August 3, 2017
Even in the span of his 10-day stint as White House communications director, Anthony Scaramucci managed to raise eyebrows not only in Washington but in London and Brussels, too. During the visit of Britain’s International Trade Secretary Liam Fox to the US capital in late July, Scaramucci said he was “100% certain” there would be a US-UK trade deal post-Brexit, citing the “special” bilateral relationship and Trump’s fondness for Britain as reasons why the agreement would be secured.
But comments that Fox made during his trip suggested that such a deal wouldn’t go through so easily. He said lowering British food standards to allow the import of products permitted under US regulations, such as chlorine-washed chicken, was an insignificant detail in the negotiation process, prompting outrage from members of his own cabinet and from EU lawmakers. The kerfuffle shows that despite optimistic rhetoric – such as Trump’s recent tweet about a “big & exciting” bilateral trade deal – Britain would do better to focus on preserving or building trade relations with more promising partners, especially with emerging markets in the Gulf and the Commonwealth nations.
Following Fox’s ill-advised comments about bringing in chlorinated chicken – a product that’s banned by Brussels – Environment Secretary Michael Gove responded by claiming that the UK won’t commit to any deal that involves such a race to the bottom. Meanwhile, EU officials, like Gianni Pittella, leader of the socialist group in the European parliament, warned that Fox didn’t understand the implications of maintaining trade with the bloc if the UK lowered its import standards. The spat just goes to show that agriculture is likely to be only one of numerous sticking points whenever negotiators start hashing out the fine print of a possible deal. In addition, despite enthusiastic rhetoric on both sides, it’s Britain that will hold the weaker set of cards at the table, which throws yet another wrench into the process. Currently, the UK is America’s sixth-largest trading partner, while the US is Britain’s most important market outside of the EU – meaning that London needs Washington far more than the other way around. It seems that in the end, Fox might well have to choose between opprobrium on his home turf or no deal with the US at all.
Luckily for Britain, such panoply of issues doesn’t apply to other candidates for new free trade deals. For instance, when it comes to the Gulf states, particularly Saudi Arabia, the scales are far more evenly balanced. In a series of talks over the past nine months, Prime Minister Theresa May and Gulf Cooperation Council (GCC) heads of state have already talked up their desire to quickly secure a free trade deal post-Brexit. And when it comes time to hammer out the details of such an agreement, hot-button issues like agriculture won’t be at the top of the agenda. For instance, Britain’s trade with Saudi Arabia, its most significant economic partner in the region, is concentrated in goods and services like transport equipment, industrial machinery, and road vehicles, which are far easier to exchange across borders than meat and produce. On top of that, as Crown Prince Mohamed bin Salman leads efforts to diminish the treasury’s addiction to oil revenues and attract foreign investment, he needs partners like the UK far more than the US does.
Certain former Commonwealth nations are also far more promising candidates for a quick trade deal. For instance, countries like New Zealand and Australia have expressed their eagerness to reach an agreement as soon as possible post-Brexit. In a visit to Wellington last week, Foreign Secretary Boris Johnson returned the sentiment, assuring the government that New Zealand was “at or near the very front of the queue” for a deal. The same applies to Australia, the first country with which the UK established a joint Trade Working Group after the EU referendum. Theresa May said a trade deal with Australia was a “priority” for Britain to build on the £14 billion in bilateral trade after Brexit. Meanwhile, then-Prime Minister Tony Abbott went so far as to suggest that the countries could strike a “one page” free trade deal – an oversimplification, of course. The potential deals are further facilitated by the fact that food safety standards between Australia and New Zealand on one hand, and Britain on the other, are far more aligned than the US.
In any case, the recent media tempest over the nitty-gritty subject of chicken import standards has missed the bigger picture. When it comes to negotiations with the US, the deal just as likely to be side-lined by President Trump’s deep-seated protectionist streak as by disagreements over food regulations – all talk of a “special relationship” or “big trade deal” notwithstanding. And while prospects for a deal with countries like Australia are more promising, Chancellor of the Exchequer Philip Hammond just suggested that the UK won’t be able to introduce any new bilateral trade agreements until at least 2022, as Britain would seek a traditional period of trading and free movement with the EU for up to three years. It seems that despite claims that Brexit would mean the launch of a new, “global Britain,” there are going to be numerous hurdles on the road there.