Bush, Mulroney Should Embrace Thatcher

Stephen C. Meyer
Reprinted from the Wall Street Journal Europe, September 22-23, 1989 abridged version published in The Wall Street Journal (U.S.), September 25, 1989

Just six months ago on the eve of her 10th anniversary in office British Prime Minister Margaret Thatcher seemed invincible. Today she looks politically vulnerable and there is something that Mr. Bush and Mr. Mulroney of Canada could-and should-do to help.

Mrs. Thatcher's political isolation has come about in part because of her dispute with European unificationists over the extent to which Britain must relinquish its sovereignty in order to participate in the Single European Market (SEM). British Conservative Party losses in the June election for the European parliament and Mrs. Thatcher's decline in subsequent opinion polls both attest to the damage done to her position by the European issue.

Mrs. Thatcher's problem, apart from appearing outnumbered, derives from her opponents' success at obscuring the distinction between free trade and national sovereignty. Unificationists such as former Prime Minister Edward Heath and European Commission President Mr. Jacque Delors have so far convinced the British public that it can't trade more openly with Europe without also accepting the dictation of internal British policy from the European bureaucracy, parliament, and courts. Mrs. Thatcher's political future and the future of an independent Britain may well depend on her ability to divorce the issue of free trade which she favors, from the issue of diminished sovereignty, which she does not. With Mr. Delors pressing for the European Community (EC) to assume "80 per cent of economic legislation, and perhaps even fiscal and social legislation" within a decade and with a British general election expected to occur just before the implementation of the Single European Market (SEM) in 1992, Mrs. Thatcher hasn't much time to get her point across.

Multiple Advantages

Given both the Prime Minister's steadfast support for North American interests and the unilateralist tendencies of the British opposition, President Bush and Prime Minister Mulroney might well hope that she does make her point. As it happens, there is something they could do to shift the terms of the debate in her favor and in the process give her a trump card to protect against the erosion of British sovereignty. Mr. Bush and Mr. Mulroney should invite the United Kingdom to enter the recently ratified free trade agreement between Ottowa and Washington. Such a proposal would have several beneficial consequences.

First, the inclusion of Britain in the current North American trade agreement would create a more favorable economic climate for all three countries. The advantages of free-trade that have made the SEM so attractive to Europeans-access to new products, markets and raw materials, labor market mobility, enhanced competitiveness, and lower consumer prices-would also commend the idea of a North Atlantic Free Trade Area (NAFTA) to the three potential partners. The inclusion of another 60 million people in the American-Canadian pact will multiply the advantages inherent in the current bi-lateral arrangement and create a single North Atlantic market roughly equal to the SEM in population and GNP.

With North American industries increasingly worried about being "locked out" of "Fortress Europe" after 1992, Mr. Bush and Mr. Mulroney might well wish to secure a special arrangement with important member states such as Britain in advance. A formal Canadian-American trade agreement with Britain would ensure that North American companies could maintain a vital link not only with Britain, but via Britain, with the rest of Europe. Greater access to European markets made available through the new pact would go a long way toward selling the idea to an American Congress worried about U.S. trade deficits. The Canadians might particularly welcome the inclusion of Britain as a means of diluting the American presence and assuaging voter fears of U. S. "economic annexation." For Britain's part, freer access to a market of 250 million prosperous and English-speaking people could give a needed boost to its manufacturing and marketing interests. A closer formal relationship with the geographically vast North American countries might also prove to be an important asset in the event of a Hong Kong immigration crisis in 1997.

Secondly, the offer would give Mrs. Thatcher leverage in her battle to resist the loss of British autonomy to a politically unified Europe. An offer to include Britain in the North American agreement would dramatize the difference between a beneficial trading relationship based upon the mutual respect of national sovereignty, and a semi-statist drive for political amalgamation that threatens the power of local and national legislatures. EC attempts in recent months to extend its authority over everything from cigarette labels, and management practices, to minimum wage laws and tax rates, compare unfavorably with the less heavy-handed North American agreement-the administration of which requires no separate parliament or judiciary and no pan-national bureaucracy. Neither does the North American approach envision the creation of a common currency or an independent central bank. Instead, it assumes each nation will continue to regulate its own industry, levy its own taxes and formulate its own economic policy. In short, it implies no present or future renunciation of sovereignty.

A joint Canadian-American invitation to join this agreement would enable Mrs. Thatcher to test European intentions prior to 1992. In the worst case, if Britain entered into a separate agreement with the U.S. and Canada, moves might be made within the EC to deny Britain membership in the SEM. If, however, the SEM is primarily concerned to promote free trade, as even most unificationists claim, then there should be no reason to expel member states that enter into separate trade pacts with other nations. Indeed, the precedent established by an Anglo-North American pact might encourage other European governments with reservations about political unification such as the Dutch and Danish to make separate deals with friendly non-European states. In any case, giving Mrs. Thatcher another offer will enable her to demand that the "eurocracy" either cease promulgating regulations that violate British sovereignty or risk losing Britain's participation.

As such, the proposal would strengthen Mrs. Thatcher's hand in her current domestic political debate. The unnecessary and even bizarre nature of some EC regulation has hardly endeared Brussels to British voters. Nevertheless, much of the British public has accepted the inevitability of increasing EC intervention because of the oft-repeated argument that Britain can not afford to stand alone. A Mulroney--Bush proposal to include Britain in a North Atlantic Free Trade Area would make such an argument irrelevant. Domestic politicians who continued to urge capitulation to European unificationists could be asked why they support the erosion of British sovereignty when a less invasive trade agreement is available.

Finally, the agreement would strengthen Anglo-North American ties at a time when the allure of European pan-nationalism not only threatens European leaders who oppose it, but also promises to alienate Britain and its traditional North American allies. The recent European Court of Human Rights decision to overrule British compliance with an American extradition request (in the Soering case) suggests Britain's European marriage may begin to limit vital aspects of its "special relationship" with the U.S. and Canada.

Since World War II, Anglo-North American military and intelligence cooperation has extended, in the words of Cambridge historian Christopher Andrew, "far beyond the formal obligations of the Atlantic alliance." During the 1980s, the mutual support provided by this alliance proved essential to the success of unilateral British and American military actions against Argentina and Libya, both of which were opposed by other European allies. Both the removal of the Soviet SS-20s from Europe and the withdrawal of Soviet troops from Afghanistan occurred as a result of Anglo-American initiatives that were either resisted or ignored on the continent. The diminution of British autonomy inherent in the idea of European amalgamation raises serious questions about the future of this unique and mutually beneficial strategic arrangement.

Bismarck observed a century ago that the most important fact of the modern world was that the British and the Americans spoke the same language. His remark has proven both prophetic and understated. Not only language, but cultural, religious and democratic traditions have fostered Anglo-North American cooperation. This cooperation has played a decisive role in the outcome of both this century's world wars, in the maintenance of peace through forty years of cold war, and in the reversal of Soviet expansionism during this decade.

Yet, the Anglo-North American alliance, natural and beneficial though it may be, can not be taken for granted. A minimal pre-condition of decisive bilateral or trilateral policy is the sovereignty of participating nations. The current drift toward the multilateral unification of Europe threatens British sovereignty and will encourage British indecision and inaction. Yet, current economic and political realities make the gradual surrender of British sovereignty seem inevitable. Mrs. Thatcher's attempts to resist this trend have left her badly isolated. If the United States and Canada wish to maintain their historic relationship with a sovereign British nation, then they must act now and make her a better offer.