Once enemies, the United States and the United Kingdom have been allies for generations.
Will that alliance improve with stronger trading relations as the United Kingdom leaves the European Union? Or will ancillary issues get in the way?
The United Kingdom is working on etching out trade deals with its allies across the globe. It finalized one with Japan back in October, and the country hopes to finish up a deal with Canada by the end of the year.
Several members of Congress, including Neal, Keating, King, and U.S. Representative Elliot Engel (D-New York) wrote a letter to British Prime Minister Boris Johnson reiterating this requirement back in September.
“As Members of the U.S. House of Representatives, we are deeply invested in the United States’ relationships with countries around the world, and we consider the United Kingdom to be among the United States closest allies and friends,” the letter states, in part. “The special relationship between our democracies has served as a pillar of stability in the West. To that end, we are grateful that the United Kingdom and United States so regularly confront global challenges as close allies — not least the 1998 Good Friday Agreement. As you know, we stand with the millions of Americans who support the achievement of the Good Friday Agreement and feel personally invested in ensuring peace in Northern Ireland.”
Signed in 1998, the Good Friday Agreement ended “The Troubles” and softened relations between the Republic of Ireland and Northern Ireland. In the United States some Democratic politicians and King (a Republican) worry that post-Brexit, a hard border could return between the two governmental entities that divide the island, complete with customs and heightened border security.
Trade experts tell New Boston Post that the politicians’ conditions impede upon the chances of such a deal happening.
“Democratic policymakers and leaders — from President-elect Biden to Speaker Pelosi to House Ways and Means Chairman Richard Neal — have been crystal clear that respecting the Good Friday Agreement is imperative to ensuring their support for a potential free trade agreement between the United States and United Kingdom,” Clark Packard of the R Street Institute told New Boston Post in an email message.
Across the pond, many Brits dislike the provision, as David Henig, the U.K. Director for the European Centre For International Political Economy told New Boston Post.
“The strong commitment of the Neal, Biden, and others to Ireland’s view of the Good Friday Agreement has not been welcome in London, where the UK government has a different view,” Henig wrote in an email message. “At this time the UK government is pressing ahead with plans to pass legislation breaching the Northern Ireland protocol in defiance of Ireland, the EU, and US, perhaps not believing the consequences will be to damage the chances of trade agreements.
“Given these trade deals are important to the UK government, there’s every chance we will at some point see a change of heart, though it may, in any case, be some time before President-elect Biden is ready to finalise new deals,” he added.
Additionally, Henig said a new U.S.-U.K. trade deal would not likely be a significant source of discord between the two countries because they already have a strong trading relationship.
Chris Stafford, a doctoral researcher for the School of Politics and International Relations at the University of Nottingham, told New Boston Post that trade deals are hard enough to negotiate in the first place, and that this added condition will make it more difficult.
Stafford noted that if President Donald Trump had won re-election, he may have had an easier time coming to a deal.
“The UK government have been pursuing a Brexit policy that most believe will be detrimental to the peace process in Northern Ireland, although the government disputes this of course,” Stafford said by email. “However, the government had put a lot of effort into getting on to Trump’s good side and this seemed to work. Trump seemed to have no issues with the UK’s Brexit direction.
“However, a change in administration means a change in the rules of the game,” he added. “Unless the two sides can somehow agree to a trade agreement before Trump leaves office, which is highly unlikely, then Biden’s new ‘terms’ could be quite problematic for any future trade agreement as things stand.”
Among American experts on trade, Daniel Ikenson, the director of the Herbert A. Stiefel Center for Trade Policy Studies at the pro-free trade CATO Institute, sees plenty of impediments that could prevent a deal from happening — not just the Good Friday Agreement.
“Regarding a prospective US-UK trade deal, there are many moving parts, and their movements generally point to a long, obstacle-ridden slog,” Ikenson told New Boston Post in an email message. “The Biden administration is likely to be cooler to the idea than Trump was. Biden and congressional Democrats are probably more pro-Brussels than pro-London — a product of the ongoing culture war. Biden has made clear that he will not pursue trade agreements, at least until after he gets certain domestic revitalization projects underway.
“If Biden does embrace trade liberalization, with respect to the UK he may reassert Obama’s ‘go to the back of the queue’ approach,” he added. “Democrats generally oppose financial services liberalization, which is a priority of the UK government. Other controversial issues in the negotiations include: food safety (sanitary and phytosanitary) issues, geographic indications, regulatory harmonization, intellectual property rules, government, maritime services, Boeing-Airbus fallout, US steel and aluminum tariffs fallout.”
Ikenson also said that trade agreements themselves do not create jobs. Rather, he said that they change the composition of jobs in a country and create more value-added for a country — specifically boosting a country’s Gross Domestic Product — but neither create nor destroy jobs.
Ted Bromund, a senior research fellow at the Margaret Thatcher Center for Freedom of the Heritage Foundation, was more optimistic about a potential deal.
“British leaders don’t need reminders of the importance of the Good Friday Agreement from American politicians,” Bromund told New Boston Post in an email message. “Just last Saturday, British Prime Minister Boris Johnson, speaking personally to the Irish Taoiseach Micheal Martin, ‘reaffirmed the need to prioritize the Good Friday Agreement and avoid a hard border on the island of Ireland’.”
The Daily Expressconfirms what Bromund said about Johnson speaking to Martin.
As for how a trade deal may affect the two countries, Bromund wrote, “British firms already employ over 1.25 million Americans. A U.S.-U.K. free trade deal will build on that partnership by promoting U.S. exports into the world’s fifth-largest economy while giving U.S. consumers cheaper access to high-quality British goods.”
Robert Scott, senior economist and director of trade and manufacturing policy research for the left-leaning Economic Policy Institute, spoke to New Boston Post by telephone about the matter. EPI tends to be more skeptical of free trade agreements.
Scott noted that Biden has pledged not to enter new trade agreements before investing in American manufacturing. Scott also said he has encouraged Biden to not negotiate any new trade deals until the United States is in a position to balance its massive trade deficit.
“If Johnson gives in to his right-wing flank and conducts a hard Brexit, as he has threatened to do, that would violate many of the concerns expressed by Biden, Pelosi, and others,” Scott said. “I don’t think they’d want to have a trade agreement with a shrinking United Kingdom that had a tariff border with the Republic of Ireland. I think that would be quite likely to cause hostilities.
“I am not optimistic about it,” he added. “I’m in the camp where for three decades we’ve been promoting trade that has been bad for workers. We’ve been exporting factories and manufacturing jobs and receiving job loss. We’ve lost five million manufacturing jobs and 91,000 factories by 2018 alone and this year, we’ve lost 600,000 to 700,000 manufacturing jobs. These trade deals have been a disaster and Trump has done nothing to fix it. I don’t think Brexit will fix the problem for Britain, either.”
Scott said he supports lowering the value of the U.S. dollar to help rebalance trade. That would increase purchasing power for foreign countries importing goods from the United States and make American goods cheaper for consumers in those countries, but raise the cost of importing goods for American consumers by weakening their dollars’ purchasing power.
Scott noted that if a trade deal does take place, he wants it to address labor rights and the environment rather than enriching multinational corporations.
The offices for Keating, Neal, Pelosi, King, Engel, Boris Johnson, and the Biden transition team could not be reached for comment last week.
