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  October 3, 2017

Join The Dots: What's the Deal? Brexit, Arms and Corporate Power


Real Media's senior editor Kam Sandhu and investigative journalist Matt Kennard discuss UK Secretary of State for International Trade Liam Fox - his history and ties to US corporations, what this means for Brexit negotiations and what's it's really like inside the world's largest arms fair
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KAM SANDHU: Hello and welcome to the third episode of Join the Dots. I'm Kam Sandhu.

MATT KENNARD: And I'm Matt Kennard.

KAM SANDHU: Today, we're going to be talking a lot about Liam Fox. Now, at the start of September the world's largest arms fair came to London. DSEI, Defence and Security Equipment International was met with a week of creative protests and civil disobedience during its setup as a way of stopping the trucks entering and disrupting the process. We went along to see some of those things but it was a very, very different story inside the arms fair. Matt, you managed to get in there on the opening day. What was it like?

MATT KENNARD: Well, firstly, I should say it wasn't easy to get in because I applied about two months before for a journalist's pass but I didn't get any reply for ages. And then basically, they kept on delaying and delaying and delaying whether I was going to get one. They said I'd been okayed, but I hadn't passed my security clearance. Basically, this continued right up to the day before when I threatened them and said, "Look, I'm going to go public and make it look very bad if you don't give it to me because you're not letting in accredited journalists." So in the end, they said, "Okay, okay, okay. We'll let you in."

Then you sort of understood why they wanted to keep it as secret as possible when you got inside because it was like an orgy of evil, basically. Weaponry everywhere, missiles everywhere, ammunition and completely unconstrained by any worries about how it might look. It was a celebration of death and war and weaponry, basically. I actually felt quite sick when I left because you were surrounded by these gleaming brochures and gleaming shelves full of ammunition and AK-47s and sniper rifles, everything you can think of.

And then, while you were looking at that, you'd turn around, and you'd see a delegation from Egypt or Turkey, so generals and different high-ranking military people that had definitely been involved in murder, torture in some of the most repressive and awful regimes in countries around the world. And then you combine that with the corporate guys on the other end who make their money selling this machinery of death. The BAE had the biggest presence, BAE Systems, the British company. And you had all these squat 67-year-old, white-haired guys sort of talking to these different delegations.

And I was there taking pictures of the delegations and I got accosted by someone from the Defence and Security Organization, which is part of the MOD. He said to me, "Why are you taking photos? You're not allowed to do that." And I said I wasn't told that. I was told I could take photos of anything. He said, "Well, that might be true, but please don't."

And eventually, I started talking to him about what the DSO do, and they're part of the MOD, but basically what you realize when you're in there is that the British government is an ally completely, completely in bed with BAE Systems and other companies. There's no separation at all. We can talk a bit more about it, but it's quite a bizarre facet of the arms industry in the UK that the government and the companies themselves work hand in glove. I don't think there's any other industry like that in the world. Every delegate, every ministerial delegation that goes to a foreign country will usually have a representative from an arms company, and it will be high on the list of priorities, the selling of arms. So that really brought it home in a weird way because the actual BAE Systems set-up was guarded by the MOD, so that was quite bazaar.

So, it was a very strange place to be. I was there for about six hours and I just used the time to get as many brochures as possible and talk to as many people as possible and try to bring up a few of the uncomfortable topics that I guess the other delegates weren't talking about, like Yemen and Saudi Arabia. Most of the people I spoke to-

KAM SANDHU: What was your response?

MATT KENNARD: Most people just said, "Well, we just follow orders." Honestly, one of the military guys just said, "We just follow orders." I felt like it was just, I couldn't really understand that. They knew what was happening was wrong. You could tell by their faces that they just hadn't been asked it. They looked completely uncomfortable. They weren't expecting it. But there's no way you can defend what was happening in Yemen and the fact that we sell arms, so mostly they just changed the subject or say, well, they got their export licenses, we have a very rigorous system for export licenses. The best evidence for that not being true is the fact we still sell arms to Saudi Arabia. Any licensing system that doesn't stop you selling arms to a country which is destroying another country surely isn't worthy of its name.

