On Tuesday, the Office of the U.S. Trade Representative officially announced that the Trump administration is preparing to start post-Brexit talks with the United Kingdom about a free-trade deal between the two nations.
This is a very welcome development. In fact, a new U.S.-U.K. trade deal might be the best economic news of Trump’s presidency so far, exceeding both tax reform and the new North American trade agreement in its potential impact.
As long as protectionist special interests are not allowed to get their claws into it, a U.S.-U.K. agreement could change the game for Americans and Britons alike.
In spite of Britainâs longstanding lack of control over her trade policy â something Brexit is about to fix â the U.S. and U.K. are already each the single largest investor in the other. Both share the same common law and (as the joke goes) are separated by a common language. And now that Britain will no longer be subjected to EU protectionism, the two countries can begin trading with one another on a scale that suits the already-close relationship that they enjoy.
As the Washington Examinerâs British commentator Dan Hannan has put it, the best kind of deal will be âbased on mutual product recognition rather than on common standards. It means that if a drug is approved by the FDA, itâs good enough for us. It means that if you can practice in London in the city, you can practice on Wall Street, and vice versa.â Given that many of our commercial standards are already nearly identical, this is not an unrealistic ideal. If they keep an open mind, negotiators could strike a tremendously beneficial trade deal between the worldâs largest and fifth-largest economies.
The U.K. is a well-developed First World country with an advanced service economy that has been catering heavily to Europe until now. It is also a geographically small island country, which must import agricultural products and natural resources from its trading partners. Again, until now, that has mostly been Europe.
At the moment, despite the fact that Britain is one of Europeâs best, the European Union is rudely trying to make an example of the British by forcing them into the worst Brexit deal possible â or even no deal at all. But if Trump is smart, he can make sure that any loss by Europe becomes Americaâs gain.
American consumers and businesses can fill the void that Europe will leave behind, providing their British cousins with the goods they seek to buy and with the service customers to whom they seek to sell.
If possible, the U.S. should even offer Britain a favorable interim deal to take effect on the same day Brexit becomes official. Rather than be poisoned by the vinegar of European Union arrogance and unilateralism, the British should be welcomed with American honey.
If Trump can pull this off, he will at least partially vindicate his longstanding claim that he supports free trade, just not “bad” deals.
