conflict, but he has started a series of trade wars. He understands that the US Treasury has a more impressive record in waging economic warfare than the Pentagon does in fighting hot wars. Sanctions and tariffs, unlike shooting wars, can be switched on and off and are less politically tricky because there are no dead American bodies coming home.

This approach matters to the UK because outside the EU it will inevitably be even more dependent on the US. A sign of this was the highly provocative and dubiously legal seizure by royal marine commandos of the Iranian oil tanker Grace 1 off Gibraltar on 4 July. This predictably led to the Iranian tit-for-tat capture of the British-flagged Stena Impero in the Strait of Hormuz on 19 July. In one of his last statements as foreign secretary, Jeremy Hunt said that Britain was not joining the US policy of “maximum pressure” on Iran, though it seemed to have just done that, and was looking to European states, notably France and Germany, to set up a shipping protection force in the Gulf.

Many are pointing out the irony of the UK looking for EU states to provide naval escorts in the Gulf at the very moment that Johnson is asserting his intention to take Britain “do-or-die” out of the EU on 31 October. A UK decision to openly join – as it already seems to have done covertly – the US-led alliance against Iran would be an early pointer to the emergence of an Anglo-Saxon Trump/Johnson coalition in the Middle East.

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Even more important would be the unavoidable reliance of Britain on the US in the event of a no-deal Brexit or a British departure from the EU so ragged and contentious that it would start a long-lasting economic cold war between the two. In such a confrontation, Johnson would look to Trump and Washington not just for a trade deal but for all-embracing political support against the EU.

Brexit in Britain has long ceased to be solely about leaving the EU and has become a vehicle for hard-right wing policies seeking to remodel Britain along lines closer to Trump’s America than the EU. In the event of rivalry with the EU, the UK would look to deregulation and lower taxes for business to attract companies away from the EU states.

Turning Britain into a “Singapore on Thames” sounded zany and impractical when first raised as an option after the referendum, but it is more feasible today – and attractive to much of the present cabinet – in the context of a permanent hostile relationship between Britain and the EU.

From Trump’s point of view, standing with Britain in such an economic cold war would be a way of weaponising the post-Brexit situation to destroy or damage the EU, the world’s largest trading bloc, to which he has always been opposed.

(Republished from The Independent by permission of author or representative)
 
• Category: Economics, Foreign Policy • Tags: Brexit, Britain 
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  1. It’s interesting that Mr. Cockburn started his article by talking about bluff. If all empires aren’t founded on bluff then they are certainly sustained by it and, it should be pointed out, that includes the E.U. Surely everyone must have noticed that the E.U. hasn’t thrown Britain out yet? In fact they have extended the deadline for leaving twice and have suggested that it be extended again. If Britain left, not only would they lose British contributions, but there is always a possibility that an independent Britain wouldn’t turn out to be a disaster no matter how hard the E.U. and the British establishment try to make it one. Once the penny drops that the E.U., like all other empires, is not only sustained by bluff but is also totally unnecessary, a massive gravy train disappears in a cloud of smoke up its own backside.

    As an example of the quality of the ‘Remain’ arguments being thrown about, the B.B.C. today reported that some bright spark in a position of note which escaped me since I laughed so hard has declared that if Britain left the E.U. it might not be able to import the scientists it needs! Why people aren’t embarrassed to spout that stuff in public baffles me.

    • Replies: @Kali
  2. Stogumber says:

    I’m a German, and when I read the headline I of course implied that Mr. Cockburn would speak also about an economical Cold War by the E.U. against Britain.
    Alas, he’s to one-sided and narrow-minded to do this.
    As a German, I think that E.U. sanctions against Britain will not be popular here.Things are completely different from the real Cold War when we had reasons to fear the Soviets. But we don’t fear the Brits – or at least we fear them no more than our own E.U. superiors.

  3. Kali says:
    @Rutger Spuds

    The globalists are desparate. They see their hegemony faultering and know that one Britain exits the EU, other member ststes will follow suit.
    So they blather and bluster, ramping up as much fear, confusion and anxiety as the can.
    And now that BoJo is un the chair they’re going into overdrive.
    Makes me laugh too. 😉

    • Replies: @dfordoom
  4. Freddo says:

    The kleptocrats in Brussels fear that if Brexit is not an outright disaster then other countries may follow. Greece is small enough that the local politicians can be bribed to stay in, but not so much for Spain and Italy. Hence unless Britain agrees to remain subservient the EU will not give a fair deal. Better to do a hard Brexit so the severance pay can be spend on useful activities.

  5. While Brexit may be rough on Britain (at least initially), it’s also worthwhile to ask what effect it will have on the EU. Britain, after all, is a net importer. Is Brussels really so vindictive that they’re willing to kiss one of their larger European markets goodbye completely? Especially while they’re already sanctioning Russia! Indeed, I could see it back-firing spectacularly against Brussels if they try to be too hard-line against the UK.

  6. Come on Brits. Show us how it’s done. Fuck the EU.

  7. dfordoom says: • Website
    @Kali

    The globalists are desparate. They see their hegemony faultering and know that one Britain exits the EU, other member ststes will follow suit

    I doubt it. Any other member states contemplating leaving will be looking at Britain’s current political chaos and will not be keen to experience that same chaos. The EU has achieved its objective – it has demonstrated that any state trying to leave will pay a heavy price.

  8. fenestol says:

    The UK Deep State knows how to handle Boris Johnson just as the US Deep State knows how to handle Trump. Brexit will suffer the same fate as the US Border Wall.

  9. Kali says:

    Agreed and disagreed:
    Certainly the states governments would prefer not to give the people the option to leave. However it’s my feeling that the people themselves will demand it.

    Europe is already in chaos. The people of Europe are being strangled by austerity, massive transfere if wealth from the poorest to the richest and mass immigration.
    And they’ve had enough.

    If Brexit doesn’t hapoen the Brits will revolt. If it does, the people of France, Greece, Italy et al, will demand the option to exit.

    • Replies: @Kali
  10. Kali says:
    @Kali

    Sorry, this was supposed to be @dfordoom

  11. Virgile says:

    Bojo wants the UK to become the ‘Israel’ of the European region, an intimate ally to the USA with lots of benefits. The USA will use the UK to put maximum pressure on the EU in order to destroy any of its ambition to compete with the USA.
    As the UK has been the main actor in demonizing Russia, the only clever action the EU should do is an immediate rapprochement with Russia that would make Trump and Bojo freak out.
    For the EU , Russia is a much lesser threat that a UK-USA coalition, quite the contrary. It is time for the EU, now free from anti-russia UK to show decisiveness and fight back!!!

  12. frankem51 says:

    Brexit has damaged the UK’s reputation as a place of sanity and stability. The entire resources of the government have been devoted to the Brexiteer’s policy of ‘cake-ism’ – of trying to work out how to have benefits of frictionless trade with the largest market in the world while also being able to strike free trade deals at will with the rest of the world. The Irish border question is just a metaphor for that problem with, as Cockburn points out, the added danger of destroying the Good Friday Agreement and the hard-won peace on the island of Ireland. The 16m who voted to remain in June 2016 – and whose numbers are now swollen by the arrival of young voters, who are all pro-EU, and the departure of old ones, who were Leavers — are having their faces ground down by a bunch of ideologues and charlatans – and there seems no end in sight!

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