It was a very weird experience inside. I was also outside seeing the inspiring activists who were actually getting arrested and really protesting the people going in and out.

KAM SANDHU: Over 100 arrests.

MATT KENNARD: Yeah, exactly.

KAM SANDHU: It wasn't that widely reported, but that was like a week's worth.

MATT KENNARD: Having been in there, I was so happy that they did that because when I came out and I saw that there was a row of people in the station holding posters of the atrocities that have been committed by British arms, and I sort of felt like at least when people are going in and out, they're seeing there's not just some sort of easy, slick route in. They're actually getting confronted with the reality of what this industry does.

KAM SANDHU: Yeah. Earlier in the year, The Independent reported that the UK has become the second biggest arms dealer in the world. You've been following some of the research on this. Can you talk to us a little bit about how the UK became the center of this industry and what kind of effects that has on our place in kind of global conflict?

MATT KENNARD: Yeah. Well, before I started looking into this subject, I didn't really understand the central place that Britain had in the global arms industry. You sort of see those sort of click bait articles now and then that Britain's the second largest arms dealer and then not much description about what that means or who we sell to. But then I started looking into it and the different facets of it, and not only are we the second biggest arms dealer of conventional arms, we also have the largest amount of companies in the world registered in the UK which do surveillance technology, repressive technology and spyware, all the different things that you can buy to spy on your population. And for internal repression, we have more than any other country. Thirdly, we have the most amount of private military and security companies in the world registered in the UK.

This is in absolute terms. We're quite a small country. That's quite insane to think that. I started looking into why that is the case and it seems that what happened when manufacturing was destroyed by Thatcherism, and we moved to a different development model based on financial capital, which everyone that knows that story quite well, what also happened was there was a concerted effort to keep the regulation on the war industry's light touch as well because they wanted to build up that industry in a way that hadn't, BAE Systems has always been big but it didn't dominate in the way it does now. Also, we didn't have these ancillary companies that are now proliferating all around the UK.

So, in that context 20 years on, with the War on Terror which was launched in 2001, but really Britain had a major role in that with Iraq, and you had all these soldiers returning from Iraq and Afghanistan and they were creating these companies. So, last year, I went to Hereford, which is where the SAS base is. Just outside Hereford is a place called Credenhill. But a lot of the guys that leave their stay in Hereford and create a private military company. Recruit from the SAS, which has got a great reputation in this world around the world, and make tons of money in a way they would never would in the army.

So, Britain has become this major hub and not many people know about it. No one knows really about the proliferation of spyware surveillance companies here or the proliferation of private military and security companies.

KAM SANDHU: The extra things that come with holding that place in the world. You mentioned Yemen and kind of BAE's involvement there. They've been confronted by that. There's been an amazing campaign by Campaign Against Arms Trade who've kind of been holding not just the government to account legally but also through their campaigns and keeping the attention on them throughout the kind of war in Yemen, which the UN has said is breaking international humanitarian laws. This has been said time and time again.

But here's Liam Fox, Secretary of State for International Trade. He was at the arms fair this year, and he defended the lucrative industry. Here's him being confronted about Yemen.

SPEAKER 3: Quick question about the Saudis. How many civilian targets would have to get hit before you would revoke a license, would you say?

KAM SANDHU: So, it's not just the wars as the way we think about it in terms the arms trade that has an effect on countries. We spoke to Andrew Feinstein, author of “Shadow World: Inside the Global Arms Trade”, and here he is talking about the effects that BAE Systems and the arms industry had on South Africa's democracy.

A. FEINSTEIN: What BAE Systems has done is it has corrupted countries around the world, including my own country, South Africa. We're just four years into our democracy. BAE paid £115 million of bribes, according to the Met Police, in order to win a contract for which its product should never have been awarded the contract. It was only because the defense minister who was bribed ensured that BAE won the contract.

