Johnson sets sights on speedy US and EU trade deals

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Boris Johnson will next month announce plans to conclude fast-track trade deals with the EU and the US, in a speech outlining his vision for post-Brexit Britain.The prime minister will confirm that he wants to run parallel negotiations with Brussels and Washington, setting a big test for a new cohort of UK trade negotiators — many of whom will be involved in such talks for the first time.His allies say the government will publish its objectives for its trade talks with the US in February; Mr Johnson is separately targeting the conclusion of a Canada-style trade agreement with the EU by the end of 2020.Mr Johnson’s aides are billing his speech as the moment Britain turns a page after it formally leaves the EU on January 31. “Brexit won’t be mentioned, apart from to say we are moving on from Brexit,” said one official.London has been under growing pressure from Washington to set out its negotiating position for the potential US-UK trade deal that has been hyped up by many senior Brexiters. The US set out its own position 11 months ago. On Thursday, senior British ministers, including international trade secretary Liz Truss, foreign secretary Dominic Raab and Cabinet Office minister Michael Gove, will meet to work out the strategy for new trade deals — not only with the US but also with Japan, Australia and New Zealand, among others.

A US-Australia deal completed very quickly at Australian request some years ago has been assessed as having a negative impact on their economy

Britain cannot formally negotiate trade deals while it remains a member of the EU but talks can begin after Brexit Day on January 31. Donald Trump, US president, said during a trip to Britain last summer that a substantial trade deal could lead to a “three to four, five times” increase in current trade, although he did not elaborate on how that would be achieved. British officials have given a much less enthusiastic assessment of the potential benefits flowing from a new post-Brexit deal with Washington. Leaked government forecasts have suggested that a US-UK trade deal could benefit economic output by about 0.2 per cent in the long term. By contrast, the forecasts predicted a loss of 5 per cent in potential growth over 15 years if Britain left the EU customs union and single market and struck a Canada-style trade deal. Robert Lighthizer, the US trade representative, who spoke to Ms Truss last week, suggested that an agreement with Britain could be struck by the late summer, ahead of the American presidential election in the autumn. “He suggested he was prepared to move heaven and earth to get something tied up by the summer,” said one official. David Henig, director of the UK Trade Policy Project at the European Centre for International Political Economy, a think-tank, said a deal could be struck in such a short timeframe — but only if Britain expected no special treatment. “The US have a template and have done quick deals before,” he said. “Such a deal may not be beneficial to the UK. A US-Australia deal completed very quickly at Australian request some years ago has been assessed as having a negative impact on their economy.”One former Tory cabinet minister said there was “not remotely” any chance of getting a full trade agreement within six months. “You might be able to get a bit of paper, but something that’s going to need to get through Congress while being acceptable to the British public, I would be hugely surprised,” the person said. “Most sensible people think that this will take longer than an EU trade deal . . . the best you can hope for is a ‘heads of terms’, which is just a piece of paper.”
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Parallel negotiations with both Washington and Brussels will complicate matters enormously given the competing demands of both. “It’s going to be an interesting game of chess,” said one government aide. Britain will repeat many of its longstanding demands such as greater access for food manufacturers and for financial services companies. One initial demand will be for the US to ease off on Britain regarding its retaliatory tariffs imposed on all EU countries over subsidies to Airbus, including whisky and shortbread. Further potential tariffs are also in the pipeline, including blended whisky, salmon and sparkling wine. Washington is meanwhile likely to press for greater access for its goods producers, raising the spectre of “chlorinated chicken” entering the British market, as well as more access for healthcare companies to the National Health Service. Both are seen as red lines by Downing Street. “The prime minister is very good on animal welfare and on protecting the NHS, I don’t think he’ll go there,” said one person close to the talks. Mr Trump said in June that the NHS must “be on the table” during UK-US trade talks, only to later suggest that he had misspoken.

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