Friday, January 5, 2018

'Go it alone' – Brexit, ExitUS, Statoil – a dangerous policy


“Go it alone” is becoming the political policy of our times. It can be dangerous and costly.

The best known case is the decision of the United Kingdom to quit the EU, a move known as Brexit. A majority of UK referendum voters decided that their country could achieve to its former glory as a world power while ridding itself of immigrants the EU deal forced it to accept.

The Brits were promised they would get almost all of the EU benefits without the cost of membership or the immigrants. In fact, the EU savings would cover needed improvements to the national health program. And the UK was such a valuable trading partner, it would be able to dominate the exit negotiations with the EU.

While the UK government opposed Brexit and knew those promises couldn't be kept, it campaigned poorly, and Brexit carried the day.

Things are not quite working out as promised. Britain will have to pay tens of billions to leave. The EU won't give it nearly as good a trade deal as the EU insiders. There are big problems with Ireland, which remains in the EU and currently, as part of the Irish peace deal, has no trade border with Britain.

The UK's principal port is actually Rotterdam in the Netherlands. Workers are leaving the UK and now there's a nurse shortage there. Major international banks are moving out. “Go it alone” looks less rosy, but nobody yet has stepped up to try to reverse Brexit.

Brexit looks like a bad mistake for the Brits. The U.S. would never adopt “go it alone” like that.

Except that President Trump has done it many times over. You might call the policy “ExitUS,” which sounds like “exodus.”

Because of his misguided and partial understanding of the Paris environment agreement, he has made the US the only country in the world to quit it and remain outside. If there's an international agreement that every country can accept, it probably isn't all that tough. But the US is out.

What about the NAFTA agreement with Canada and Mexico? The US has received a bad deal, Trump says, and that settles the matter. He refuses to acknowledge that the US runs a positive trade balance with Canada and insists there's a deficit. When Canadian Prime Minister Trudeau corrected him, he implied Trudeau shaded the truth.

At the NATO summit meeting, Trump had difficulty convincing others that the US would keep its mutual defense commitments. He topped that off by rudely pushing aside, without the slightest acknowledgment, the Prime Minister of Montenegro.

International relations are complicated and interconnected. Harm me now, a country can say, but don't expect my help later.

The US was desperate for support at the UN opposing a resolution against the decision to move the American embassy in Israel to Jerusalem. Out of almost 200 votes, it received 9, from small, dependent countries. The US did not get the votes of Canada and Montenegro.

Under Gov. Paul LePage, who some see as Maine's mini-Trump, “go it alone” has also been a central policy with negative results.

Statoil, a Norwegian energy company, sought to build a major wind farm off the coast of Maine. According to the Forbes survey, Statoil annually ranks high among the largest 500 corporations in the world. It received the necessary approvals and, according to knowledgeable people, was in line to get major federal support.

LePage, engaging in a bit of legislative blackmail, got the Legislature to reopen the process so the state could switch from Statoil to backing a University of Maine project. This is pure “go it alone” with the usual adder of patriotic boosterism.

It didn't work. UMO did not get the big federal grant. Statoil decamped for the UK, where it built a large fleet of floating wind generators, the first such major commercial generation. That could have been Maine.

What is most important is that “open for business” Maine pulled the rug on one of the largest corporations in the world. How many other such outfits are likely to consider Maine in the future? The LePage switch probably will cost for decades.

It would be fair to ask candidates for governor this year how they voted or would have voted on the Statoil switch.

“Go it alone” may make people feel better, but it can produce dangerous and long-term results. Acting in isolation may have been possible in simpler times, but it is not a workable solution in today's more complex and interconnected world.

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