Brexit Britain kicks off ambitious US and EU trade talks

Benefits from a US trade deal will not make up for the losses of leaving the EU, say analysts.

Tim Barrow - Getty
British Ambassador to the EU Tim Barrow arrives at the European Parliament to begin formal negotiations over the future relationship between the EU and UK [Leon Neal/Getty Images]

London, United Kingdom – A trade deal with the United States – under the best-case scenario currently published – could help grow the United Kingdom’s economy by as much as 0.16 percent, according to Whitehall’s negotiating plan.

If the UK were to eliminate all import tariffs on goods and services coming across the pond, it would stand to benefit by around 3.4 billion pounds ($4.3bn).

“Trading Scottish smoked salmon for Stetson hats, we will deliver lower prices and more choice for our shoppers,” Prime Minister Boris Johnson said on Monday.

The analysis was published as the UK simultaneously begins trade negotiations with the United States and with the European Union.

Johnson has frequently said he wanted a “Canada-style” trade deal with the EU, which the government’s own Treasury analysis says could shrink Britain’s annual economic output as measured by gross domestic product (GDP) by 4.9 percent by 2035.

Johnson has set the end of 2020 as the deadline to achieve a trade deal with the EU. Negotiators also hope to have the US deal wrapped up within a similar timeframe. 

By trade negotiating standards, that deadline is ambitious especially for a comprehensive deal, say analysts.

“It is unlikely that there will be a deal without significant UK concessions on level playing field conditions such as non-regression of labour and environmental provisions,” trade expert David Henig, UK director of the European Centre for International Political Economy, told Al Jazeera.

“This may be possible; we don’t know if the UK negotiators really believe their own position. But it will still be a thin deal. A deal this year will be difficult, will also require the UK to accept substantial parts of standard EU text, but is possible.”

‘Sovereignty’ vs trade-offs

Michael Gove, the UK minister responsible for Brexit, said it was “an exciting new era” in a newspaper column published on Sunday.

“Our aim is to secure, through a fair and measured approach, a comprehensive free trade agreement, and also find common ground on questions such as fisheries, internal security and aviation,” he wrote.

“I believe we can secure a great new deal for an exciting new era.

“But it is important that we are clear from the start that these negotiations are taking place in new times. Yes, we want the best possible trading relationship with the EU. But we will not trade away our newly recovered sovereignty.”

The UK, with its desire to escape regulatory alignment with the EU – “taking back control” in the words of the prime minister – still refuses to “acknowledge the trade-offs inherent in Brexit”, said Jon Worth, visiting professor at the College of Europe in Bruges, with European levels of trust in Johnson now lower than they were in November.

“How high does the cost [of diverging standards] have to be before the UK government says ‘OK, the price of control is too high. We will align there’? This is going to have to happen across all sorts of sectors – car type approval, aviation safety, food safety, energy markets,” he told Al Jazeera.

“You basically have the EU today going: ‘OK, UK, let’s start talking about all of these sectors, and where we can find common ground.’ And the UK replying: ‘We want to take back control’ – and the EU going ‘Yes … but what about all these sectors?’ Rinse and repeat – for months.”

But agreement between the UK and EU is not impossible, says Worth’s colleague, Michele Chang.

“I do think there is scope for compromise,” the professor of European politics and governance told Al Jazeera.

“Neither will get exactly what they want but that is what makes it a compromise. The EU has already shifted from its earlier demands on dynamic regulatory alignment, and there should be further scope to reach a deal with the UK.

“The UK is seeking a rather loose trading arrangement along the lines of Canada, which should be feasible if the EU lets go of its desire to treat the UK differently because of its geographic proximity. A failure to reach a trade deal would not be a good start to their new relationship. The timeline, however, is very ambitious – so that is an additional question mark for these talks.”

Salmon for Stetsons?

While much has been made of the UK and EU positions being at odds since both sides’ negotiating mandates were published last week, the potential UK-US deal has also sparked passions, notably concerning any threat to Britain’s beloved National Health Service and food standards.

“The NHS is not, and never will be, for sale to the private sector, whether overseas or domestic,” the government’s trade objectives document stated on Monday.

Chlorine-washed chicken and hormone-fed beef have raised concerns among consumers in the UK.

“Throughout the agreement, ensure high standards and protections for UK consumers and workers and build on our existing international obligations,” the document read.

“This will include not compromising on our high environmental protection, animal welfare and food standards.”

Trade Secretary Liz Truss on Monday warned the UK would “strike [a] hard bargain” and was prepared to “walk away if we need to”.

Source: Al Jazeera