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Corbyn's talk of a hard Brexit shows he's remodelling himself as a Bernie Sanders-style protectionist populist for the left

At the moment, Theresa May is putting forward an ardent free-trade message. If Corbyn and McDonnell run on a protectionist platform, painting May as in the hands of foreign corporate elites – just as Trump did with his opponent – it could strike a chord with voters

Sam Pallis
Tuesday 10 January 2017 12:19 GMT
Jeremy Corbyn on ‘Good Morning Britain’
Jeremy Corbyn on ‘Good Morning Britain’ (ITV)

Donald Trump won on a protectionist ticket. “Bring Back Jobs” was the slogan that electrified supporters at his rallies across America. He proposed to raise a tariff on Chinese goods to a whopping 45 per cent and has confirmed that he will pull out of the now infamous Trans-Pacific Partnership on “day one” of his presidency. Is John McDonnell about to run on this ticket as well? He has been a long term critic of the Transatlantic Trade and Investment Partnership, a similar US trade deal, which he believes “cannot be accepted in a democratic country” and all signals are pointing to him favouring a hard Brexit, seeing Brexit as an “opportunity” that has bought “free movement of labour and people…to an end.” With Jeremy Corbyn now saying Labour is no longer “wedded” to freedom of movement and re-launching himself as a populist, is Labour about to embrace protectionism?

When McDonnell referred to the EU as “putting the interests of big business over ordinary people” and claimed that it was on “the side of certain corporate elites”, you could see many parallels with Donald Trump’s economic message.

Much of Trump’s message on bringing American jobs back home and his promises of large-scale infrastructure projects could have been taken out of McDonnell’s mouth. And this would not be the first time protectionism has been floated by Labour. Tony Benn’s Alternative Economy Strategy put forward protectionism as an answer to the economic strife of the late seventies.

It seems McDonnell is weighing up whether now could be the time to revive the Bennite project which had many similarities to what Bernie Sanders promised during the Democratic nominations in America. The key principles of this strategy were protectionism, re-nationalisation and a retreat from Europe. As the UK faces the inevitability of Brexit, this could be an opportune moment to resurrect those ideas.

But could this stance really work for Labour? At the moment, Theresa May is putting forward an ardent free trade message. If McDonnell runs on a protectionist platform where he paints May as being in the hands of foreign corporate elites and thus not interested in protecting British jobs, it could strike a chord with voters. Who knows? He might even be able to win an election on this platform. 65 per cent of Labour constituencies voted Leave; a protectionist pitch could potentially hold back the tide from Ukip and the Tories in these areas.

Migration would seemingly no longer be an issue if we follow the hard Brexit and protectionist path. We would leave the single market and could revert to World Trade Organisation (WTO) Rules or the Turkey/Canada Model, meaning there would be no freedom of movement.

However, both the Turkish and Canadian models seem unlikely. The Turkish model would not give the UK the ability to set their own tariffs on goods from countries outside the EU. Likewise, the Canadian framework does not eliminate tariff-free access for sensitive food items such as eggs. Canadian exporters have to prove all products entering the EU are made in Canada, and this model wouldn’t allow financial service industry passporting rights in the EU. So if McDonnell and Corbyn were to pursue a protectionist course, they would not be able to accept either of these models and would have to revert to WTO rules.

But protectionism is a flawed policy which can lead to trade wars, higher prices and in the long terms recession. This happened to countries such as Italy due to the protectionist policies they took in the twenties and thirties, the most notable example of which is the Americans’ Smoot-Hawnley Tariffs.

Do you want to be Prime Minister? Jeremy Corbyn dodges PM question again

And where does all of that leave us on migration? Labour is supposed to be the party of migrant rights and tackling racism. Abandoning the principle of freedom of movement and relying on non-governmental bodies such as unions to arbitrate is not the solution.

What model would Corbyn’s party propose? A points-based system hasn’t worked to stem migration in countries like Australia. And migration is essential to our economy; even Nigel Farage agrees with that.

Brexit has been a wake-up call because it has made us face the repercussions of a globalised world run on free market rules. However, rather than retrieving democracy, we are giving away our democracy if we step away from the international stage.

Labour should not play their hand before negotiations have even started. The problem is not international trade but that citizens haven’t been adequately compensated for their impact . But a government that promotes an interventionist welfare state with an active industrial strategy can alleviate this situation.

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