Why A Post-Brexit Trade Deal With The US Was Never Realistic
5 min read
Liz Truss this week confirmed what was privately widely accepted, but seldom admitted by ministers: that striking a post-Brexit trade deal with the US is not going to happen anytime soon.
Speaking to reporters on her to way to New York on Tuesday, the Prime Minister said no formal trade talks with the US were taking place, and that she didn't expect them to begin in "the short to medium term".
Her admission represented a personal retreat for the Prime Minister, who writing for The Telegraph as trade secretary in 2019 said that striking a trade deal with the US was her "main priority".
A US trade deal was seen by many Brexiteers as one of the greatest prizes to be had from leaving the European Union, as it would be a demonstration of the UK exercising its newfound freedoms.
Their hopes received a boost when former US president Donald Trump, who famously called himself "Mr. Brexit", promised a "massive" free trade agreement with Washington's close ally.
But for a number of reasons, that dream will not become a reality in the foreseeable future.
One of the main obstacles to a UK-US free trade deal is the thorny issue of food standards.
A key and well-documented demand of the powerful US agricultural industry is that the UK opens up its markets to beef, chicken and pork produced farmers on the other side of the Atlantic, to a very different set of standard to those previously set by the EU, and so-far continued by the UK since Brexit.
Speaking to PoliticsHome last summer, the American Farm Bureau Federation's Dave Salmonsen said that food standards was a "continuing issue" between the UK and the US, and that the US sector was keen to see "how far the UK is willing to go" in its post-Brexit trade regime.
The point of contention is that the US agricultural industry, which allows chlorinated chicken and hormone-enhanced beef, adheres to different – and most people agree, lower – standards than the UK when it comes to food hygeine and animal welfare.
The UK followed a strict standards regime when it was part of the EU and successive Conservative governments have vowed not to lower them now that the country is no longer in the bloc.
The US practice of washing chicken in chlorine in particular has become the totemic case study.
Brussels has banned chlorinated chicken from entering its markets, arguing that the chemical is used to cover up signs of poor hygeine and unacceptable treatment of the animals.
Tory ministers have also had to consider the potential for public backlash, as opinion polls have consistently shown that the majority of people are against the idea of lowering food standards.
Then there is Washington's concern about Northern Ireland – specifically the UK approach to negotiations with the European Commission over the post-Brexit protocol for the region. The UK has been warned that there will be no post-Brexit trade deal with the US under any circumstances if its approach to the Northern Ireland Protocol disrupts hard-won peace and stability in the region.
Many US politicians have a deep interest in Northern Ireland and affairs on the island of Ireland.
Some of them – like President Joe Biden – have Irish ancestry, and the Bill Clinton administration played an important role in brokering the Good Friday Agreement peace deal in 1998.
The Northern Ireland Protocol has bedevilled UK-EU relations since it came into force at the beginning of last year. The agreement was designed to avoid a contentious hard border on the island of Ireland, but did so by creating controversial new barriers to trade in the Irish Sea.
Northern Ireland's second largest party, the Democratic Unionist Party, has spent months blocking the formation of a government in Belfast over its fierce opposition to the post-Brexit treaty.
The Biden administration has repeatedly urged the UK and EU to find a negotiated solution.
In Biden's first call with Truss after she became Prime Minister earlier this month, the two leaders discussed the "importance of reaching a negotiated agreement with the European Union", according to the White House readout of their conversation.
Truss has threatened to unilaterally scrap the protocol through legislation if the EU does agree to her demands. This would not only exacerbate tensions with Brussels but risk a major US rebuke.
Food standards and Northern Ireland aside, at the moment there is no huge appetite in Washington to strike a free trade deal with the UK now it is outside of the EU.
The Trade Promotion Authority, which for years has helped presidents negotiate trade deals with other countries, expired last year – but the Biden administration has appeared to show little interest in renewing it. Trade deals eat up a lot of legislative time, and Biden has a busy domestic agenda.
It is also true that there is little to be gained – at least economically – for the UK in shaking on a trade deal with one of its closest allies.
While a trade deal with the US has been allowed to acquire great symbolic value in British political discourse, it would only add beween 0.2-0-4 per cent to GDP in the long term, according to the government's own analysis.
This appears to be reflected in the government's latest thinking.
A Downing Street spokesperson said on Tuesday that the government was "continuing to grow" the UK's economic relationship with the US without a trade deal and that the Department for International Trade was working on doing deals with the US at the "state level".
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