Ben Roback is a Senior Account Executive at Cicero Group and a member of the US Embassy’s Young Leader’s UK programme.
Last week I travelled to Washington, D.C. to get a look at Donald Trump’s administration on the ground. Over lunch with Nile Gardiner, Director of the Margaret Thatcher Center for Freedom at the Heritage Foundation, one message became clear: in the pursuit of a bilateral trade deal, the Special Relationship has the opportunity to be refreshed and revitalised under Trump and Theresa May.
Anyone unsure of Heritage’s strategic placement within this administration should observe its current credentials. Stephen Moore, Distinguished Visiting Fellow, was a senior adviser to the 2016 Trump presidential campaign. In February, Dr Gardiner gave evidence to a joint subcommittee hearing of the House Committee on Foreign Affairs on the subject of a US-UK Free Trade Agreement. With the ear of the White House on economics and trade, I sat down with him to discuss what we might expect from Trump’s administration and the future of the Special Relationship.
The Special Relationship: from close allies to free trade partners
Following the Prime Minister’s visit to the United States in January, the prevailing sense in Washington’s corridors of power is that the Special Relationship is set for a period of resurgence. Though the return of Winston Churchill’s bust to the Oval Office was largely symbolic, the optics indicate the political momentum behind increasing ties between the two nations, expressed with confidence by Dr Gardiner.
Consider the evidence: the UK has gone from the back of the queue to the front in the pursuit of a deal. Alongside the Republican Party in Congress, whose lawmakers have tabled five pieces of legislation urging a US-UK trade deal since June 2016, support for a bilateral deal unanimously runs through the White House all the way up to the President himself. For it is viewed by President Trump as a key opportunity to prove he can challenge the model of multilateral deals, and use new bilateral deals to bring jobs to America and wealth to Americans. The United Kingdom and a bilateral FTA will be the vehicle for that delivery, and the type of deal struck is seen as a template for replication by the UK around the post-Brexit world.
What Dr Gardiner made undeniably clear was just how well received the Prime Minister was both by the President and by congressional Republicans, bearing the fruit of earlier visits to Washington by her co-Chiefs of Staff and the Foreign Secretary.
The Heritage Foundation’s political and economic experts remain unmoved in their confidence that a trade deal can be formally signed within just 90 days of the UK exiting the EU. Though challenged on how realistic that timeframe was, Dr Gardiner maintained the argument he made to the House Committee on Foreign Affairs – that the majority of the negotiating will be done while the UK agrees the terms of Brexit with the EU27. Heritage experts do not consider financial services to be a sticking point between negotiators, owing to the existing levels of business and regulatory interconnectedness between the two financial centers. There was no suggestion of UK and US negotiators agreeing a TIFA (Trade and Investment Framework Agreement) as an interim step towards a full trade deal, with little regard shown for the threat of EU legal action issued were the UK negotiate with the US while technically still a Member State.
Negotiating the deal: Overcoming bumps in the road ahead
Support for a deal in the White House is total and its backing by the Republican majority in the Senate is expected to be unanimous. But the reality of negotiating a highly complex deal that touches the politically sensitive areas of services, agriculture and manufacturing could be hampered by issues of personnel.
Yes, the Department for International Trade has expanded its Trade Policy Group fourfold to over 180 since the Brexit vote. But it is seen to lack the required experience that American negotiators possess in abundance, having spent the last 40 years relying on Brussels to do the heavy lifting in negotiations. It was a sobering point driven home by Sir Ivan Rogers in his evidence to the Brexit Select Committee, and helps to explain why negotiators from Commonwealth countries have been seconded to DIT to aid preparation for trade talks.
Yes, the office of the US Trade Representative has negotiated FTAs with 20 countries and has over 50 active TIFAs in place. But it does not have a leader. Robert Lightizer, the nominee for US Trade Representative, still has not had a Senate confirmation hearing booked.
It is without question that there are technical difficulties to be overcome in order to pass a bilateral FTA in any time frame, let alone within 90 days of the UK having left the EU. Crucially though, both sides have political points to prove: that the US can succeed through bilateral not multilateral deals and the UK can flourish post-Brexit. It is precisely that political momentum that will be needed to get a good deal done.
The Special Relationship revitalised by the pursuit of a trade deal
The message from May and Trump appears clear: the US and UK will seek to negotiate a bilateral trade agreement that circumvents the European Union and its sluggish timeframe for getting trade deals done. The desire and intent is indisputable, though differences in policy and regulatory opinion will almost certainly emerge as negotiators get into the weeds of the agreement. Despite that, those at the Heritage Foundation are certain that the US-UK Special Relationship is set to be enhanced as it enters a major period of revival. That is something that we should all cheer on both sides of the pond.