Category Archives: Trump and US Foreign Policy

The UK will get a US free trade deal–but Trump will drive a hard bargain

By Dr. John C. Hulsman and James Frayne

Back in 1783, when Britain signed a trade deal with the fledgling United States as part of the Treaty of Paris which concluded the revolutionary war, the world-class British delegation was infinitely more experienced and better prepared than their novice American counterparts.

Sadly, this is not the case today. Fast forward 234 years and Britain’s negotiators will be walking into the room to do a new and even more important trade deal with Washington with even less experience than the Americans had at the end of the eighteenth century.

Given Britain is about to enter into an era-defining commercial agreement with the world’s leading power, it is extraordinary that the process is not already a central part of the national conversation. For the agreement will have a major impact not only on the national finances but also on the structure of the economy and the key sectors within it. We believe that an agreement will be for the good for both countries – particularly the UK – but some turbulence is inevitable.

It might be years until pen is put to paper. But the contours of the deal will likely be apparent in the coming year. President Trump will arrive here in October as a recognised deal-maker and as someone with historic affection for these islands. Things might move very quickly, for there is certainly great enthusiasm for such a deal within the ruling Republican Party.

It is hard from abroad to fathom just how in charge the Republicans presently are—they control the presidency, (soon) the Supreme Court, the House of Representatives and the Senate, the governorships and the localities–and also how keen they are to reach a deal with the UK. The Republican party has long had major elements deeply suspicious of the EU, and closely tied at the same time to the Special Relationship.

As such, the US-UK trade deal is a no brainer geopolitically for much of the party. When the hard commercial fact is added that the US is the largest source of foreign direct investment (FDI) to Britain and vice versa, the deal becomes the easiest of sells, even in a newly protectionist America.

Contrary to the fearmongering nonsense of David Cameron, George Osborne, and the last days of the Obama administration, Britain will not be at the back of the queue for doing trade deals with America. Instead, as the president has heavily implied, it will be at the front. He is backed in this by House Speaker Paul Ryan, and Senate Majority Leader Mitch McConnell, both strong Anglophiles.

But it’ll be the content that defines the agreement, which could have a significant impact on specific parts of the economy. For Britain, the sectors likely to be most affected are those in which US firms are the strongest and where US firms have the most to gain because of the size of the UK market.

Financial services is the most obvious area. The UK finance market is vast and already well known to American firms. Other areas likely to be impacted include healthcare and pharmaceuticals, aerospace, tech, agriculture and food production, and of course consumer goods.

In the case of financial services, there has been speculation in the US media that any deal might require the UK to basically accept the US regulatory structure wholesale. There have also been suggestions that the NHS might need to be opened up to US firms and that food standards might need to be changed to accommodate US practices.

Such reports need to be treated with healthy scepticism: scaremongering by opponents of Brexit and opponents of free trade will deliberately highlight any potential negatives. Equally, major (and positive) changes to the UK economy will surely follow from the deal as British consumers enjoy cheaper goods and firms are better able to compete on their merits in the enormous American market.

The British Government will also soon be formulating its view on the best approach for these key sectors. It will be particularly keen to protect the City and the lobby groups of other key industries will pile on the pressure to ensure the Government does not leave them exposed. It will be mindful too of public opinion, above all on sensitive areas like healthcare. Nobody can mess with the NHS.

But let us be honest: while both will gain economically from the arrangement, Britain needs this deal more than the US. We will go into these negotiations as the closest of friends and we will leave as the closest of friends. Without a deal, however, Britain’s economic viability outside the EU will be questioned. With that in mind, US negotiators will drive a hard bargain. As the adage goes, Americans talk like hippies but act like gangsters.

Dr John C Hulsman is senior columnist at City AM, a life member of the Council on Foreign Relations, and president of John C. Hulsman Enterprises. James Frayne is director of public opinion specialists Public First. They are launching a joint research project to examine the impact of a UK-US trade deal.

Trump’s surprisingly positive foreign policy–and some unanswered questions

Despite a surprisingly upbeat and coherent first address to Congress on February 28th, given these polarised times it is highly unlikely Donald Trump changed anyone’s mind. Those who rather fanatically support him will have found nothing particularly objectionable with what he said. Those who rather fanatically oppose him will have heard nothing to alter their opinion, either. This is both the political strength and the weakness of the man who first sensed—and then supremely capitalised on—the canyon-like divisions lying submerged just beneath the surface of American life.

