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Gordon Brown, United States protectionism and the special relationship

Gordon Brown, the British Prime Minister, was in Washington D.C. this week, telling the Congress things that it likes to hear (how forward looking the United States is) and telling them a few things that on the whole it did not wish to hear. He also sent them a message about the so-called “special relationship” between Britain and the United States. He did not tell it that the present economic crisis originated in the United States though this is the case nor did he add that hence there is an obligation not to make the present situation worse by turning to protectionism. Nor did he tell them that he presided as Chancellor over the UK economy for several years leading up to this crisis. There is wobbly ground all around! What did Brown say and why?

Gordon Brown will be hosting the G20 economic summit in early April and this was one reason for him being in Washington D.C. The summit will discuss the global crisis and will attempt to find a coordinated basis for international action in the face of the recession. The UK economy is a very open economy and needs both imports and exports. Unlike countries in the euro zone it can adjust its economy by adjusting the exchange-rate which it can do indirectly by reducing the level of interest rates. It has just cut interest rates again. this is of course a kind of protectionism: it makes imports dearer and exports cheaper and this has itrritated those in the euro zone who do not have directly this policy option. He is keenly aware of the need for maintaining the international economy and is concerned about the move towards protectionism, already present in the Congress long before the last Presidential election. Monies voted for economic stimulus in the United States need to be politically seen to be helping directly the United States economy but a move to protectionism in the United States will be followed by vigorous protectionist policies in the rest of the world. If world trade is further cut, incomes will continue to fall and resources will move to inefficient rather than competitive production on a world-wide basis. Brown has been consistently calling for a global strategy. Unfortunately sentiment in the United States is moving against such a view whilst he is not in the strongest position to gain any leverage. Moral suasion is not a strong force, nor is Gordon Brown in a stong postion to call for it.

The other aim of his visit was to reinforce the “special relationship”, as Britain describes its foreign policy relationship with the United States. Since the 1950s Britain has looked at its foreign policy in terms of the Commonwealth (a loose association of states of the former Empire); Europe and the special relationship as America’s strongest ally. Most people in the United States know nothing of this relationship and Britain’s sensitivity about its significance looks odd. It is hard to see why the United States would wish to continue this relationship if, in Brown’s own understanding, Europe has the most consistent pro-American leadership in years. If the chances of multilateral cooperation because of a new administration are great, why would the United States need Britain? Of course, the United States could squander this chance by becoming protectionist and the squabbling between Europe and the United States could become intense. I wonder where Britain would be in that context. The United States wants a Europe that it can talk directly with but thus far this is not really available given the rejection of the constitutional proposals.

The ending of intense periods of globalization in the past has been fraught. The war in Afghanistan is moving against the United States and its allies and Britain is significant here. Britain is still needed. The Russian economy is in turmoil and it is not clear when or how the economic situation will impact on political stability there. Eastern Europe is in significant danger of economic collapse. Economic crisis soon becomes political crisis. Who knows what might happen next and who will need what kind of relationship and with whom? Britain should stop posturing about its “special relationship” with the United States. Brown should concentrate on making the G20 meeting effective by whatever cooperative means, particularly within Europe, he has at his disposal. Brown cannot prevent the United States turning to protectionism, but a firm line from all European leaders working together might.