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Trade with Britain: It's Trump's yuge-est opportunity yet

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A new economic coalition between the U.S. and the United Kingdom could restart a global trading system that has been stalled since the mid-1990s. (iStock)

When President Trump talks of a free trade deal with the United Kingdom, he does so with his trademark superlatives. It’ll be a beautiful deal, he says, a yuge deal. No one – trust me – does trade deals like Donald J. Trump.

And you know what? This time, he might have a point. I spent most of last week on Capitol Hill, and found few issues that united pro- and anti-Trump Republicans like the prospect of a comprehensive trade deal with Britain. One senior administration adviser told me, “He is personally invested in this one, like no other.”

So, what might this big, bold, beautiful deal look like? Well, imagine a trade accord that didn’t just tidy away a few tariffs and duties, but that worked as a mechanism for domestic deregulation.

Suppose, for example, that the U.S.-U.K. deal stipulated that any pharmaceutical product approved by the Food and Drug Administration could automatically be sold in Britain and vice versa. Imagine the impact on the price of drugs once the cartel was broken.

Think of the gains if the same approach were taken to occupational licensing, so that someone qualified to practice as an insurer or an architect or a reflexologist would automatically be able to work in both jurisdictions. There’d be fierce resistance from some of the closed guilds, but who can doubt the general benefit? Sooner or later, the more restrictive rules would be dropped. The barriers to entry would be lowered. The idea that you’d have to train for two years to qualify as a hairdresser in California would become unsustainable.

Yes, California. Why shouldn’t the benefits be felt at state as well as federal level? Heaven knows the Constitution’s commerce clause has been invoked often enough in matters that have little direct connection to commerce, from civil rights to marijuana. At least this time, it would unquestionably be facilitating trade.

Can trade deals really constrain power-hungry regulators? Are there any actual examples of accords that provide for the mutual recognition of professional qualifications? Yes. Australia and New Zealand have perhaps the deepest trade deal on the planet, known as ANZCERTA. It covers services along with pretty much everything else. What goes in one country goes in the other, subject to an objections process that is only rarely invoked. The biggest divergence between the two countries is over the point at which alternative remedies have to start being regulated as medicines.

ANZCERTA has turbocharged Australia and New Zealand, both of which have gone for more than 20 years without a quarter of negative growth. But, given those countries’ size and geographical position, it has made only the tiniest of dents on the rest of the world. Imagine a similar deal between the world’s largest and fifth-largest economies. The impact would be planetary.

Wilbur Ross, the Commerce Secretary, was in London last week, promoting a bilateral deal which he wants to see as soon as possible after Brexit takes effect. Because Brussels controls the trade policy of all European Union countries, Britain can’t begin formal negotiations until it leaves. Mr Ross noted that the EU was "extremely protectionist," and said he was confident that Britain would pursue freer trade as soon as it could.

He has every reason to be confident. A comprehensive U.S.-U.K. deal, based on reciprocity rather than on common regulation, would surely become the basis of a new global trading order. Instead of the corporatism that had crept into the Obama administration’s Atlantic and Pacific negotiations, it would be based on the straightforward principle of mutual recognition. How long before Canada joined? And Norway and Iceland, making a North Atlantic Free Trade Area? They have, after all, been talking about whether to join NAFTA for years. Australia and New Zealand would almost certainly follow, as perhaps would also other free-trading states, such as Singapore, Chile, and Taiwan.

A coalition of the willing, so to speak, would restart a global trading system that has been stalled since the mid-1990s. They would work for the benefit of consumers as well as producers, for start-ups as well as old industries, for services as well as manufacturers. Billions could be added to the world’s economy simply by removing barriers. There is no significant downside to anyone. Donald Trump is spot on: This really could be yuge.

Daniel Hannan, a Washington Examiner columnist, is a British member of the European Parliament.