The UK government's wish to negotiate trade deals with other countries after Brexit was the key reason why it said it could not agree to follow EU rules in future – and in turn the cause of much of the difficulty in implementing the Northern Ireland protocol.
But now the big prize touted during the Brexit process – a trade deal with the US – appears off the table, leaving Boris Johnson’s government casting around for what to do next. What happens will tell a lot about where UK trade policy goes after Brexit – and all the signs are of considerable confusion.
While Donald Trump had talked up the prospect of a UK-US trade deal when he was in the White House, President Joe Biden is a lot less enthusiastic, as he made clear to Johnson this week in Washington. This led to UK briefings that it would instead seek to join a trade deal already in place between the US, Canada and Mexico – the suggestion was that this would be a kind of back door into getting access to the US market, if a bilateral deal was not on the cards. The US-Mexico-Canada Agreement (USMCA) was negotiated by Trump as a replacement to the North American Free Trade Agreement, the deal between the three parties in place since 1994.
Shot in dark
However, the prospect of the UK joining it appears more a shot in the dark than a thought-out policy. The UK already has trade deals with Canada and Mexico. And, according to Sam Lowe, senior research fellow at the Centre for European Reform in London, "it is unclear why negotiating with the US under the auspices of the USMCA would be easier than negotiating with the US bilaterally. All of the controversial issues that make it tough for the UK to do a deal with the US will be the same."
The affair underlines the economic cost of Brexit, which has hit trade between Britain and the EU
The problem for London is that the Biden administration just doesn’t see a trade deal with the UK as a priority.
Democratic member of congress Brendan Boyle, who serves on the Ways and Means Committee which has a key role in trade deals, tweeted that just 2.5 per cent of US trade was with the UK, compared to 30 per cent with Canada and Mexico. "So when some are confused why a trade deal with the UK isn't a high priority, now you know."
As well as the lack of interest in the US in striking a deal, Lowe points out that other familiar problems remain, whether London is negotiating a bilateral deal or membership of the USMCA. These would include US demands for access to the UK market for food products made using US standards – such as chlorine-treated chicken. The price of membership would also likely be adherence to other rules and standards different to those already applying in the UK, adding more cost for UK businesses,
Brexit cost
Who the UK does deals with is important to Ireland, as Irish exporters could face new competition in the UK market. But it does not look like US companies will be getting more favourable access to the UK market any time soon.
The affair underlines the economic cost of Brexit, which has hit trade between Britain and the EU. Any new trade deals will be with countries further away than the UK’s neighbours and thus will not replace the losses in closer European markets.
The Northern Ireland protocol – and Biden's demand that the UK adheres to it – is another difficulty for Johnson in negotiating with Washington. The US refusal to negotiate a quick trade deal with the UK does underline that one quick solution to a lot of the protocol's problems – the UK adhering to EU food and plant safety rules, sharply cutting the level of checks needed on goods entering Northern Ireland – could be implemented. After all, if there is no US deal on the table, what has the UK got to lose?
But this argument could be turned on its head, too. If Johnson accepts that Biden will not do a deal, he may feel there is less pressure to adhere to the protocol agreement in the debates to come in the weeks ahead.
