“While trade deals have taken on an important political and symbolic value in the context of Brexit,” Dominic Walsh of Open Europe wrote recently on this site, “their economic benefits are typically smaller and slower to materialise than many realise.” This is the place to start when considering a possible UK-US agreement on trade. Boris Johnson’s enthusiasm for one is as much political as economic: a successful deal would show Britain, as it moves a bit further from the EU, also moving a bit closer to America.
Such a rebalancing is a strategic consequence of Brexit, at least in the eyes of many backers of leaving the EU. Future trade deals were a Vote Leave EU referendum priority – though it may be significant that the United States was not one of the headline countries named. Perhaps the reason was a wariness of anti-American sentiment among a section of the voting public. None the less, the prospect of a trade agreement with the United States was mooted during the 2016 campaign: hence Barack Obama’s line, written for him by Team Cameron, of Britain being “at the back of the queue” for such a deal.
The obstacles to one are formidable. For while the Prime Minister is bound to view it through the lens of politics, Donald Trump is more likely to do through that of economics – though the one admittedly tends to blur into the other. America’s approach to such matters as food safety and animal welfare, environmental protection and intellectual property rights is different from ours in any event. Never mind the red herring of chlorinated chickens – so to speak – or autopilot claims from Corbynistas about NHS selloffs. The real action is elsewhere. The United States has long had a protectionist streak, and is resistant to opening up its financial services markets, for example.
The conventional view is that Trump is the biggest America Firster of all; that he would drive a hard bargain, that he has the muscle to do so – and that he wouldn’t be in control of an agreement anyway. Congress could block one if it wished, and might well do so in the event of No Deal, since the Irish-American lobby is as well-entrenched as ever. It has been a headache for British governments over Ireland-linked matters before: remember the McBride principles. A different take is that politics may win out in the end, because both Trump and Congress will want a UK trade deal in order to put economic and political pressure on the EU: we will publish more about that later this week.
John Bolton, Trump’s National Security Adviser, is visiting Britain. He said yesterday that the UK will be “first in line” for a trade agreement post-Brexit – a deliberate counter to Obama’s line. Bolton will be dangling the prospect as an inducement. He will want Johnson to take a more resistant line to Huawei than Theresa May did, and for the UK to move closer to America’s position on Iran. But the possibility of early sector deals – or at least the exclusion of Britain from new pro-protection moves – seems to be real enough. As with the NHS, policing, immigration and stop and search, so with trade. Johnson wants progress towards a quick win as a possible election looms.