Much to gain and little to fear from a US-UK trade deal
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IEA Brexit Unit releases report on US UK trade deal
- The US is likely to be at ‘the front of the queue’ for a new trade deal with the UK after Brexit.
- This would require the UK to escape the constraints of the EU’s Customs Union and also be free to diverge from EU regulations. But if these two conditions are not met, many would question whether ‘Brexit’ has any meaning at all.
- The political support for a US-UK trade deal is strong and the economic and financial ties between the two countries are already close. The UK should therefore be able to do a good trade deal with the US more quickly than the EU ever could.
- An early deal with the US, and other friendly countries such as Australia and New Zealand, would also get UK trade negotiators back in the swing again. This should help in the harder talks that lie ahead with faster-growing emerging economies, such as China and India, where the potential gains are even greater.
- Some sensitive issues will have to be carefully managed. However, British opponents of a US-UK trade deal have tended to exaggerate the risks. These include fears that a US-UK trade deal would inevitably lead to the ‘Americanisation’ of the NHS, a free-for-all for powerful multinational corporations, or a race to the bottom in food standards.
- In reality, allowing more US firms to bid for public sector contracts should only improve quality and drive down costs. The rules determining any investor-state dispute resolution mechanism would be part of the negotiations.
- The impact on the agricultural sector may be most delicate. But the UK government has already made clear that it will not compromise on food safety or animal welfare.
- The upshot is that there is much to gain and little to fear from a US-UK trade deal. And as well as further strengthening one of the UK’s closest relationships, it would help post-Brexit Britain to set out its stall as a global champion of free trade.
This report featured in City AM. Author Julian Jessop wrote for The Telegraph and Director General Mark Littlewood wrote for The Times on the topic.
An updated version of this briefing has been published ahead of President Trump’s visit to the United Kingdom (July 2018). To download, click here.