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Britain's balancing act

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Brexit has the government turning to the US, but that may be tough with Trump at the helm

To paraphrase a former US secretary of state, Britain has lost a community but not yet found a friend.

That the island is adrift became even clearer last week, as British officials made little progress in their third round of talks over the best way to exit the European Union (EU).

While negotiators wait to get the preliminaries out of the way so substantive talks can begin, the real question may be how much more dependent has Brexit made the United Kingdom on the United States.

British leaders know they must build trade alliances, and British Prime Minister Theresa May's government is trying.

She went to Japan last week to press for a bilateral agreement along the lines of the trade treaty Japan is about to sign with the EU, but Japanese leaders are cautious, delaying discussions until Britain's position becomes clearer.

For the UK government, the US is the obvious - and perhaps the only - port in a storm that may engulf the British economy. The US is Britain's largest single trading partner, with trade between the two countries worth around US$230 billion (S$312 billion) annually and investment in each other's economies amounting to US$1 trillion.

In US President Donald Trump, the Brexiteers have an apparently ideal and strong ally - Mr Trump has commended a prospective accord as "very big and exciting" while condemning the EU as "very protectionist with the US".

The May government is thus respectful towards its big friend.

Mrs May was the first leader to meet Mr Trump after his inauguration and - unlike the chilly encounter between Mr Trump and German Chancellor Angela Merkel - she appeared to enjoy the session.

The Cabinet follows the same line. The mercurial Foreign Secretary Boris Johnson, who once quipped he would not go to New York for fear of meeting Mr Trump, has since been ardent in his praise, saying Mr Trump has "gripped the imagination of people around the world".

The US wants access to the UK market, most of all for the export of food, but there are two problems.

American chickens are washed with chlorine, a process the EU regards as a reason for keeping them at bay. And much of the US grain sent to the UK will be genetically modified - another disagreement with the Union.

Should these products be admitted into the UK, the protests from British farmers and environmentalists will be loud, long and damaging to any trade pact between the UK and the EU.

A further complication is Mr Trump's international isolation and unpopularity. Even Mrs May was moved to protest his "many-sides-to-blame" comments after a Charlottesville white supremacist march left a counter-protester dead.

A state visit, planned for this year, is likely to be postponed after Mr Trump told Mrs May he does not want to make the trip if mass demonstrations are expected.

On the European side, the UK's Brexit secretary, Mr David Davis, is locking horns with Mr Michel Barnier, the EU's chief negotiator.

It is clear the EU will present a united front, with all 27 other members agreeing to back Mr Barnier.

The 27 will be unyielding, demanding a "divorce settlement" as high as €100 billion (S$161 billion), together with a pledge that EU citizens living in the UK for at least five years gain permanent residence.

Mr Barnier warned that the latest talks yielded "no decisive progress on the main subjects", while the UK negotiators said progress has been made but is impeded by an over-rigid approach from the EU.

Ms Merkel and French President Emmanuel Macron seem committed to regenerate the Franco-German motor for the EU, pushing towards greater integration and even the appointment of a eurozone finance minister.

Ms Merkel, with the whip hand of a healthy economy, is more cautious and will make further movement dependent on radical change in France - especially in reforms to the labour market.

The future of a Franco-German EU depends largely on Mr Macron's domestic success.

Though couched in technocratic language, integration will be a huge political leap - the substitution of centralised economic decision-making overriding national priorities, carving deep into what has so far remained largely the prerogative of sovereign legislatures.

If it does not succeed, the EU must come to terms with a reality that dictates the continuation of sovereign national states - willing to collaborate on trade and other issues such as security and defence but not to attempt the building of supranational political institutions. - REUTERS

The writer co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, 
where he is senior research fellow.

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