Today’s Trump-May press conference contained nothing of substance on the matter—and no wonderby George Magnus / January 27, 2017 / Leave a comment
Standing next to President Donald Trump, Theresa May spoke for rather longer than her host at their first press conference on Friday. The president said nothing at all about trade, while the Prime Minister left it to the end of her remarks to say that both sides aimed to build on their commercial relationship and that a trade deal would be in the interest of both countries. It is a bigger deal for the UK than for the US, but how should we assess the outlook and prospects?
For May, meeting Trump was an opportunity to show to people here at home—and also the European Union—that the UK is making Brexit plans involving the US. For Trump, backing Brexit offered another opportunity to show antipathy for the EU. He couldn’t actually care less about a trade agreement with the UK other than as a further expression of the Administration’s new trade strategies—to focus on bilateral trade deals, where the US can impose its economic heft and leverage, rather than regional deals such as the Trans-Pacific Partnership from which the US has just withdrawn.
It stands to reason that as the UK is proposing to leave the EU, which is the biggest free trade area in the world, it will need—as an exercise in damage limitation—to do bilateral trade deals with economically significant nations. In this respect, at least, May is probably knocking on an open door in Washington. But it isn’t water off a duck’s back, by any means.
As we think about the UK’s Brexit trade options, and a free trade deal with the US in particular, we should remember that there is no such thing as free trade, whatever your favourite politicians tell you. Rather, free trade deals are about trying to reach agreement about how to minimise the regulatory burdens on trade, covering not just tariffs and duties but a vast panoply of what are called behind-the-border trade restraints. These include product standards; rules of origin; public procurement and health and safety rules; environmental and labour standards; and rights of dispute and arbitration. Trump’s decision to renegotiate the North American Free Trade Agreement, for example, is expected to focus largely on…