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The British Problem Facing a Transatlantic Trade Deal

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The British Government needs a transatlantic trade deal to show the European Union works for Britain, but not only could British threats to leave the E.U. scupper the deal, a successful transatlantic deal could also weaken Britain's commitment to the EU. Britain's dilemma could weaken transatlantic relations.

For successive British governments a deal opening up further the transatlantic marketplace has proved an elusive one. With the U.S.A. and Europe as Britain's main economic partners, even a small deal could produce significant gains for Britain's economy.

Today the Transatlantic Trade and Investment Partnership (T.T.I.P.) offers hopes for the U.K. For both sides of the Atlantic it promises desperately needed economic growth and a much sought after geopolitical means for the West to face the rise of new powers. Despite T.T.I.P. being the largest bilateral trade deal ever attempted, negotiations aim to conclude by the end of 2014.

But progress has already run into problems. While delays from the U.S. government shut down can be made up, other obstacles are emerging from concerns pushed by agricultural, cultural and social interest groups. The 2014 European Parliament elections look set to produce a Parliament less sympathetic to either the E.U. or a transatlantic deal. And it remains to be seen whether the U.S. Congress can sustain bipartisan support.

British Problems for T.T.I.P.

For Britain's current coalition government T.T.I.P. offers the chance to show how Britain's membership of the E.U. works for the country. For Britain the E.U. has always been more of a means to an end of trade and security, and much less so the E.U.'s founding political ideal of 'ever closer union'. By joining with the rest of the E.U. the U.K. faces the U.S.A. as an economic equal, not the junior partner in a deep and important but inherently imbalanced 'special relationship'. A trade deal also plays well with the current government's aim for export led growth.

Britain is also central to T.T.I.P., thanks not only to its large trade and investment links with both sides, but also because of its central place in transatlantic geopolitical thinking. As a country that puts great effort into maintaining close relations between the two sides of the Atlantic, T.T.I.P. would aid Britain's long-standing aim of closer relations between the two.

Despite this, T.T.I.P. negotiations are haunted by the possibility the U.K. could quit the E.U. The possibility of this happening has increased in part thanks to Prime Minister David Cameron's commitment that should his Conservative Party win the next general election it will seek a renegotiated UK membership followed by an in-out referendum.

Doubts remain as to whether the U.K. will ever face such a referendum, and even Cameron's plans would not unfold until 2015-2017. With T.T.I.P. negotiations scheduled to be wrapped up by the end of 2014 some may wonder what the problem is.

The possibility of an earlier referendum (to say nothing of implications from the September 2014 Scottish independence referendum) cannot be ruled out, especially if the 2014 European Parliament elections produce a landslide result for the deeply-Eurosceptic United Kingdom Independence Party. If T.T.I.P. negotiations are delayed into 2015 then they could become caught up by a British general election, also occasionally suggested as an earlier date for a referendum.

While T.T.I.P. without the U.K. would not be impossible, it would be more difficult and a lesser deal if secured. The survival of T.T.I.P. could become a bargaining chip in the U.K.'s negotiations with the E.U.

T.T.I.P. Problems for Britain

At the same time, a collapse or significant delay of T.T.I.P. negotiations caused by one or more of Britain's E.U. partners, would fuel British Eurosceptic calls for the U.K. to quit the E.U.. Eurosceptics have long argued the E.U. holds Britain back from negotiating its own trade deal with the U.S.A. and other allies.

But there's a twist. T.T.I.P. is likely to weaken Britain's economic relationship with Europe in favor of its already strong transatlantic relations. While other E.U. states would also experience this, their political commitment to European unity is not reflected in the U.K. where, at least in public debate, the economic dimension has always come first. For British Eurosceptics a weakened U.K.-E.U. economic relationship helps ease the way for a U.K. exit.

Shared Problems for the U.S.A., Europe and Britain

For the EU, T.T.I.P. could be become a bargaining chip used by the U.K. to leverage a renegotiated U.K.-E.U. relationship. At the same time, it could push further towards the exit one of its largest member states and one central to transatlantic relations.

For the U.S.A., it would be difficult to imagine a T.T.I.P. without the U.K. It would certainly make T.T.I.P. a more difficult sell to Congress. A U.K. exit from the E.U. would also leave the U.S.A. facing an E.U. changed by the disappearance of one of its most liberal, free trade members.

More damaging for all involved, especially the UK, would be the weakening - or dashing - of hopes T.T.I.P. could provide a stronger geopolitical relationship between the two core parts of the West. Weakening the two relationships it has relied so heavily upon would be a spectacular home-goal for the U.K. But can the rest of the E.U. and the U.S.A. bank on the U.K. not doing so?