UK to Negotiate Free Trade with US and EU Simultaneously

Alan Penny

6 January 2020

3 min read

  • UK leaving EU on January 31
  • Deal negotiated during 2020
  • PM signaled UK will conduct fruit trade talks with US at same time

In a sign of strong will, Boris Johnson signaled that the United Kingdom would be negotiating with both the European Union and the United States at the same time.

Johnson is aiming for a free trade agreement with both, but it is probably much more realistic to get a free trade agreement with US than it is with the EU. After all, part of the strategy by the Europeans has been to punish the British for leaving. They are concerned about other countries trying to leave the EU, as there are a lot of discontented people in places like Poland, France, Italy, and many other countries.

Quite frankly, if another large economy leaves the union, that could be it for the EU.

Negotiation timeline

The negotiation timeline gets accelerated due to the fact that the UK will be leaving the EU at the end of January. Granted, there is a bit of a “standstill period” between then and December, when nothing really changes. However, there is still a sense of urgency being felt, something that has been desperately needed.

With the Tories running the British government, things will finally get done, as they ran their campaign on a platform of getting out of Europe.

the British are essentially telling the Europeans that they can take their business elsewhere

The UK is now free to negotiate with other partners around the world. By getting the Americans involved, this puts a significant amount of pressure on the EU, as the markets are similar in size. In other words, the British are essentially telling the Europeans that they can take their business elsewhere.

The friendship between Boris Johnson and Donald Trump will certainly put a bit of a squeeze on the EU. One would have to think that this situation favors the British as far as negotiations go.

Beyond that, what is particularly telling about this scenario is that Donald Trump and Boris Johnson get along quite well, so it’s very likely that the Americans and British will come to terms with a deal rather quickly. In fact, Trump has already suggested this in the past, indicating that Great Britain would be at the “front of the line” when it comes to deals.

Possibility of free trade deal

Looking forward, the Americans and the British will possibly have something close to a free trade deal, if not an actual free trade deal. How things play out with the EU might be a completely different scenario, but more than likely, the Europeans will find it is in their best interest to bargain in good faith.

Now that the UK has a unified government, and perhaps even Donald Trump on their side, it’s very likely that the momentum has shifted to London. Furthermore, there are a lot of concerns out there that Donald Trump may move his focus to trade deals with the European Union now that “Phase 1” is going to be signed between the Americans and the Chinese. This could be a rough year for Europeans.

Written By
Alan Penny

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