Open Britain Background Briefing: A Post-Brexit Trade Deal with Trump’s America

Overview

Many advocates of a hard Brexit seem to be under the illusion that the costs to the UK economy of leaving the European Single Market and the Customs Union can be cancelled out by a new free trade agreement between the UK and the United States.

However, this fails to take into account President Trump’s ‘America First’ approach to international trade, the fact that any trade deal would take years to implement and would be at the mercy of the US Congress, and the regressive nature of the United States’ long-held negotiating position, including on food standards and market access to public services.

This document busts some of the key myths around a potential UK-US free-trade agreement. It also documents some of President Trump’s increasingly erratic behaviour and his repeated insults of our country.

Obstacles to a trade deal

A trade deal with Trump would not be easy, fast or win-win. Far from it. There are at least seven reasons why hoping the US will save us from the damage wreaked by leaving the Single Market and the Customs Union is a flawed strategy.

1)     Trump's America-First protectionism. He has already pulled out of the Trans-Pacific Partnership (TPP) trade deal and is threatening to walk out of NAFTA. US Commerce Secretary Wilbur Ross recently summed up the Trump administration’s approach to trade when he said: “We’re asking two countries to give up some privileges that they have enjoyed for 22 years. And we’re not in a position to offer anything in return.”[1]

2)     The role of Congress in scrutinizing and signing off trade agreements. It seems highly unlikely they will be giving Trump fast-track authority. Even if Trump wanted to agree a swift deal, Congress and lobbyists will pick through it line by line, slowing it down and fighting to protect their own interests.

3)     Lack of certainty over the UK’s relationship to the Single Market & Customs Union. The US, like all other countries, won’t agree a deal with the UK without knowing the terms of future relationship with the EU.

4)     Divergent regulatory standards between the US and EU. US negotiators will demand the UK lowers its environmental and food standards and accepts products like hormone-treated beef, GM crops and chlorinated chicken. But doing so would make a close and frictionless trade relationship with the EU impossible. 

5)     Disagreement over level of access for US companies to the NHS. European governments refused to budge on this in talks over TTIP, the proposed US-EU trade deal, but Britain is now in a much weaker position.

6)     The difficulty of opening up the US services sector. Having realised how difficult a deal on goods and agriculture will be, Liam Fox now talks about wanting to negotiate a deal in services. It is implausible that the US would go along with a deal that covered only services. There are zero examples of any completed international trade deals only covering services. Negotiations on things like financial services take a long, long time.

7)     Negotiating free-trade deals with the USA takes a long time. The average length of time between when the US starts negotiating a free-trade deal, and when it’s implemented, is 45 months, or almost 4 years.[2] A quick deal would imply we’ve capitulated and allowed the US food and health companies full access to our market while achieving almost no access for our financial services sector.

Trump’s views about Britain

On numerous occasions, Trump has insulted, demeaned, ridiculed and lied about our country. It is a huge misconception to think of him as any kind of friend to the UK, or that he will be inclined to offer the UK a trade deal on favourable terms. The list below provides 9 occasions on which he has taken the opportunity to insult us:

1)     He insulted the Prime Minister after she criticized him for retweeting videos by the extremist hate group Britain First. “@Theresa_May, don’t focus on me, focus on the destructive Radical Islamic Terrorism that is taking place within the United Kingdom. We are doing just fine!”[3]

2)     He used a terror attack in London as a pretext to support gun ownership and to lie about the Mayor of London. “At least 7 dead and 48 wounded in terror attack and Mayor of London says there is "no reason to be alarmed!" Do you notice we are not having a gun debate right now? That's because they used knives and a truck!”[4]

3)     He tweeted a claim that the UK is trying to disguise a ‘massive Muslim problem’. “The United Kingdom is trying hard to disguise their massive Muslim problem. Everybody is wise to what is happening, very sad! Be honest.”[5]

4)     He has repeatedly demeaned female members of the Royal Family, including Princess Diana and the Duchess of Cambridge, Kate Middleton, by talking about them in crude sexual terms. Trump had the following exchange on air with Howard Stern about Princess Diana: "You could've nailed her, right?" Stern asked Trump. Trump replied, "I think I could've." Then in 2000, Trump once again reminded the world that he had wanted to have sex with Diana, saying, "she was crazy, but those are minor details." About Kate Middleton, he said "Kate Middleton is great--but she shouldn't be sunbathing in the nude--only herself to blame,". He also tweeted "Who wouldn't take Kate's picture and make lots of money if she does the nude sunbathing thing. Come on Kate!"[6]

5)     He has repeatedly insulted the Mayor of London, Sadiq Khan. After the attacks on Borough Market and London Bridge in July he launched an extraordinary attack on Sadiq Khan, tweeting: “At least 7 dead and 48 wounded in terror attack and Mayor of London says there is ‘no reason to be alarmed’!”[7] The reality, that Khan had in fact been advising the public not to be alarmed by the increased police presence, was apparently a “pathetic excuse”.

