May preaches free-trade in US as Trump turns up heat on Mexico

LONDON — When Mrs Theresa May arrives at the White House on Friday (Jan 27), her visit risks being overshadowed by another meeting that won’t be taking place.

The British prime minister is planning to pitch a free-trade deal to President Donald Trump while Mexican leader Enrique Pena Nieto pulled out of talks on his own country’s trading terms with the US as the reality of a new era of protection for American workers sinks in.

If the escalating row with Mexico wasn’t sufficient warning to Mrs May of the hazards of the negotiations ahead, Mr Trump set out his vision for a more assertive US approach to trading relationships at an event for Congressional Republicans in Philadelphia where both spoke on Thursday night.

“They’ll be one-on-one deals,” he said. “And if that particular country doesn’t treat us fairly, we send them a 30 day termination — notice of termination. And they’ll come and say, ‘please don’t do that’ and we’ll negotiate a better deal during that 30-day period.’’

While some countries are treating the new president with caution, Mrs May is going all-out for the closest possible relationship, arguing this is how Britain’s interests are best served. The prime minister said she believed she could work with the president to forge a new commercial relationship despite his protectionist rhetoric.

BIGGEST PRIORITY

“I am delighted that the new administration has made a trade agreement between our countries one of its earliest priorities,” Mrs May said in her own speech. She said that a deal “can demonstrate to those who feel locked out and left behind that free markets, free economies and free trade can deliver the brighter future they need” — a reference to the frustrated working class voters that helped bring both leaders to power.

Mrs May will become the first foreign leader to meet Mr Trump at the White House since he took office and ripped up the rule book, from trade policy to his use of Twitter. The two leaders will meet at 1pm Eastern Standard Time (2am Singapore time) and then offer a joint press conference later.

The premier is trying to portray Britain as open and ready to do business with the world, even as she prepares to officially trigger two years of Brexit talks. The relationship with the world’s biggest economy is an important plank in Britain’s post-Brexit future.

THATCHER-REAGAN

While Mr Trump has talked of recreating the close relationship between Ronald Reagan and Margaret Thatcher — the initiative risks causing unease back in Britain. Tens of thousands of Britons joined the worldwide protests the day after Mr Trump’s inauguration, attacking his statements about women.

Mr Pena Nieto’s dealings with Mr Trump took a turn for the worse when the president doubled down on campaign pledges to rewrite the North American Free Trade Agreement and charge his southern neighbor to build a border wall. The Trump administration retaliated to Mr Pena Nieto’s cancellation by floating the idea of imposing a 20 per cent tax on all Mexican imports.

After decades of greater economic cooperation boosted activity on both sides of the border, Mr Michael Shifter, president of the Inter-American Dialogue in Washington, said Thursday was the worst day for US and Mexican relations in living memory.

Mrs May’s speech in Philadelphia, two hours after Mr Trump’s, showed the difficult course she is trying to navigate, flattering the president while rejecting many of his stated positions.

FELLOW CONSERVATIVE

Mrs May opened by praising Mr Trump for delivering “a new era of American renewal”. She was, she told her audience, “a fellow Conservative who believes in the same principles that underpin the agenda of your Party”.

But where Mr Trump had told his audience that “the world has taken advantage of us for many years” and assured them that this was “not going to happen any more”, Mrs May told them that it was in the US’s interests to continue to take a leadership role.

After talking about the rise of China, she told them that “when others step up as we step back, it is bad for America, for Britain and the world”. She told them to “beware” of Vladimir Putin’s Russia.

“The days of Britain and America intervening in sovereign countries in an attempt to remake the world in our own image are over,” Mrs May said. Even so, she added, “whether it is the security of Israel in the Middle East or the Baltic states in Eastern Europe, we must always stand up for our friends and allies in democratic countries that find themselves in tough neighbourhoods too.”

It remains to be seen whether Mr Trump will be shifted by Mrs May’s engagement strategy. In the meantime, it risks a political backlash for her at home.

While Mrs May is seeking agreement from Mr Trump to begin work on a trade deal, it can’t be formalised until Britain has completed its withdrawal from the EU. She refused to discuss what areas that would cover, but insisted the deal wouldn’t lead Britain’s state-funded National Health Service to begin charging patients.

“There will be a limit to how far we can go in terms of a formal free trade agreement,” Mrs May said. “I think there is much that we can do in the interim in terms of looking at how we can remove some of the barriers to trade in a number of areas.” BLOOMBERG