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Décryptage : American trade talks “an awful obstacle course” for the UK

Écrit par sur 19 mai 2020

Trade negotiations between the UK and the US have officially started. And in the UK it’s a key moment for Brexit architects: one of their big arguments for leaving the EU, was that the UK would have freedom to establish its own trading terms with countries like America. 

We invited Stryker McGuire, the London editor of Bloomberg Markets magazine, and dual US UK citizen, to give us his take on what to expect from this round of negotiations. Is this finally the historic moment that Brexiteers have been waiting for? Well according to him, not only are these talks unlikely to reap rewards anytime soon, but one side, has got everything to lose. 

“A few months ago this was going to be very difficult. A few months ago, very few people thought that there would be a proper free trade agreement this year. Now, I don’t think anybody thinks there could be a free trade agreement this year. 

There might be what’s called a ‘mini-deal’, almost like a statement of intent. But it doesn’t really mean very much and it has risks for the UK. For example, such a deal could pull the UK closer to the US in an anti-China stance, then the UK would be eager to go. There are lots of pitfalls for the UK. 

For the US, it doesn’t make that much difference. It would mainly be a political deal. There’s an election coming up in November, and Trump has gone on and on about a deal with the UK. A mini-deal would be a step in that direction.

I don’t think anybody thinks there could be a free trade agreement this year

One of the big talking points about Brexit was that it would position the UK as “global Britain”. The irony is that in some ways right now, because of Covid, the UK is showing a new respect for multilateral institutions. The US is moving away from multilateralism.

Therefore, by cuddling up to the United States, the UK risks moving itself away from that kind of “global Britain” idea, towards more of a bi-lateral arrangement with the United States. So joining the US in a sort of anti-globalism, anti-multilateral position. It’s odd because it seems to be actually undermining one of the main goals of Brexit across the last few years.

A lot of people looking at any US-UK deal figure that the US has much more to gain than the UK. It’s a very risky proposition for the UK. Most of its trade is with Europe. A very small amount of its trade is with the US. And to have more trade with the US runs the risk of agreeing to certain standards, for example on food and agriculture, which would make a deal with the EU even more difficult. Which is just preposterous because the UK gets over 70% of its food from EU countries. So you can see that the UK is in kind of a bind here.

By cuddling up to the United States, the UK risks undermining one of the main goals of Brexit

The EU wants the UK agreeing to standards that it now agrees to. But if the UK starts cutting deals with the US that are at a lower standards than the EU standards, then you can immediately see that there is no level playing field, that everything gets tipped off balance. It’s the chlorinated chicken, which is kind of a metaphor for food standards. 

The thing about a mini-deal is that it doesn’t need congressional approval. You can basically sign a piece of paper and call it a mini-deal. But to have a free trade agreement, it has to go through congress. Whether the congress is run by Democrats or Republicans, it pays an awful lot of attention in the United States to agricultural interests. So you get back to this question of if the United States is going to enter the UK with its agricultural production, is the UK going to alter, some would say lower, it’s standards to allow the US in, and then what does that do to negotiations with the EU.

This is like an awful obstacle course that the UK is running, and everything so far seems to have conspired against the UK. Except that Brexit happened; Boris Johnson was happy about that. But everything since then has not gone his way, including, most lamentably for everybody, the whole coronavirus pandemic.

The US has much more to gain than the UKthe UK gets over 70% of its food from EU countries

It’s a very difficult time in which to be doing negotiations with anybody. You have a certain number of people who are meant to be negotiating a trade agreement while around them a storm is spreading so quickly that the rest of the government is completely distracted from these kinds of trade negotiations.

Under a Biden presidency, it starts all over again for the UK. There’s no way in which the US would penalise the UK for having attempted to do a deal with Trump. But the clock starts over again, therefore prolonging everything.”

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