How a Post-Brexit Trade Deal Between the US and the UK Could Affect Climate Change Commitments
With the UK having finally left the European Union on the 31st of January 2020, the door is now open for Boris Johnson and his cabinet to strike independent trade deals with other nations. Negotiations have already begun with the most important of these future trading partners, the United States. However, with a President who denies Climate Change at the head of the United States’ trading team, this could have significant impacts on the UK’s climate change commitments.
The UK’s Commitments
In Boris Johnson’s speech following his Conservative Party’s election victory in December, Johnson proclaimed that the UK would become the “cleanest, greenest country on Earth” and reiterated his support for his predecessors promise that the UK would become carbon neutral by 2050. This would ensure that over the course of thirty years, the UK would eventually achieve a zero carbon footprint.
Not only has the UK put its support behind tackling one of the greatest problems of modern times, but it has also taken a leading role, with Glasgow set to host the UN’s COP 26 conference in November of this year. Early policy initiatives are looking promising with the government agreeing to spend up to £1 billion to encourage the use of electric vehicles, £222 million for research into nuclear fusion and £26 million for carbon capture technology. However, there is a large issue that could curtail Johnson and his government’s pledge to tackle global warming.
UK-US Trade Talks
The US is the UK’s second largest source of imports with $125.9 billion worth of goods and services imported last year, and it is also the UK’s largest export market with the UK exporting goods and services valued at $110 billion in 2019. These raw figures as well as the so called ‘special relationship’ between the nations countries show that a trade deal is imperative. These numbers also show that the UK is more reliant on the United States, and combined with their recent departure from the EU, this will put the UK on a weaker footing during negotiations.
Trump’s bullish nature when it comes to negotiations will solidify this, and the early demands made by the United States, could thus spell trouble. Leaked documents show that the US team have said “climate change is the most political question for the US, and that it is a lightning rod issue.” The documents go onto say that “as of 2015, USTR are bound by Congress not to include mention of greenhouse gas emission reductions in trade agreements and that this ban would not be lifted anytime soon.” These emphatically state that the United States trade team is banning consideration of climate change in the trade deal discussions, which could have significant impacts on the UK’s commitments.
Impacts on the UK’s Commitments
The most immediate danger is the collapse of environmental and climate regulations: with almost 80% of the UK’s regulations emanating from the EU. Whilst this may seem like an opportunity for the UK to diverge from EU laws and make them more stringent, the US’s strong position and desire to avoid the subject of climate change entirely could mean the UK’s regulations could become considerably weaker. As Nick Dearden, Director of Global Justice Now, claims, “the massive US fossil fuel industry will bully and threaten the British government over its climate policy. This will lock in climate devastation and undermine any promises Johnson makes on environmental protection.” This undermining could mean the UK signs away the right to preserve ecosystems, intervene to support a struggling domestic renewables industry or perhaps most importantly, curb carbon emissions. These are all fundamental to ensuring the UK is able to become carbon neutral by 2050.
If one were to take the less skeptical view and proceed with the argument that the UK will be able to hold its own at the negotiating table, there remains another obstacle in its way. The investor-state dispute settlement mechanism (ISDS) allows investors to sue countries for discriminatory practices. According to data compiled by the U.N Conference on Trade and Development, roughly 40% of international arbitration cases initiated by investors related to environmental and energy issues. This could mean that any measures the UK does take in ensuring global warming is addressed, could be eradicated by individual parties who believe their business has been unfairly targeted by such measures. This mechanism is likely to be enshrined in any deal with the recent US-Mexico-Canada agreement allowing ISDS rules to be deployed for the oil and gas industry. Most importantly, it also appears in the leaked dossier referred to earlier in the article. With these industries by far and away the greatest producers of fossil fuels, any mechanism like this would have great ramifications for the UK’s commitments.
Takeaway
With the UK now seeking an independent trade with the US, it enters negotiations in a weaker position. This will allow President Trump, who denies climate change, and his team, who want climate change off of the negotiating table, to control proceedings. This will limit the UK’s ability to dictate its own climate change regulations with its largest trading partner, severely hampering Boris Johnson’s commitment to becoming carbon neutral by 2050.
Sources:
https://www.globaljustice.org.uk/news/2019/nov/27/leaked-papers-us-uk-trade-talks-guide-revelations
https://newrepublic.com/article/156240/new-us-trade-deal-climate-sabotage
https://www.theguardian.com/politics/2019/dec/21/us-bans-mention-of-climate-in-uk-trade-talks