Pitfalls of a Trump Trade Deal

Published on March 03, 2020

A US-UK Free Trade Agreement was a key prize highlighted by the Leave campaign during the referendum. Yesterday we got a sneak peak into what that may look like and we are considering whether this trade deal is quite the prize that we were told it would be.

The US’s Objectives

Since the US published its negotiating objectives in February 2019, the US has been very clear about its objectives for a trade deal. Concerns have been raised that these objectives could impact welfare, health and the environment in the UK.

The UK’s Objectives

Yesterday, the UK released its approach to UK-US trade deal negotiations (you can read the full mandate here). There are 4 key parts of the UK’s objectives that jump out as significant.

1. Increase in GDP?

Yesterday’s negotiating objectives highlight the fact that UK GDP could increase. However, the government’s own report predicts an increase of just 0.16% boost to the UK’s economy in a best-case scenario.

This small figure is even more negligible when compared to the considerable cost that Brexit has had and will continue to have.

2. Environmental Impact

The document says that the agreement will be “in line with the Government’s ambition on climate”. However, later in the document the government warns that the trade agreement could lead to an "increase the intensive use of chemical inputs and increase threats to biodiversity".

We are facing a climate crisis and we must not allow the environmental standards we enjoyed as part of the EU to drop. Instead we must either maintain or increase environmental standards, and the US trade-deal is one to watch.

3. Food standards

From Chlorinated Chicken to industrial scale farming with low animal welfare standards, food standards has been a key sticking point when it comes to a US-UK trade deal. Here is a list of just some of the potential food standards issuesthat we could face in a US-UK trade deal. As part of the EU we enjoyed much higher food standards than in the US, and this is not something we want to see change post-Brexit.

The objectives, at first glance seem to be saying all the right things: “This will include not compromising on our high environmental protection, animal welfare and food standards.”

However, it is unlikely that the US will sign a deal that does not have food standards in it. The negotiating team may see food standards as a small sacrifice to make for a big trade deal. Whilst Boris Johnson may choose not reduce UK food standards, the risk of the US importing food produced at a far lower standard and undercutting UK farmers is high.

4. The NHS

There was uproar following the statement from trump that “everything is on the table” when it comes to trade, including the NHS. This may be why the outline very clearly states that “the National Health Service (NHS) will not be on the table.”

This will be relieving to many of us who were concerned that our NHS might be dissected and sold for parts. Whilst this is promising, the government must be held to account on this. The current standards that we enjoy in the NHS from free health care to the sale of pharmaceuticals must be maintained or exceeded. Furthermore, whilst the UK’s objectives are saying all the right things, the fundamental question will be: is it possible to keep the NHS off the table, especially with the Trump administration that has rolled back health care in the US.

Are the UK’s negotiating objectives plausible?

Commenting on the analysis, European Movement CEO Hugo Mann said:

"When it comes to trade deals negotiating positions are important. After leaving the EU, the UK has to negotiate its own trade agreements for the first time in 40 years. Furthermore, it is negotiating trade deals with a number of other countries at the same time, not least the EU."

"Not only is the UK’s position weaker in terms of trading clout, but it is also the underdog. The US economy is six times the size of the UK’s and the percentage of UK exports to the US are significantly higher than the US’s exports to the UK. Combine this with Trump’s “America First” attitude and it becomes clear that compromises are going to have to be made."

"The UK has announced their objectives in a flurry of fighting talk, however, their position does not look promising. Therefore, we must fight to ensure that the standards that were maintained in the UK whilst we were part of the EU, are maintained and not weakened during these trade negotiations."

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