6)     He celebrated the collapse in the value of the pound as being helpful for his golf course. "When the pound goes down, more people are coming to Turnberry.”[8]

7)     He tried to tell the UK Government to appoint Nigel Farage as Ambassador to the US.  "Many people would like to see @Nigel_Farage represent Great Britain as their Ambassador to the United States. He would do a great job!"[9]

8)     He described Katie Hopkins as a ‘respected columnist’ after she wrote a piece about the UK’s ‘Muslim problem’. “Thank you to respected columnist Katie Hopkins of Daily Mail for her powerful writing on the U.K.'s Muslim problems.”[10]

9)     He has repeatedly attacked the BBC, including referring to the corporation as a “scandal ridden wasteland” @LeapfrogMark BBC is a scandal ridden wasteland--a one sided piece of garbage!”[11]

Quotes

Desperation for a quick trade deal:

Numerous hard Brexit-supporting politicians have portrayed negotiating a trade deal with the United States as the ultimate prize of leaving the European Union. Their belief that it can be done quickly is deeply concerning, as a quick deal would mean we’ve capitulated and allowed the US food and health companies full access to our market while achieving almost no penetration for our financial services sector.

“It’s very good news that the United States of America wants to do a good free trade deal with us and wants to do it very fast and it’s great to hear that from President-elect Donald Trump."

Boris Johnson, 12 January 2017

https://uk.reuters.com/article/uk-usa-trump-britain-johnson/boris-johnson-welcomes-trump-trade-deal-offer-idUKKBN1500UE

"So within two years, before the negotiation with the EU is likely to be complete, and therefore before anything material has changed, we can negotiate a free trade area massively larger than the EU. Trade deals with the US and China alone will give us a trade area almost twice the size of the EU."

David Davis, 14 July 2016

https://www.conservativehome.com/platform/2016/07/david-davis-trade-deals-tax-cuts-and-taking-time-before-triggering-article-50-a-brexit-economic-strategy-for-britain.html

“He [President Trump] is fine about the UK trade deal, I can tell you that because I was over in Washington about 10 weeks ago and the first thing they all said is ‘why aren’t we doing this now, getting this ready? Because we can do this in six months after you leave’.

Iain Duncan Smith, 30 June 2017

http://talkradio.co.uk/news/much-funding-northern-ireland-was-already-planned-tory-dup-deal-says-iain-duncan-smith  

Eagerness to lower UK standards:

It is also notable who are most vociferous in their support for a trade deal with Trump’s America are also some of the most vocal supporters of lowering our food and other regulatory standards.

“The British media are obsessed with chlorine-washed chickens, a detail of the very end-stage of one sector of a potential free trade agreement. I say no more than that."

Liam Fox, 24 July 2017

https://www.theguardian.com/politics/2017/jul/24/us-chlorinated-chicken-not-ruled-out-by-no-10-in-pursuit-of-trade-deals

"It is highly likely that we would manage to negotiate an FTA with the US in about 3 years, well before TTIP is completed, and one which is far more tailored to our interests than TTIP will ever be... Outside of the EU, there are two major potential benefits for the UK.

One, the ability to pursue lighter and better tailored regulation not possible under EU membership."

David Davis, 26 May 2016

http://www.daviddavismp.com/david-davis-gives-a-speech-making-the-case-for-brexit/

“I'm not in the least bit worried about chlorinated chicken..”

Jacob Rees-Mogg, Conservative Party Conference fringe event, 2 October 2017
http://www.independent.co.uk/news/uk/politics/jacob-rees-mogg-brexit-chlorinated-chicken-a7977621.html

“If it’s good enough on your side of the Atlantic it’s good enough on ours ... Our state machines will get their hands into it and they of course will try to make it about everything except trade. They’ll make it about ecological standards, and women’s rights, and child labour, and everything except the free exchange of goods and services, and that’s what opens the door to the corporate capture.”

Daniel Hannan, Speech at the Heritage Foundation, 7 Deceember 2016

https://www.desmog.uk/2016/12/07/millennials-regulations-hamper-trade-deal-success-brexiteer-tells-climate-denying-heritage-foundation 

Views of our European negotiating partners:

There can be little doubt that the Government’s courting of President Trump, and their clear intention to diverge from European standards in order to secure a trade deal with the US, has weakened our negotiating position in Brussels. 

“Britain lived in an equilibrium with Europe… But now it is becoming a vassal state, meaning it is becoming the junior partner of the United States.”
Emmanuel Macron, France Culture Radio, 27 January 2017
https://www.theguardian.com/politics/2017/jan/27/theresa-mays-trump-meeting-could-sour-brexit-negotiations 

“When I hear the US secretary of commerce, Wilbur Ross call, in London for the British to diverge with Europe to better converge towards others – towards less regulation, environmental, sanitary, food, probably also financial, fiscal and social – I’m wondering ... The United Kingdom has chosen to leave the European Union. Will it also want to move away from the European model?"
Michel Barnier, 9 November 2017
https://www.theguardian.com/politics/2017/nov/09/germany-leading-push-stricter-eu-line-brexit-talks-uk-chief-negotiator-financial-settlement

“By courting Trump, White House Chief Strategist Stephen Bannon, and other Euroskeptic figures in the US administration, May’s government is playing a dangerous and shortsighted game.”
Guy Verhofstadt MEP, Chief Brexit negotiator for the European Parliament, 26 January 2017
https://www.project-syndicate.org/commentary/theresa-may-trump-card-by-guy-verhofstadt-2017-01