Will the UK Sign a Trade Deal with the USA Before the EU?
The recent political landscape has seen a flurry of interest in international trade deals, especially for the United Kingdom (UK). With an ambitious timeline to negotiate and finalize a new trade agreement with the European Union (EU) by December 31, 2020, the question arises: will the UK sign a trade deal with the USA before completing its negotiations with the EU?
UK's Current Trade Policy with the EU
The UK government has set an ambitious timetable for signing a new trade deal with the EU, which falls due by the end of the year. This timeline is challenging to meet, given the complexity of negotiations and existing commitments. Currently, the UK's policy involves unilaterally ending quotas and tariffs on 87% of imports into the country. This move is planned to apply should the UK leave the customs union at the end of the standstill transition period without a replacement treaty.
Boris Johnson and his ministers have not deviated from this policy. However, when the UK does sign a new trade deal with the EU, the question remains: what tariffs will be applied to imports from non-EU countries? The UK may revert to the zero-tariff and zero-quota policy proposed by former trade minister Liam Fox in December 2016, or it may continue with its current unilateral trade policy.
Global Trade Talk: Other Countries' Views
The current stance of other countries regarding trade talks with the UK is indicative of the ineffectiveness of the UK's approach. For instance, Canada has no plans to begin trade talks with the UK, mainly because the UK's proposed zero-tariff policy is more favorable than the existing Comprehensive Economic and Trade Agreement (CETA) that still applies to the UK.
Japan also has no intention to initiate talks with the UK. This is due to their current deal with the EU, which still applies to the UK. The deal has opened up Japanese agricultural markets, and upon the UK's departure from the EU, this favorable access for UK imports ends.
US Interest and Political Dynamics
Given the current political dynamics, it seems unlikely that the UK will prioritize the EU over the USA. The US government has shown keen interest, backed by a favorable relationship between Prime Minister Boris Johnson and President Donald Trump. The USA offers a significantly easier process for trade agreements, requiring only 27 approvals as opposed to the EU's labyrinthine bureaucracy and current tensions over Brexit.
The UK USA trade deal is expected to happen in 2020. Boris Johnson can leverage this opportunity, especially considering the impact a whisper of a UK-USA free trade deal would have on the EU. Simply the prospect of such a deal would make Brussels shudder with concern.
Conclusion and Future Prospects
In summary, while the UK insists on prioritizing its trade deals with the EU, the current global trade landscape presents significant challenges. Other nations have shown hesitation to engage in trade talks with the UK until the outcome of UK-EU negotiations is clearer.
The UK's focus on the USA could be influenced more by the prospect of political leverage and a more straightforward process. It is essential for the UK to consider the broader strategic implications and potential benefits of aligning with the USA, especially in an increasingly complex and competitive global trading environment.