US-UK trade talks will commence shortly. The objective will be to reach a trade deal between the two countries post-Brexit. It is unlikely, however, that any definitive agreements will be made. It will be two years before the UK can make unilateral trade deals with any country outside the EU.
While attending the G20 summit in Hamburg, President Trump had stated that he expects a deal “very quickly.” UK Prime Minister, Theresa May was also “optimistic.” However, she did state that there was a limit to what could be agreed before Brexit. Under EU regulations, the UK is not permitted to sign a trade deal with the US until it has officially left the European Union. The US-UK trade talks are therefore very limited in what they can agree.
Liam Fox, Britain’s International Trade Secretary, is to spend two days in Washington speaking with his US counterpart, Robert Lighthizer. He stated that while nothing concrete can be agreed at this stage, a working group could identify common issues. Areas could be identified where each could “work together to strengthen trade and investment ties.”
Adam Marshall, director general of the British Chambers of Commerce (BCC), is concerned about the UK’s lack of negotiating experience. He believes that experienced US negotiators may make it difficult for the UK. For the past 40 years, the UK has rarely been involved in serious negotiations. Wheeling and dealing has largely been carried out by the EU as a body rather than by individual member countries.
Several bodies are wary of the dangers involved in coming to a deal too quickly. BCC members are wary of a rushed deal. They tend to prefer a focus on “small practical things” such as custom controls and procedures. The larger issue of trade deals can come later. Britain’s largest trade union, Unite, and the Trades Union Congress (TUC) are also wary of the UK making a deal too quickly. They feel that a quick deal would likely suit the US more than the UK.
Donald Trump has stated that he expects a “powerful” trade deal with the UK to be completed very quickly. Frances O’Grady, General Secretary of the TUC, stated that the UK would be better getting the best deal it can rather than “leap into bed with Donald Trump.” UK-US trade talks will not be able to come to any deal. They will only set the scene for future deals once the UK leaves the EU (aka Brexit).
The UD-UK trade talks will likely discuss certain issues that do not lay well the US. Among these is the UK and EU approach to genetically modified (GM) foods. GM soya and maize are imported into the EU as animal foods. The regulation of financial services in the UK is another issue, though it is unclear how these would affect a trade deal.
In spite of all this, it should be borne in mind that the US and UK economies have a mutual investment of around $1 trillion. This involves a large amount of employment in both countries. It should not be too difficult to come to an agreement on future trade! The US-UK trade talks will likely agree a deal – eventually. But not now! Almost definitely once the UK is permitted to negotiate under EU law.
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