Trump's Brexit comments aren't necessarily wrong, but they are unhelpful

US President Donald Trump has kicked up quite a stink here in the UK, after suggesting that Prime Minister T...

Posted: Nov 28, 2018 12:33 PM
Updated: Nov 28, 2018 12:33 PM

US President Donald Trump has kicked up quite a stink here in the UK, after suggesting that Prime Minister Theresa May's Brexit deal might put the brakes on a UK-US trade deal in the brave new world of post-Brexit Britain. He went on to suggest that it was a "great deal for the EU", thus implying it is not such a great deal for the UK.

Many of May's Brexit-loving backbench MPs have already said that they cannot support her deal when it is put to a vote on December 11. Trump's words will have done nothing to calm those in the UK who think that May has given the EU way too much.

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Prior to the referendum, hardline Brexiteers often hailed a trade deal with America as the reward for the UK claiming back its independence: untold riches pouring into UK business as the result of free trade with the world's largest economy.

But as with all things Brexit, there is just one small problem with this: reality.

In order to trade sans tariffs with the US, the UK would have to accept American standards on things like food and other goods, which are seen by the EU as being lesser than the standards within the union. Think US-exported hormone-treated beef and chlorine-washed chicken -- things that the EU doesn't want moving freely through the borders of its member states.

The prize of a trade deal with the US -- and all the benefits that would bring to the UK -- was always talked of in such wistful terms under the assumption that post-Brexit, the EU would practically bend over backwards to offer the UK a free trade deal. As the UK's international trade secretary Liam Fox said, it would be "the easiest trade deal in history".

That very same Liam Fox is these days referred to unkindly by some as the "minister without portfolio," owing to the fact that since the UK is still an EU member state, he is unable to actually negotiate any trade deals until it formally leaves on March 29, 2019.

And even after Brexit day, it is unclear that nations will want to sign up to trade deals with the UK until its future trading arrangements with the EU have been fully agreed.

The assumption that the EU would immediately offer the UK a free trade deal proved to be wrong. For many reasons, ranging from food standards to customs arrangements on the island of Ireland, the EU has stayed largely united. Over the past 28 months, it reinforced the uncomfortable truth about Brexit: the UK can either trade independently with the world, or have frictionless trade with Europe.

The EU is the UK's largest trading partner. Come Brexit day, should all of the current arrangements suddenly not be in place, chaos would ensue -- all across Europe and possibly even further afield.

Therefore, a key aim of any Brexit deal always had to be an immediate standstill in the UK's trading relationship with the EU while both sides sort out what comes next.

Once the transition period -- the 21 months immediately after Brexit day, in which the UK carries on its membership of the EU's Single Market and Customs Union -- is over, it's possible to make the case that trade deals with nations elsewhere could make up the shortfall from the UK's lost trade with Europe.

Better still, if successful, post-Brexit, free-trading Britain could have its cake and eat it -- good deals with the EU, the US, Japan, Canada and who knows who else.

But in 2017, the UK's exports to the EU stood at £274 billion ($349 billion) compared to £112 billion ($142 billion) with the US. And trade deals famously take years to negotiate. It was always fanciful for the UK to believe that in the two years it takes to formally leave the EU, it would be able to agree free trade deals with enough nations to prevent economic mayhem.

So while Donald Trump isn't necessarily wrong to suggest that May's deal might make it difficult for the UK to strike a free trade pact with America in the future, the idea that this makes it a bad deal is a matter of opinion, particularly as nearly half of the UK would prefer to be permanently tied to the EU anyway.

The Withdrawal Agreement was only signed two weeks ago, which would leave the UK with five short months to get its affairs in order after leaving Europe. The US is a notoriously difficult negotiator and the idea that anything could be agreed in such a short window is pure fantasy.

What May's deal does is allow the UK to maintain a critical standstill while carefully working out what happens next.

It might not be exciting, it might not be the fireworks that some Brexiteers want, and it might frustrate those who want to leave the EU yesterday. And Trump's words will add weight to their claims that the deal leaves the UK a "vassal state" at the mercy of the EU.

But we come back to that key word: reality.

Theresa May is not lying when she says she has secured a deal that respects the result of the referendum but prevents the UK becoming a basket case. She now has to sell this reality to the public and to her restless MPs.

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