As Trump Pursues Limited Trade Deals, US, UK Companies Pushing for Broad Agreement, Panelists Say

United Kingdom businesses and U.S. agricultural exporters want the two countries to sign a comprehensive trade deal rather than continue the Trump administration's recent string of limited phase one deals, industry representatives said. Some stakeholders feel the two countries should capitalize on negotiating a full agreement before the upcoming U.S. presidential election, which could lead to an anti-Brexit Democratic president and stymie negotiations, the representatives said.

“A narrow or scaled-down agreement with the U.K. would be a huge missed opportunity,” Shawna Morris, vice president of trade policy for the U.S. Dairy Export Council and the National Milk Producers Federation, said during a Jan. 28 panel hosted by the Global Business Dialogue.

The Trump administration recently negotiated limited initial trade deals with both Japan (see 1912050058) and China (see 2001150073). Although U.K. and U.S. traders would welcome any deal that reduces trading barriers after the U.K. officially withdraws from the European Union, panelists underscored that both industries believe a second chance at a comprehensive deal may not come soon.

The U.K.’s goal is to sign a deal before the end of the year, said Nile Gardiner, director of the Heritage Foundation’s Margaret Thatcher Center for Freedom and a former adviser to Thatcher. “It’s an ambitious goal,” Gardiner said, “but I do think it’s a realistic goal.” Gardiner pointed to the similarities between the Boris Johnson administration and the Trump administration, including the fact that Trump openly supports Brexit. “It’s the view of the British government that it’s best to move as quickly as possible with a president who is pro-Brexit,” he said. “I do think the British government will put a great deal of effort into getting this done quickly.” Johnson has said the U.K. and the U.S. can “make a lot of progress quite fast on trade” (see 1909240036).

British companies would much rather their government negotiate a wide-ranging deal, although they also don’t want their government to rush, said John Dickerman, head of the Confederation of British Industry’s Washington office. “We want to be sure that when we do get a deal,” he said, “we’re getting the right deal.” British companies want the “right agreement within the right time frame,” Dickerman said, “as opposed to doing things in a piecemeal way.”

Although Gardiner said a deal this year is possible, he expects it to be narrow despite the industry’s desires for a broad agreement. “I think it will be a streamlined agreement, slimmer in nature,” he said. “The momentum is definitely there.” Gardiner also said a no-deal Brexit is a “very significant possibility” when the transition period ends in December, adding that he has spoken to “several key figures” in the British government who “made it absolutely clear under no circumstances will they extend that transition.”

In the case of a no-deal Brexit, there is a “zero percent” chance that the U.K. would adopt European Union regulations to provide a jolt of certainty after the transition period ends, Gardiner said. “The British government will never adopt wholesale EU regulations in the case of a no-deal Brexit,” he said. “I think the U.K. would go in the opposite direction and ditch every single EU regulation that's possible to [ditch].” Gardiner added that the U.K. may keep some EU regulations that are “market friendly” but try to eliminate the others. “I think it’ll be a case-by-case study of every single EU regulation,” he said. “If it doesn't benefit the United Kingdom, it’s going to be rejected.”

The U.K.’s desire to ditch a majority of EU regulations will address one of the “chief concerns” held by the U.S. dairy industry, Morris said: dealing with constantly changing EU regulations that relate to certification requirements. Morris said dairy exporters have struggled to comply with the “exceeding level of specificity” in EU certifications requirements. “Every time those paperwork issues change, that puts at risk whether we’re going to be able to ship to the market,” Morris said. Dairy exporters also face issues with EU policies surrounding geographical indications, which she said limit U.S. cheese exports that are labeled as parmesan, feta and asiago.

For these reasons, Morris said, U.S. agricultural exporters are prioritizing a trade deal with the U.K. over one with the EU and applaud the U.K.’s desire to dump EU regulations. “Our takes aren’t fundamentally different than the concerns voiced by the U.K.,” she said. “I think we should be very much focused on ... negotiating specifically just with the U.K. versus the much more challenging task of negotiating with all of the other [EU] member states.”