Brexit Made Simple – Issue Four, PROSPECTS FOR A UK-US TRADE DEAL

What is the issue?

The Vote Leave campaign insisted before the 2016 referendum that agreeing a post-Brexit trade deal with the United States would be straightforward.  

But the truth is somewhat different. 

Further, whilst the UK Government has said little about what a UK-US trade deal might looks like, it seems the Trump administration’s goals for such an agreement will negatively impact on UK health, welfare and the environment.

What was said before Brexit?

Speaking at a joint news conference with UK Prime Minister David Cameron during the final weeks of the EU referendum campaign, US President Barack Obama warned that the UK would be at the “back of the queue” for a trade deal if the country voted for Brexit.

Obama said: “I think it’s fair to say that maybe some point down the line there might be a UK-US trade agreement, but it’s not going to happen any time soon because our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done.”

Responding for the Leave campaign, Boris Johnson described President Obama’s comments as “ridiculous and weird.” (Speaking a few days earlier, Johnson claimed that Obama’s “part-Kenyan” heritage had led him to be anti-British).

Johnson said: “It is ridiculous to warn that the UK will be at the back of the queue for a free trade deal.” 

He added that the only reason the UK did not already have a trade deal with the US was that being a member of the EU hampered negotiations.

What about President Trump?

Speaking last month after a telephone call with Johnson, Donald Trump said they were “very much aligned” on the issue.

He said: “I think we'll make a fantastic and big trade deal with the UK. That's moving along rapidly.”

This message was reinforced by US Vice President Mike Pence during a visit to London last week. 

He told the Lord Mayor’s International Trade Dinner: “We believe a free trade agreement between the United States and the United Kingdom could increase trade between our two countries three or four times.”

Pence added: “When you’re ready, we’ll be ready.”

And the US Congress?

A point often forgotten – and apparently not understood by the Trump administration - is that all US trade deals must be approved by Congress before they can come into effect.

With the Democrats in control of the House of Representatives, any agreement must therefore win favour with House Speaker Nancy Pelosi. She has already made clear that a failure to deal satisfactory with the Irish border issue would mean that the Democrats could not support a trade deal.

Speaking in Dublin earlier this year, Speaker Pelosi said: “We must ensure that nothing happens in the Brexit discussions that imperils the Good Friday accords including, but not limited to, the seamless border.”

On the prospect of a UK-US trade deal, she said: “That’s just not on the cards if there’s any harm done to the Good Friday accords.” 

Democrat senator Chris Murphy added that there was “no chance” of a deal in the event of a hard border.

And concerns are not just the preserve of the Democrats. Republican Congressman Peter King said it was “important” that an open Irish border was maintained.

What are Brexiteers saying now?

Predictably, Boris Johnson quickly played down the prospects of a UK-US trade deal after becoming Prime Minister.   

Speaking last month, he said that reaching an agreement would not be “plain sailing.” 

Are there other complications?

Yes, major complications. 

Johnson has been forced to concede that “compromises” from Trump would be required for progress to be made. However, compromise is not in the Trump playbook – even for his “great friend” in 10 Downing Street.

Johnson has said that the US Government’s wish for American companies to access NHS contracts is “not on the table.”

He claims to be opposed to the UK accepting US chlorinated chicken and hormone-infused beef.

However, the head of the American Farm Bureau – the US farming lobby –– has insisted that the UK must accept US food standards including chlorinated chicken and genetically modified (GM) products.

EU has not approved any fresh GM fruit or vegetables for human consumption. But US regulations are particularly lax, meaning GM crops are prolific and account for 90 per cent of soybeans, cotton and corn.

Johnson has also admitted that, in a telephone call last month, he advised Trump of a number of other barriers to a UK-US trade deal.

These included:

• The failure of the US to resume imports of UK beef since the 2014 lifting of a ban imposed because of mad cow disease
• Food and Drug Administration rules which block the sale of Melton Mowbray pork pies
• Limits on the number of ports which can accept deliveries of UK cauliflowers and a complete ban on UK bell peppers
• Restrictions on the sale of UK-made shower trays, whose lips are too low for US standards regulations
• Requirements for UK wallpaper, pillows and fabrics to be subjected to additional fire tests in the US, despite already being tested in the UK
• US tariffs of 14 per cent on railway carriages imported from the UK, when the same product exported from the US to the UK attracts a tariff of just 1.7 per cent
• Requirements for UK wines to be sold through US distributors and a ban on UK micro-breweries that does not apply to US beer-makers in the UK
• The need for UK insurance firms to deal with as many as 50 US regulators, compared with two in the UK
• Public procurement rules which mean that all branches of the US military are banned from purchasing measuring tools like rulers from UK stationery companies

Dr Jason Aldiss BEM

Managing Director, Eville & Jones

10 September 2019

You can follow me on Twitter @JasonAldiss