Prime Minister Theresa May seemed mightily proud that Donald Trump had committed himself – in the margins of the G20 Summit in Hamburg – to negotiating a UK/ US trade deal “very, very quickly” after Brexit. Yet that was precisely what the US president promised when they first met in January – give or take a couple of “verys”. And none of this is going to happen for several years, however many air miles Trade Minister Liam Fox clocks up in the meantime.
How many times are we going to be sold the same sorry trade horse? The honest answer is “quite a lot “. You can be sure that every time the UK Prime Minister and the US President meet between now and March 2019 it will be trotted out. It will be back again on stage when the real negotiations for a trade deal are under way and while the ratification process – far from simple on the US side – is taking its time. Until there is more clarity on what the content of such a deal might be, the frequently repeated Hamburg mantra will be about as meaningful as “Brexit means Brexit”.
The idea of demolishing tariffs and non-tariff barriers and achieving regulatory convergence in trade across the Atlantic is not a stupid one. That was what motivated the EU and the US when they began negotiations for a Transatlantic Trade and Investment Partnership (TTIP). Such talks take a lot of time, but they eventually bear fruit, as the announcement last week of success in the EU/Japan negotiations demonstrated. Moreover, there could well be a conflict of priorities for the US between TTIP and any deal with the UK. Why should Washington favour a deal with the much smaller of those two trading partners?
Moreover, the UK/US deal cannot be pursued without finalising the far larger and more significant trade deal between the UK and its 27 erstwhile EU partners. At the moment, there is a complete absence of clarity on what that might contain. Under a scenario in which the UK remained in a customs union with the EU-27, either temporarily or more durably, negotiating a UK/US deal would almost certainly be put on hold indefinitely. If the UK reached no trade deal with the EU-27, a UK/US deal would become more urgent. But no one can seriously suggest that what we lose by having less access to a market that consumes 44% of our exports can be compensated by a deal with a market that takes barely one third of that?
Nor should we forget that the President of the United States does not have sole authority over trade policy: he shares it with Congress. If Congress does not give him “fast track” authority – and it has not done so for a UK/US deal – then every part of an agreement can be unpicked during the ratification process. Brexiters might do well to focus on that rather than gloating over the difficulties which arose over the ratification of the EU/Canada agreement when the Walloon assembly in Belgium objected to some of its provisions.
All things considered, the government would be wise to contain its excitement over the prospects for a UK/US trade deal and put a bit more effort and imagination into having a decent one with the EU-27.