The Side of a Bus

Jun 10, 2019

Sunday Business Post, 9 June 2019 
The French philosopher Roland Barthes spent perhaps more time than is good for anyone looking at advertisements.  Some sixty years ago he was trying to understand and explain what parts of an advertisement (he focused on an ad for pasta) made consumers want to go and buy the item.  Barthes analysed the particular details in the advertising campaign that seemed to catch peoples’ attention and imagination, whether they fully realised it or not. 

It sometimes happens that a particular word or phrase captures the public imagination for a particular reason that is hard to define.  We all want something that does exactly what it says on the tin, even though no one recognised the power of that phrase until it was used by Ronseal.  The current US president has a particular knack for the comment that grabs attention.  Donald Trump's apparently careless observation this week that a future US/UK trade deal might encompass the British National Health Service (NHS) may change the British political discourse quite dramatically.  That’s despite his seeming to row back on the matter subsequently.

Thanks to Trump’s comments during his UK State visit this week, trade deals have ceased to be unequivocally good things in many people’s minds.  His reference to the NHS has prompted serious consideration of what might have to be given away.  Would the UK have to surrender more trade control and autonomy than it already has done by virtue of EU single market and customs union membership?

Usually trade deals are regarded as arrangements between countries which suspend or mitigate tariffs and other controls on goods crossing the borders between parties to the deal.  The acme of trade deals almost anywhere in the world is the trade deal among countries of the EU.  The EU treaties permit the flow of almost all goods (and many services) without hindrance across borders. 

Trade deals however often also mandate governments to make contracts for goods and services available for tender to foreign suppliers in trading partner countries.  That is why many Irish government tenders must be open to suppliers and contractors within the EU, and not just Ireland.  Donald Trump's off-the-cuff remark about the British NHS raised the hare that the future trade deal between the US and the UK might involve US businesses tendering successfully for fulfilment of British government health service contracts.  No wonder politicians and commentators on the other side of the Irish Sea got so antsy about it.

In February of this year, the US authorities published specific trade negotiating objectives for a future deal with Britain.  The policy statement notes that the British decision to leave the EU creates a new opportunity to “expand and deepen the US – UK trade relationship”.  However it also notes that there should be exceptions for some types of government procurement and those exceptions should include procurement to protect human health. 

That would seem to suggest that American goods and services providers would not necessarily have automatic access to the coffers of the NHS in the future.  So far so good.  However British observers have plenty of other grounds to be worried over the shape of a future transatlantic trade deal. 

It is clear that the Americans are committed to concluding any negotiations with “timely and substantive results” for their own consumers, businesses, farmers, ranchers and workers “consistent with US priorities”.  Even if areas such as healthcare are excluded from a deal, the aspiration is that American business should have significant opportunities to avail of British government contracts.  There will be no free ride for British industry when it is outside of the EU tent.

What could be of even wider concern is that an official document setting out priorities for negotiations between America and Europe was published last January, just a month before the US/UK objectives were published.  The documents are almost identical.  It seems that all else being equal, the American starting position is that they have no particular reason to grant Britain any special deal over and above what could be achieved with the EU.  Yet all else is far from equal.  According to the US authorities, two way trade between the EU and the US amounts to $1.1trillion per annum; two way trade between the EU and the UK is less than a quarter of that amount.

The realisation may be dawning within the British political establishment that trade negotiations will be tougher from being outside the EU than being from within.  If that is so, it is due to Trump’s Barthes-like use of the NHS as the item that catches the attention. 

Just as the Brexiteers did three years ago when they promised more funding for the NHS on the side of their infamous campaign bus.

Dr Brian Keegan is Director of Public Policy and Taxation at Chartered Accountants Ireland