“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” - President Trump, July 2017
There is great political will in both the US and the UK to complete a post-Brexit trade deal. Although formal negotiations can’t legally begin until after March 2019, talks have already begun in the form of a trade and investment dialogue, whose working group first met in July 2017. Preparatory work on a potential US-UK trade deal is also being carried out in both legislatures.
So what should this US-UK trade agreement look like? IFT’s goal is to analyse the economic impact of a truly open deal, one that goes beyond other bilateral deals that merely reduce tariffs on goods and largely ignore services. An ideal US-UK free trade agreement (FTA) would focus on mutual recognition of standards and qualifications for goods and occupations. There is one trade deal in existence today that enshrines mutual recognition to this degree: ANZCERTA between Australia and New Zealand, which has been recognised by the WTO as a model free trade agreement.
An agreement of this kind would be much less complex and quicker to negotiate than the usual deals that include multiple carve-outs for the protection of certain industries. And, unlike the Australia-New Zealand deal, whose benefits have largely been concentrated in those two countries, a deal between the world’s largest and sixth-largest economies would have worldwide impact. In time, like-minded countries would surely want to join. This kind of “coalition of the willing” would have an enormous positive impact on the global trading system.
IFT has teamed up with the Cato Institute’s Trade Policy Unit in order to produce a draft of this “ideal” US-UK FTA. In a unique exercise that will bring together all the major conservative and free market think-tanks on both sides of the Atlantic, this paper will then become the subject of two rounds of shadow trade talks (one in London, one in Washington DC) between delegates from these think-tanks. The paper will be discussed and amended at these negotiations, and the final result will be a blueprint for a free trade agreement worthy of the name. This blueprint will be presented at simultaneous launch events in London and Washington DC.
*Policy Exchange is not involved in this project, contrary to what appeared in previously published IFT material*