What that did is it undermined South Africa's young democracy. It ensured that scarce resources were spent on weapons that the country didn't need and has barely used rather than, for instance, providing life-saving medication for millions of South Africans living with HIV or AIDS at the time. In fact, Harvard University has estimated that as a consequence of that policy decision, at least 365,000 South Africans died avoidable deaths within five years of that decision. This is the sort of effect that BAE Systems has on the world.

KAM SANDHU: So, that was Andrew Feinstein talking to Real Media this month discussing there the kind of numerous ways in which we put the profits of the industry first before the welfare of countries around the world because of this arms industry. Now, when we attended the protest at the arms fair, we spoke to one person in particular who had come to protest one man, and this is what he had to say.

SPEAKER 5: Liam Fox is part of the clique, a small clique within the Conservative Party, an extreme group who've taken control of power in what is in effect within the governing party coup d'état. And his strategy is to sell as much arms as possible overseas in order to strengthen the hand of Brexiteers who are taking this country out of Europe.

KAM SANDHU: So, what do we know about Liam Fox? He was shadow defence secretary from 2005 to 2010, and then for a short time secretary of state between 2010 and 2011 before he had to resign in disgrace after it was revealed that his friend Andrew Werritty had been traveling with Fox to government trips and government meetings, things to do with arms deals but he had no security clearance or pass.

MATT KENNARD: And Werritty had links to corporations and financial interests that would be affected by decisions made by Fox in his position as a cabinet minister. Fox even asked one city financier to bankroll his unofficial advisor, according to The Telegraph.

KAM SANDHU: So, Fox is well-accustomed to being part of this small clique. He's very comfortable with having powerful interests and corporations represented around him and taking them with him on trips. And now, he's returned to government as a Secretary of State for International Trade during Brexit negotiations that will shape the future of this country as far as we can see.

New Internationalist did a great report by someone called Joe Lo from Campaign Against the Arms Trade. They released this during the DSEI arms fair. "For Liam Fox, any future journey through the revolving door may be made easier by the fact that the man who was his special adviser as a minister until Fox resigned in disgrace following a lobbying scandal, Oliver Waghorn, is now BAE Systems' chief lobbyist. Waghorn was hired by BAE Systems as 'head of government relations' in October 2016, just three months after Fox became Secretary of State for International Trade – the department in charge of promoting British arms exports and organizing arms fairs."

So on top of that, he's also a longstanding, hard-right conservative, a Brexiteer, and he has a history of trying to build a relationship with the US. Fox has strong ties to US conservatives, so much so, in fact, that after Trump's election, The Financial Times reported that this would elevate Fox's standing and make his position indispensable, which would explain his appointment on returning to the government. He's been pretty optimistic about the kind of Brexit negotiations saying that the UK would be at the front of the queue in terms of any US trade deal.

We spoke to Linda Kaucher earlier in the year about these trade deals and Liam Fox's priorities.

LINDA KAUCHER: So, obviously a main priority for the UK government is a trade agreement with the US, and the person who has been and probably will continue to be in charge as secretary of state for international trade is Liam Fox, who's very closely aligned with US big business. In fact, has been an organization that has been a bridge for a major US lobbying organization. So obviously, the UK is very keen to push ahead with a deal with the US.

We can look at what went on with the Trade and Investment Partnership with the EU that has been negotiated for a few years but is at a standstill now, and we can see there that the biggest force was US agribusiness pushing to get their lower-standard food into the EU. And you can see that the UK is quite, as always, quite a GM-friendly government and that the UK can be the opening for that for US agribusiness pushing into the UK and as a doorway to the rest of Europe.

Liam Fox has already said that the needs of the banking industry and financial services will be prioritized in a US-UK trade agreement, if it was to happen. So you can see that the needs of the public, so for instance, on food standards will be not prioritized at all. It will be traded off for the needs of banking.