The speech isn’t the problem

The power of persuasion–already dying when the supposedly great orator Barack Obama failed to bring a single congressional Republican with him over his signature Health Care initiative—is dangerously just not a part of American politics anymore. Battle lines are drawn and compromise in any form is out, a dolorous development which would have horrified the country’s founders, wise men who crafted a wondrously enduring system based precisely on the notion of political give and take.

This is perhaps America’s great secret to success, constitutional stability (having one republic to France’s five) allowing for the great economic prosperity that has followed. Watching the Democrats studiously not clap for a trillion-dollar infrastructure initiative that the left of their party has been calling for over many years is a striking example of the death of policy discourse in American life, and the dangerous rise of tribalism. It simply does not matter what Trump says; the Democrats will fanatically oppose it (and vice-versa). This is the whirlwind Trump’s revolution is reaping.

People are foreign policy

However, contrary to all our fears, there has been a lot to commend the first moves of the Trump White House over foreign policy. As I know well from my many days in Washington, actual people make policy and to some extent are policy. In selecting the highly-capable General James Mattis to run the Defence Department and in picking the innovative General H.R. McMaster to run the National Security Council (after the brief, but disastrous General Michael Flynn detour), President Trump has put in place a creative, realist national security team that George H.W. Bush would be comfortable with. The huge question remains whether the highly mercurial and intellectually unformed president will actually heed their advice.

Worse, he might actually grow weary of the real-world restraints they make clear to him in conducting American foreign policy and fire them. There is no better analytical canary in the coal mine for the future of American foreign policy than this; what is the bureaucratic fate of the undeniably able national security team Trump has assembled? Following their personal fates will go a long way in tracing the new trajectory of American foreign policy itself.

So far, so good

Yet on his own over this past month, President Trump has managed to succeed in doing two seemingly contradictorily but useful big things; he has questioned the tired, old shibboleths of American foreign policy, even as he re-affirmed of number of their basic precepts. This has finally moved the intellectual clock, as it has been stuck for two decades, a desperately needed innovation, as the Cold War has long been over and it is well past time for intellectual thinking over foreign policy to catch up.

For whatever the policy conclusions, it is well past time both foreign policy opinion-formers and decision-makers treat their craft as more than a dreary recitation of a policy catechism that made great sense in the far-away Cold War, but—following the elite being discredited over both Iraq and the Lehman global recession—makes far less natural sense now.

Does the One-China policy actually serve American interests today? Is NATO obsolete, and what can possibly explain the European allies’ shameful strategic free riding to the detriment of the hard-pressed American public? Does the two-state solution, after all these many years of failure, actually stand any hope at all of success? I must admit (and I am no friend of the president) that before Donald Trump came on the scene, when I raised these very points I was rather arrogantly waived away by a sclerotic, discredited (though amazingly they don’t seem to know it) foreign policy elite in favour of the received wisdom of a bygone age. To put it mildly, that is no longer the case.

Yet the new foreign policy team also seems to have so far constrained the mercurial president from throwing the policy baby out with the bathwater. During his speech to Congress (and in earlier addresses to European leaders by Vice President Mike Pence and Secretary of Defence Mattis) Trump made it clear he still is committed to NATO, but it is past time the allies meet the long-agreed two percent of GDP spending target for the common defence.

Trump and Mattis are merely repeating the truism I have long argued for, that continued failure to do so is a European choice, which will ultimately signal the end of the most successful military alliance in history. Trump is not wrong to bring this up; it is the European allies who are wrong to continue to free-ride on the backs of the American people.

Likewise, in his call to Chinese leader Xi Jinping, President Trump reaffirmed the American commitment to the One China policy, which he had previously flirted with doing away with. But while the American horse is back in the stable, in questioning this long-held shibboleth, Trump has made it crystal clear to a surging Beijing that a tougher, less predictable America awaits it.

Given the advances in Chinese adventurism during the time of Barack Obama, in constructing and militarising islands in the South China Sea, such an approach has a lot to commend it, perhaps leading to Beijing’s resumption of its earlier, less reckless foreign policy, inaugurated by Deng Xiaoping.

And finally, if ever there was a policy that needed a creative update it must be efforts to successfully conclude the endless Palestinian-Israeli standoff. By calling the never-achieved two-state solution into question, the Trump White House makes is clear that in terms of geo-strategy this stalemate has eaten up vast amounts of American time and effort over the past decades, while frankly more important issues (such as the rise of China and India and the advent of the multipolar world itself) have been fecklessly neglected.

