The UK Government’s proclamations of what it hopes to achieve through a big new trade deal with the US were nothing if not ebullient, and, it should almost go without saying by now, were also full of soundbites (and clichés).
Prime Minister Boris Johnson has talked this week about how he will “drive a hard bargain” in arriving at a deal through which he sees the UK “trading Scottish smoked salmon for Stetson hats”.
This type of populist messaging is lamentable. It is not of course the obvious point that any post-Brexit US trade deal is unlikely to lead to an outbreak of Stetson hat-wearing in Ardrossan, Inverness Melrose, Falkirk, Lochgilphead or anywhere else in Scotland or the UK as a whole for that matter that makes the statement demoralising.
Rather, it is the whole tone of the US trade deal narrative.
“Trading Scottish smoked salmon for Stetson hats, we will deliver lower prices and more choice for our shoppers,” Mr Johnson declared. This seems like a pretty meaningless statement. After all, it would seem reasonable to conclude that Mr Johnson does not actually envisage some kind of post-Brexit spate of importing of Stetson hats which is going to somehow deliver cheaper prices and greater choice for consumers. And a US trade deal is presumably not aimed at delivering more options on headwear.
Putting this ridiculousness to one side, the crux is that there seems to be much less enthusiasm for the far more important trade deal which the UK has to conclude with the European Union within less than 10 months than for the desired US pact. The language and general mood music is so different, with the Conservative Government at times appearing to be pandering to the US, “hard bargain” talk or not, while being openly hostile to the EU.
There remains much doubt over whether the UK can achieve the comprehensive trade deal it is seeking with the EU before the transition period runs out at the end of the year. Negotiating stances are one thing but the degree of open hostility between the UK and EU ahead of this week’s re-start of talks over Brexit has seemed to signal a deep problem.
READ MORE: Ian McConnell: Toys out of the pram mood on Brexit looks most inauspicious ahead of UK-EU talks
If the Conservative Government can seal a trade deal with the US which is beneficial to the UK economy and society, and does not put the National Health Service up for grabs or see a decline in food standards by so doing, that is all well and good. But this is likely to be a very protracted process. President Donald Trump has, to put it mildly, appeared most fickle on the substance of a future UK-US trade agreement, and we have not even got to the negotiations yet. What the US might want has potential to put a spanner in the works of a future UK-EU trade deal, with the likes of chlorinated chicken already towards the forefront of the UK public’s thoughts as an agreement with America has been talked about.
Mr Johnson’s Government must put political spin and ideology to one side and focus on limiting the damage from Brexit by sealing an EU trade deal. That is not to say that a US deal should not be pursued in parallel. However, it all looks a bit pie in the sky at the moment, with talk from the Conservative Government of a major boost to the economy and claims that Scotland, Wales, the north-east of England and the Midlands will benefit particularly.
Undoubtedly, the fact that a future deal with the EU is far more important to the economy and living standards in the UK than a US agreement should dictate priorities. The Conservative Government notes in its own paper on its sought-after trade deal with the US that such an agreement could, in the longer term, boost UK gross domestic product by around 0.07 per cent or 0.16% under two different scenarios. These quite small percentages might surprise some people, given the amount of talk from Conservative ministers over these last few years about the wondrous things that could flow from a UK-US trade deal.
These small projected gains (which of course depend on a trade deal being concluded) would pale into utter insignificance relative to the dampening impact on future UK economic output from the planned Tory clampdown on immigration from EU countries and the fall-out from the loss of frictionless trade. You only need to look at the Conservative Government’s own forecasts, under former prime minister Theresa May, to see that.
These forecasts, published in November 2018, show, even if there is no change to migration arrangements, UK GDP in 15 years’ time under a no-deal scenario would be 7.7% lower than if we stayed in the EU.
We now know the Conservatives plan to clamp down on immigration dramatically.
On the basis that there is zero net inflow of workers to the UK from European Economic Area countries, the forecasts from Mrs May’s government have it that GDP in 15 years’ time would in a no- deal exit be around 9.3% lower than in a scenario in which the UK remained in the EU. If the UK were to conclude an average free trade agreement with the EU, the hit to GDP would be 6.7% on the scenario of zero net inflow of EEA workers, according to the forecasts.
The UK Government should reflect on these figures and think about what is most important, putting aside ideology.
Sadly, this might be difficult for the Conservative Government, which has shown itself to be a big fan of glib phrases such as “unleashing Britain’s potential”. We are living in a country in which there appears to be a great clamour, whipped up by Tory Brexiters and others, to loosen ties with our European neighbours just so Blighty can try to show how big it can be on the global stage.
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