KAM SANDHU: That was Linda Kaucher talking with Real Media about trade deals. There's been numerous reports from the European Corporate Observatory that confirms some of the things that's she's saying, that banks and big business have had far more access to meetings than unions and other voices, which means that they're going to be the groups influencing the formation of Brexit talks.

Also, the "bridge" that she mentioned we should explain is the organization the Atlantic Bridge. This was founded by Liam Fox in 1997 with Margaret Thatcher as a patron. Fox described its purpose as "to bring people together who have common interests." It would defend these interests from "European integrationists who would like to pull Britain away from its relationship with the United States." Michael Gove, George Osborne, William Hague were all on the council.

And as Kaucher says, Fox has strong links to US corporations and US conservatives. In fact, the T-TIP deal, the Transatlantic Trade and Investment Partnership deal, there's probably a risk that some of the aims of that could probably be done through Brexit, through rewriting regulation and putting corporations as the kind of main interest in working with things in the way that they like.

Another organization that Fox is linked to, this time based in the US, is The Heritage Foundation, who Fox has visited many times, including since Trump's election in November 2016.

MATT KENNARD: And George Monbiot wrote an article in The Guardian explaining the increasing influence of The Heritage Foundation. "Like Alec, it has been richly funded by the Koch brothers. Heritage, under DeMint's presidency, drove the attempt to ensure that Congress blocked the federal budget, temporarily shutting down the government in 2013. Fox's former special adviser at the Ministry of Defence, an American called Luke Coffey, now works for the foundation. The Heritage Foundation is now at the heart of Trump's administration. Its board members, fellows and staff comprise a large part of his transition team." "CNN reports that 'no other Washington institution has that kind of footprint in the transition.' Trump's extraordinary plan to cut federal spending by $10.5 trillion was drafted by the Heritage Foundation, which called it a 'blueprint for a new administration.' Vought and Gray, who moved on to Trump's team from Heritage, are now turning this blueprint into his first budget. This will, if passed, inflict devastating cuts on healthcare, social security, legal aid, financial regulation and environmental protections; eliminate programs to prevent violence against women, defend civil rights and fund the arts; and will privatize the Corporation for Public Broadcasting. Trump begins to look less like a president and more like an intermediary, implementing an agenda that has been handed down to him."

Once again, an institution which is putting profit of corporations before people. And just going back to arms, recently, Trump asked for an extra $639 billion for defense spending extra in his latest budget. Meanwhile, the president completely ignores funding for agencies like FEMA, which are dealing with the fallout from the hurricanes in the Caribbean and Florida. So you really just see the priorities of the administration and who they're really working for. And the major pushes of these kind of policies are institutions like Heritage, and they proliferated massively across Washington since the '70s, and it's quite conscious on the part of the corporate sector that they wanted to wrestle the debate away from social movements and any kind of socialistic policies to put the economy basically back to work for corporations.

KAM SANDHU: Now, at the same time, Liam Fox in the UK has not stopped trying to pull policy and power into a hard-right direction. Just as Theresa May gave her speech in Florence about figuring out a reasonable kind of negotiation standard and moving forward, working together, Liam Fox was giving a speech at a new think tank hosted by Boris Johnson and led by Dan Hannan, fellow Brexiteers in the Leave campaign. This is the Institute of Free Trade. There was no media allowed at the reception.

And Boris has also called for a quick transition undermining May's speech, and The Times reported that Johnson's decision to host this event for this new think tank "threatens the fragile truce that has been called within the cabinet over the government's Brexit position." The Times also said that "the think tank says it wants to change policy by calling for Britain to abandon European product standards, even though this could jeopardize soft Brexit." Hannan, meanwhile, wants to influence negotiations by approaching businesses separately from the Institute for Trade.

I find it kind of strange that we still kind of have this language of hard and soft Brexit because who knows which one of those is going to mean that your food is not poisoned or which one of those is going to mean that your rights are going to be changed? It works very much in favor of the people doing these deals because we have no idea what we're going to get out of each of these, but one sounds maybe a little bit nicer than the other.

