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Analysis

Trump’s trade U-turn bitter pill for Brexiters

by Nick Kent | 01.06.2017

“Back of the queue.” That was Barack Obama’s famous response a year ago when asked about the likelihood of a UK-US free trade deal after Brexit.

No sooner had Donald Trump been elected president, however, and he was promising the opposite. In January he told The Times that the US would quickly negotiate a free trade agreement with the UK to make Brexit a “great success”. “We’re going to work very hard to get it done quickly and done properly,” he said. This promise was hailed by the foreign secretary, Boris Johnson, who declared that far from the UK being at the back of the queue, we would be “first in line”.

Three months later and that queue was reshuffled once again; and this time the UK has gone to the back. The reason is that the US would rather do a much bigger, more valuable trade deal with the whole of the EU and the UK can’t start negotiating an agreement with other countries until after Brexit. So EU-US trade talks, stalled since the Presidential election, are likely to be back on and British negotiators must cool their heels and wait until the Europeans have left town. On May 30, Trump’s commerce secretary rammed home the point, saying it made sense to continue trade talks with the EU.

It didn’t take long for Trump to do such a massive U-turn. In fact it took just one meeting with the German chancellor Angela Merkel. Apparently she had to tell him 10 times that Germany would not do a bilateral trade deal with the US and that he would have to talk to the EU instead. On the eleventh time he got it. The proposed EU-US Transatlantic Trade and Investment Partnership (TTIP), presumed dead, has risen from its half-dug grave.

Actually it is good news that the president is interested in doing trade deals. At times in his election campaign it seemed like he would not support any such agreements if he won. Indeed, his decision after becoming president to scrap the Trans-Pacific Partnership (TPP), a free trade agreement between America and 11 other Pacific-region nations, before it had been implemented seemed to demonstrate that. Now his commerce secretary Wilbur Ross has said that TTIP hasn’t been abandoned and White House sources have said that an EU-US free deal is worth more to America than one with the UK.

Once again the optimism bias of the Leavers, who always believe that something will happen just because they want it to, has been shown to be a hollow fantasy. The UK can’t expect to get just what it wants after Brexit. A country with a population of 65 million is not going to trump the EU with its 440 million people in global trade negotiations. That isn’t being defeatist, it’s being realistic.

This piece was updated on June 1, 2017 to take account of the latest comments by the US commerce secretary

Edited by Luke Lythgoe

4 Responses to “Trump’s trade U-turn bitter pill for Brexiters”

  • Trump may switch again, although the terms he is likely to demand (from any country or group) are going to be no bargain. Today’s possible withdrawal from NAFTA is the latest shift away from trade deals – but interesting that the markets are mainly ignoring the story as they become used to ‘words not deeds’ from him.
    The more significant aspect of today may be the very low key appearance during the final PMQs of the Brexit trio. It is a pity there is no opposition to try to assess whether this may suggest a more open mind on the whole process, assuming she gets a majority of 100+ – and ceases to need the 40 odd hardliners.
    Shame she felt it necessary to go for Article 50; much simpler to have waited so there was an option when the going gets too tough.

  • I am astonished by the stupidity of brexit voters, and enjoying to see their house of lyes falling apart,. Sorry for my english, but the message is important not the grammar.)

  • There’s nothing surprising in any of this except perhaps the mis-reporting of TTIP and TPP as ‘free trade agreements’ which is incorrect.

  • Food for thought. Give him something to talk to the Queen about.
    Perhaps we too should be considering a U-turn on the Orange One’s so-called State Visit.