Sun Sentinel Palm Beach Edition
US-UK trade deal vital? Nope
American pact far less key for Britain than its parallel talks with EU
LONDON — When Prime Minister Boris Johnson of Britain used to talk about a new trade agreement with the United States, he often fell into the baroque language — “massive,” “fantastic,” “enormous” — of President Donald Trump, the man he figured would be sitting across the bargaining table from him.
Trump has not dialed back his tone about the deal’s potential — it would be “magnificent,” he promised when the two men met at the United Nations last September — but Johnson certainly has, a reflection of both economic and political reality.
As his government laid out its objectives for the negotiations with Washington on Monday, Johnson emphasized instead the points Britain would not give up in a negotiation — chief among them, food safety and the sanctity of the country’s National Health Service. He did not play up the Texas-size windfall from a deal, as he once did when he sold it as a lucrative fringe benefit of Brexit.
“We’re going to drive a hard bargain to boost British industry,” Johnson said. “Trading Scottish smoked salmon for Stetson hats, we will deliver lower prices and more choice for our shoppers.”
In its negotiating blueprint, Johnson’s government predicted that even if the talks were successful, an American deal would expand the British economy, at most, by 0.16% by the middle of the next decade.
This more circumspect tone reflects the realization that a trade deal with the United States was always going to be far less important for Britain than its parallel talks with the European Union, given their greater trade and closer integration.
As the trans-Atlantic talks get underway, the politics of a deal are becoming complicated on both sides of the ocean.
The presidential election in the United States means that Congress is highly unlikely to approve a trade deal with Britain, even if Johnson and Trump sign one before November.
In Britain, Johnson’s free-spending domestic agenda — recruiting nurses and police officers, building high-speed broadband and rail networks — offers a bigger political payoff than easing tariffs on Scotch whisky.
“This isn’t the No. 1 priority that people thought it was going to be,” said Sam Lowe, a trade expert at the Center for European Reform. “From Johnson’s point of view, it makes more sense to focus on the domestic economy.”
Johnson’s priorities became clear last month when he agreed, over the objections of the United States, to allow the Chinese telecommunications firm Huawei to supply equipment to Britain’s 5G broadband network.
Even leaving aside Huawei, some experts question how much of an economic incentive there is to do a deal. The United States is not trying to recast an unbalanced relationship as the Trump administration is doing in its negotiations with China. The United States currently runs a $5.5 billion surplus with Britain in goods, and $13.3 billion in services — numbers that would normally make Trump smile.
Both countries are competitive in industries such as finance and digital services; executives in those industries say they could benefit writing rules looser than those of the European Union. But Britain must still decide whether to tax American firms like Google, Facebook and Amazon.
The Trump administration will push to reduce barriers to its farm products and press the National Health Service to pay more for American drugs — both of which raise vexing political issues in Britain.