The Brexit Plan Undermines Britain’s Plan to do Business with the US
It is only right to wonder whether Britain can have a close trading relationship with the European Union and at the same time achieve a free trade deal with the US. President Donald Trump will meet the British Prime Minister Theresa May on Friday, and one of the top issues on their agenda is the probability of atrade deal between the two countries.
Interestingly, Trump has issued some unfavorable comments about the UK’s exit from the European Union but he has also promised the country a good deal. However, there is a significant barrier; the Brexit. On Thursday, the UK government published the Brexit plan which is tailored to keep the country associated with the EU in key areas, but restricting its ability to negotiate new trade agreements severely.
Peter Holmes, a trade expert at the University of Sussex says that it not reasonable to assume that Britain can stay close to the EU and still manage independent trade deals. The Brexit proposal intends to maintain frictionless goods trade with the EU and shun border checks and tariffs dreaded by companies that feature complex chains or deal in agricultural goods with a short shelf life.
Therefore, the proposal will bar Britain from offering other countries such as the US, tariff concessions or regulations that build the basis of free trade deals. Thus, the talks between the two leaders may not feature concessions on regulations since Britain has to maintain her alignment with the EU.
The Brexit proposal has been viewed as a stumbling block with some of its opponents disagreeing with it. The protest has seen the resignation of Boris Johnson as the UK foreign secretary on Monday. In his resignation letter to May, Johnson saidthat the surrendering of Britain’s rulebook for goods and agri-foods will make it challenging to conduct free trade deals,
The US ambassador to Britain, Woody Johnson, seems to agree with Boris by saying that the possibility of bilateral trade between the two countries was now off the table. Additionally, it will be challenging for the UK to offer concessions on services which account for 80 percent of the economy.
The Brexit plan also calls for a customs arrangement in the future where Britain would collect EU tariffs on trade goods bound for the bloc. That means that the UK would be able to set its tariff rates and offer concessions to other countries to comprise a trade deal.
However, critics say that the tariff plan is characterized by vagueness. Additionally, such a proposal would be rejected by the European Union.