Some people might remember a little while ago that Liam Fox said that the media was obsessed with chlorinated chicken but this think tank wishes to do away with the kind of standards that protect these things. And it's kind of well-known that European standards are kind of higher than US ones. Linda Kaucher kind of mentioned that earlier. But here, these deals could be used as leverage for other agreements such as finance, such as arms. This is trading your food potentially to get a better deal on defense. It seems that Fox is still leading the charge on this. Labor MP Barry Gardiner tweeted recently, "The New Institute for Free Trade launched by Liam Fox is saying that a ban on hormone-fed beef is 'trade barrier,' but it's banned because it's carcinogenic!"

MATT KENNARD: And we got a glimpse of this potential future this week when the story broke that the US were going to potentially put a tariff of 219% on import of Bombardier aircraft from, well, it's a Canadian company, but they employ 4,000 people in East Belfast, which would destroy many livelihoods there and really is a punch in the stomach for Theresa May and all the other people who are saying that we can get a great deal with the US after Brexit happens.

KAM SANDHU: And Michael Fallon, the defense secretary, has immediately warned that this would harm defense contracts and potential trade agreements, which remember, kind of Liam Fox was leading the charge, was saying we're going to be at the front of the queue for these talks. And Theresa May personally lobbied Trump when she was in the US, asking him to persuade Boeing to drop their case and to provide support to these 4,000 jobs in East Belfast.

TUC General Secretary Frances O'Grady said that this was "grim news" and "should be a wake-up call to those who view the US as our trading savior after Brexit. The US slapping huge tariffs on key UK exports is not a good sign of things to come." And in these kinds of trade off that we're kind of putting all our faith in, we might be trading off food, living standards, rights, whatever we can make out from the kind of the conversation that's going and coming from Liam Fox and David Davis, which is not really telling us what kind of deal we're actually going to get, but-

MATT KENNARD: I would say personally that I don't think it's a particularly bad thing if the arms industry in the UK is damaged because there's a lot of myths around the arms industry, and one of the major, major myths that's pushed relentlessly and actually is the major legitimization of the industry in the eyes of the public and the political class is that they provide jobs. And everything that happens in the arms industry is around, will this damage jobs? Now, obviously, 4,000 people's jobs in the East Belfast is important, but there's this lack of imagination. There's always the chance that you can create different socially-useful jobs and use the engineering expertise, the tools that are already there to do something socially useful.

And in fact, in the '80s, there was a really famous plan called the Lucas Plan where it was all about workers occupying factories where arms were made and turning it and using the same tools but to make products which were socially useful and could benefit society. And I think that's something that should be revived. And in fact, trade unions, you just quoted Frances O'Grady, but trade unions have often been really had a really strange position. Well, strange for me but not strange for their institution because obviously they're to represent to their workers. But for example, Unite backed Trident.

And there's a real breach with Corbyn on that issue because their workers work for BAE and others, but in fact, Corbyn said if we don't renew Trident, we will create one job for one job. So any job lost in the arms industry, there will be a new job created with state intervention in some sort of socially-useful area. And I think that's a good policy.

So although obviously this does show up the complete hypocrisy of the Brexiteers, that there's this idea that we'll get some sort of super duper deal with the US is rubbish, but I don't think we should cry too much about arms exports to the US because it's an industry which is founded on myths. And one of the major myths that's used to keep it as such an important part of the economy is jobs.

KAM SANDHU: I spoke to Sarah Reader, who's an anti-arms trade activist, last year. And she was discussing this very thing, that they use these kind of emotive things like jobs to keep people wanting to maintain this kind of industry. But these are high-skilled jobs that could be very, very useful in renewable energy, in, as you said, socially-responsible things. So there is another option. We don't have to maintain this industry.

But that is all we've got time for this episode. Thank you for joining us. Let us know what you think in the comments and we'll see you next time.

MATT KENNARD: Thanks a lot.



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