The New Trade Deal With The US - Is It Worth It ?

[yorksrob]

I was reading this article about the proposed US trade deal in the following article:

Navigating relationships via video calls has become a defining feature of the lockdown - and policymakers are no exception.

As International Trade Secretary Liz Truss and the US trade representative Robert Lighthizer kick off talks remotely, they're hoping that a long distance courtship won't be an obstacle to deeper ties - a deal which boosts output and jobs by cutting the charges and restrictions on trade.

The "special relationship" is already a lucrative one. More than £220bn worth of goods and services are traded between the two nations, their companies responsible for millions of jobs on the other's home turf.

The UK is hoping to capitalise on its new-found ability to strike free-trade deals with more opportunities for exporters of cars, ceramics and whisky, for example.

However, this won't be an easy ride into the sunset.

But there are sticking points. The US wants more access for its farmers to British markets, cue talk of chlorinated chicken and hormone treated beef.

President Trump is unlikely to back down on this as he tries to woo voters ahead of an election in country where one in six workers have filed for unemployment benefits in recent weeks.

And more access is likely to mean the UK having to relax standards and regulations - that, along with areas such as pharmaceutical prices, will meet with strenuous opposition from this side of the water.

Even if these hurdles are overcome, the gains may be modest. The Department for International Trade's own analysis suggests that Britain's economy would be just 0.16% - or £3.4bn - bigger in 15 years - if all tariffs with the US are eliminated. And that scenario goes beyond the UK's objectives; in reality, the boost could be even smaller.

Both sides are desperate for speed, to show at least some easy wins, perhaps in areas such as manufactured goods or financial services.

UK-US trade talks will not be an easy ride

Both sides are desperate for a speedy agreement, but there are clear sticking points.

www.bbc.co.uk

The thing that struck me was the following line: "The Department for International Trade's own analysis suggests that Britain's economy would be just 0.16% - or £3.4bn - bigger in 15 years - if all tariffs with the US are eliminated. And that scenario goes beyond the UK's objectives; in reality, the boost could be even smaller"

This seems to be a comparatively small benefit over a very long time, and given any gains are likely to result from politically sensitive concessions for both sides, would we not be better off sticking with the current arrangement, which is already very lucrative. It seems to me that any additional deal would be scraping the barrel. From our point of view, we're talking about potentially diluting the NHS's ability to bulk buy pharmaceuticals and then there's the whole farming issue, and there are doubtless things we would be angling for that the American electorate won't want.

Is it time to reiterate how good the relationship between our countries already is, but to concede that for the sake of both of our democracies, there's good reason why we haven't gone further.

 

[edwin_m]

I've posted this before but it bears repeating:

The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.

Donald Trump (or ghostwriter), The Art of the Deal

 

[najaB]

The New Trade Deal With The US - Is It Worth It ?

On economic terms, no. The whole Brexit project is going to be an absolute, unmitigated, self-inflicted disaster, and we're all going to be poorer as a result of it for at least a generation.

On nebulous, non-quantifiable, terms like "sovereignty" and "self-determination"? Maybe? I dunno.

 

[edwin_m]

On nebulous, non-quantifiable, terms like "sovereignty" and "self-determination"? Maybe? I dunno.

Anyone who honestly believes those things are important certainly shouldn't be supporting a US trade deal of the type it's looking like it will be.

 

[yorksrob]

On economic terms, no. The whole Brexit project is going to be an absolute, unmitigated, self-inflicted disaster, and we're all going to be poorer as a result of it for at least a generation.

On nebulous, non-quantifiable, terms like "sovereignty" and "self-determination"? Maybe? I dunno.

I do think that there comes a point where these sort of deals dilute the ability of countries to exercise democratic control over how their economies work. Things that ought to be decided democratically suddenly become enshrined in an international treaty.

My argument isn't from an anti-America perspective. Quite the opposite - as citizens of a mature democracy, Americans should have democratic control over their economy as well. We probably already have the best deal with them to suit our needs, and in truth, probably theirs, so perhaps we ought to just acknowledge the fact and move on.

 

[37424]

I do think that there comes a point where these sort of deals dilute the ability of countries to exercise democratic control over how their economies work. Things that ought to be decided democratically suddenly become enshrined in an international treaty.

My argument isn't from an anti-America perspective. Quite the opposite - as citizens of a mature democracy, Americans should have democratic control over their economy as well. We probably already have the best deal with them to suit our needs, and in truth, probably theirs, so perhaps we ought to just acknowledge the fact and move on.

Indeed but to the Hard Brexiter's it seems to be a holy grail and a way of supposidly compensating for some of the loss of trade that will result from their Hard Brexit deal or No Deal. The trade we have at present is in our favour and any trade deal is likely to lead to concessions which many wont like, better to keep as is and have a good trading relationship with the EU however that's not what Johnsons UKIP Tory's want.

 

[najaB]

We probably already have the best deal with them to suit our needs, and in truth, probably theirs, so perhaps we ought to just acknowledge the fact and move on.

The problem is that we don't have a trade agreement with the USA, the EU has one. Come the end of the transition period it's either WTO rules or a new agreement.

 

[yorksrob]

Indeed but to the Hard Brexiter's it seems to be a holy grail and a way of supposidly compensating for some of the loss of trade that will result from their Hard Brexit deal or No Deal. The trade we have at present is in our favour and any trade deal is likely to lead to concessions which many wont like, better to keep as is and have a good trading relationship with the EU however that's not what Johnsons UKIP Tory's want.

Going by the Government's own figures, it's not going to compensate for much. I fear that such a deal would be evaluated for its symbolic, rather than its actual value.

The problem is that we don't have a trade agreement with the USA, the EU has one. Come the end of the transition period it's either WTO rules or a new agreement.

That may be true from a technical point of view. But for both countries, it's probably as difficult to roll back elements of the existing arrangements as it is to add new bits.

 

[37424]

The problem is that we don't have a trade agreement with the USA, the EU has one. Come the end of the transition period it's either WTO rules or a new agreement.

I'm confused what you mean by that as I didn't think the EU had a significant Trade deal with the USA, if your talking about the UK and the EU then obviously we need to find a new agreement.

 

[najaB]

I'm confused what you mean by that as I didn't think the EU had a significant Trade deal with the USA, if your talking about the UK and the EU then obviously we need to find a new agreement.

There isn't a comprehensive EU/US trade deal, but rather a number of separate protocols covering individual products and/or services. Those are what would need to be replicated.

 

[37424]

There isn't a comprehensive EU/US trade deal, but rather a number of separate protocols covering individual products and/or services. Those are what would need to be replicated.

That's true but I would think that could sorted fairly quickly if both sides agreed, but a comprehensive trade deal which both sides now appear to want somewhat more difficult

You can also bet that if the UK does strike a comprehensive deal, the EU will suddenly be re sparked to find one with the USA as well.