And yet….

And yet for all this good news, there remains deep unease for many of us who have been pleasantly surprised in terms of foreign policy by the first month of the new, startling era of Donald Trump. First, there is the grave damage he may still do domestically and to the American constitutional system more broadly. Second, as a man who seems to decide things more by untutored instinct than deep thought, even when President Trump is right, there should be deep concern about how set in stone his new foreign policy actually is.

It is this fear of the erratic behaviour of the United States, that the world’s ordering power will lapse into incoherence, that rightly worries all those of us who wish America well. In both his opening speech to Congress and in his first month in office over foreign policy, President Trump has surprised for the better. But there remains an awfully long way to go.

Published in Aspenia online, March 1, 2017.

America would gain nothing from cosying up to Putin’s declining Russia

It has been three years since Russia’s stunning annexation of Crimea. It is the worst kept secret in Washington that the new administration of Donald Trump would like to turn the page on the US-Russian hostility that followed, in a transactional effort to remake US foreign policy.

At the heart of Trump’s Jacksonian nationalism is his transactional view of the world, a state of mind that is confounding allies and enemies alike. Unsentimental in the extreme, the President is singularly unimpressed by alliances in both Europe and Asia (held in almost sacred awe by the discredited America foreign policy establishment) that he senses may be past their sell-by dates if they don’t deliver in terms of immediate American interests.

In the same vein, the Trump White House has not let a long history of US-Russian bad blood get in the way of his desire to pursue closer ties with Vladimir Putin’s Russia, if doing so—and despite Putin’s well-deserved reputation for thuggery—serves American goals. And oddly enough–for all that readers of this column know I am no friend of the current President–I have absolutely no problem with his more transactional approach to foreign policy, as it amounts to a breath of fresh air, rightly questioning intellectual sacred cows that ought really to have been thought through again following the debacle of the Iraq war.

The problem with President Trump’s outreach to Russia is not that he is attempting to work with a far from savoury (alright let’s admit it, Putin is my favourite Bond villain) partner to further American interests; it’s that he will receive almost nothing for his bold efforts. And getting a good deal– which is largely the basis of Trump’s popularity and narrative—is, after all, the point of the whole exercise.

But what does America get from such a shift in its foreign policy? ISIS is already on its last legs, with Mosul in Iraq—by far the largest city the caliphate controls—set to fall later this year. Its capital (Raqqa in Syria) will surely be next. The key strategic point remains what it has always been: in both Iraq and Syria disaffected Sunnis must be included in the governing process, or there will surely be another—and perhaps even more hideous—vampire-like rising of radical Sunni Islam, following on from Al-Qaeda in Iraq and ISIS. And absolutely none of this is affected in any material way by whether Trump and Putin reach an understanding or not.

Nor is there an obvious economic reward flowing on from a rapprochement with the Kremlin, as there would be say, if Trump and Xi Jinping (another strongman nationalist) reached a broad accord. Russia is an aging, corrupt gas station with nuclear weapons, with its economy wholly precariously tethered to the spot price of oil and natural gas. Russia’s economy is merely the size of Texas. The country is a great power in decline, not one on the rise. There is simply no economic pot of gold at the end of the rainbow for Trump here, either.

As for Russia and the US more broadly sharing intelligence and in some sort of coordinated way working together to combat global terrorism, that will happen in any event, if it suits the eminently rational Putin’s interests, and will not happen if it does not. Reaching a Grand Bargain has nothing to do with what amounts to a rational second order decision the Kremlin will make, based on an evaluation of its own interests.

So, closer ties with Putin does not dramatically change the facts on the ground over ISIS in Syria, facilitate a new economic renaissance for the US (as such a deal with China or, better, India, would do), or cement a joint front in the global war against terror. In other words, at the end of Trump’s transactional approach to Russia, there’s nothing there. In hard-headed realist terms, there simply is no deal available that makes calling NATO into question, or abandoning with the embattled (but getting better) Ukrainian government of President Poroshenko, worth it.

For on its own self-interested terms, this dreamed-of alliance simply makes no sense, in terms of America’s basic interests. A declining Russia simply does not offer the US anything remotely strategically attractive enough to ignore Russian adventurism in Crimea and eastern Ukraine. By all means, let’s move away from the gormless era when American neoconservatives and liberal hawks fought wars that had almost nothing to do with direct American interests. But any cursory glance at those interests means that this putative deal is merely intellectual fool’s gold.

Published in City AM London, February 27, 2017