Doubts that US-UK trade deal can be done 'very, very quickly'

Donald Trump has asserted that a trade deal between the US and the UK can be agreed quickly in the wake of Brexit. However, doubt has been cast whether it will be enough to make up for potential losses.

The US and UK are working towards a post-Brexit trade deal
Doubts have been cast on President Donald Trump's assertion that a trade deal can be agreed between the US and the UK "very, very quickly" after Brexit. Mr Trump made his claim after talks with Prime Minister Theresa May at the G20 summit in Hamburg over the weekend. After the summit, Mrs May said that not only the US but also Japan, China and India had shown "great interest in working with us on trade arrangements in the future".

Trump supports a ‘very special relationship’

After a 50-minute meeting with Mrs May, Mr Trump declared, "There is no country that could possibly be closer than our countries. We have been working on a trade deal which will be a very, very big deal, a very powerful deal, great for both countries and I think we will have that done very, very quickly. "Prime Minister May and I have developed a very special relationship and I think trade will be a very big factor between our two countries."Mrs May also discussed future trade arrangement in a 20-minute meeting with her Japanese counterpart Shinzo Abe, during which the two agreed the latter's new trade deal with the EU "could form the basis" of an agreement between London and Tokyo following Brexit.
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Additionally, Prime Minister Narendra Modi of India told Mrs May that he wanted to see economic links with the UK deepen after Brexit and they agreed to work together to put a "concrete" plan in place, according to a UK government official. Mrs May also held talks over a future trade deal with President Xi of China.Mrs May said she was "optimistic about the opportunities that we will see in the rest of the world". She added, "Some of the countries I have been talking to here who have shown great interest in working with us on trade arrangements in the future, the United States, Japan, China, India, these are all huge world economies."This is an important development for the United Kingdom and I look forward to developing those trade deals as well."The prime minister also said she was confident the UK could secure a good deal with the EU "because it's not just about what's in the interests of the United Kingdom, it's about what's in the interests of the remaining 27 members states in the European Union and I think it is in the interests of both sides to have that good trade agreement".

Ensuring a good deal for the UK

But Paul Drechsler, president of the Confederation of British Industry (CBI), told Sky News that negotiating trade deals was "a dog eat dog activity" and that every deal was not "necessarily a good and fair deal for both parties".He said, "The USA has one of the best negotiating teams in the world in terms of trade deals, we don't want to walk into a bear hug and I would be wary of trying to be too fast on a trade deal. The important thing is to know what we want to achieve, what the objectives are and what the trade-offs are."Mr Drechsler said businesses were "no wiser" about what the future trading relationship will look like than they were a year ago and he defended the organisation's call – since rejected by Mrs May – for a transitional deal that would keep Britain in the single market and customs union until a comprehensive trade deal with the EU was reached."As soon as anybody defines a plan for exit, sets out what it means, then we can transition," he said. "But in the meantime we don't have a plan, businesses around the country need to make decisions on investment, on whether to put their headquarters in the UK or somewhere else, on whether to place jobs in the UK or somewhere else. "Those decisions are being taken now, so it's not about buying time. As soon as somebody has the plan then of course we can know what the future holds. At the moment we don't."We are no wiser today than we were 12 months ago in terms of what conditions business will be able to plan on for the future."Mr Drechsler said politicians should have an "honest conversation" with voters and not chase headlines. "There is a wonderful future ahead of us but we have to recognise there are also threats and challenges to that and I would just encourage everyone, let's ease up on the vitriol and let's focus on the facts and evidence," he said.

Will the trade deal be enough?

Additionally, Justice Secretary David Lidlington told the BBC that a trade deal with the US, even if it could be done quickly, would not be enough to make up for the economic damage caused by Brexit.Asked if a US-UK deal would be enough to compensate for Brexit, Mr Lidlington said, "It wouldn't be enough on its own, no. But it would be a very good thing to have, as would trade deals with the emerging economies of Asia and Latin America."Certainly, one of the frustrations sometimes about being part of the EU is that while the mass of the EU gives it some leverage in international trade, it moves sometimes at a tortoise-like pace because all the member states have to agree a common negotiating position."Alistair Carmichael, the Liberal Democrats' chief whip, said, "David Lidington is just saying what everyone knows. That is that the Brexiteers have set off down this route with no plan, and no idea how to make up for all the trade we will lose with Europe with all these mythical trade deals. This would be laughable if it wasn't so important. "The only person who has shown some interest in talking to them is Donald Trump, but that might change tomorrow based on the president's irrationality. The Tories are mucking this all up and putting millions of jobs, investment and our economy at risk."
Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.
For related news and features, visit our Brexit section.

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