If Brexit Britain wants a deal with Trump, our negotiators should study how the president operatesby David Henig / September 7, 2018 / Leave a comment
Confounding a significant number of predictions it looks like President Trump may deliver on his pledge to renegotiate NAFTA, the North American Free Trade Agreement. There are still hurdles to overcome, but Mexico has signed up in principle, and talks have now resumed with Canada, the third party to NAFTA. The president has started the process of notifying Congress, which has the ultimate say. He has until the end of September to submit the text to them for approval.
A successful conclusion is by no means a certainty. Canada could refuse a new agreement, and Congress could decide not to effectively replace a three-country agreement with one just involving the United States and Mexico. There may be controversies lurking within the text once this is released. Even so, we can still pick up some valuable clues about President Trump’s negotiating approach from NAFTA and interactions with EU President Juncker just before summer. These can help us to understand what could happen after Brexit in a UK-US negotiation.
First and most obvious, for President Trump it is still all about making the deal. US tariffs already imposed on steel and aluminium, those threatened on automotives, and those that could hit Mexico if the NAFTA agreement was simply terminated, forced countries to the negotiating table. Once at the table deals are found, even if they are messy. In the case of the agreement just reached with Mexico changes to the rules governing automotive exports were the centrepiece. Elsewhere, the EU promised more imports of US soybeans affected by retaliatory tariffs imposed by China.
This is of course an unorthodox way of making trade deals. One trade analyst recently bluntly stated that “no country in their right minds wants to negotiate with the US,” citing in particular the determination of Japan to avoid bilateral trade talks with Trump even when offered. For nothing has changed the president’s view that trade is a zero sum game where for the US to win the other country has to lose. The UK could be unique in actively approaching the US for a deal at the moment.
However there is a small possibility that this could work in the UK’s favour. The same analyst commented that “the special relationship will mean nothing,” but equally it is possible…