Since Barack Obama told a reverent press conference six years ago that Britain would be “back of the queue” for a free-trade deal after leaving the European Union, we have had two more Presidents and three more Prime Ministers. Yet, as the latest of the latter, on her way to meet the freshest (ish) of the former, has just told assembled hacks on a flight to New York, a UK/US trade deal remains a distant prospect.
Truss – herself a former International Trade Secretary – told my fellow members of the fourth estate there aren’t “currently any negotiations taking place with the US” and that she didn’t have “an expectation that those are going to start in the short to medium term”. As our new PM will have to face the voters in around two years, that would suggest we aren’t going to see any progress on a deal before the next general or presidential elections.
Naturally, this comes as a disappointment to those latter-day Peelites who saw a tariff-cutting arrangement with our nominal cousins across the water as a natural benefit of Brexit. Indeed, it was the gusto with which Truss threw herself into talking up and signing similar arrangements in her last role but one that helped convince Eurosceptics that this former Remainer was on their side. So, her poo-pooing a deal’s chances so early into her premiership is quite eyebrow-raising.
Or is it? In a sense, Truss is recognising political reality. President Biden may not be good at getting to the Abbey on time, remembering his lines, or sticking to America’s traditional strategic ambiguity over Taiwan. But he has been clear in suggesting he sees little role for new trade deals in America’s economic future. His focus is on boosting wages and protecting jobs for those lower middle-class Americans who flipped from Trump to him in 2020. Union men are his “folks”. This does not make him a natural bedfellow of starry-eyed English free marketeers.
Of course, it is not only the President that matters in these, erm, matters, but Congress. John Bolton, one of Trump’s National Security Advisers, may have said on a visit that the UK would be “first in line” for a trade deal. But that was as much about ‘owning the Libs’ on both sides of the Atlantic (and flattering his hosts) as it was about sketching out policy. Ultimately, ratifying a deal would require Congress to be on side.
Nancy Pelosi, the Speaker of the House of Representatives, has warned Congress would block any deal that seemed to ‘undermine peace’ in Northern Ireland. So as long as Truss plans on tinkering with the protocol through domestic legislation, opposition from the Irish American lobby will remain strong. Don’t expect a Republican majority at the mid-terms to change anything. Trump’s long shadow means the party remains more hostile to free trade than at any time since the 1950s.
Nevertheless, politics on this side of the pond also plays a role in fore-stalling action. As Penny Mordaunt, Trade Minister until two weeks or so ago, pointed out on this website recently, the UK has been making a series of arrangements with individual US states over a period of months to increase investment and free up UK professionals to work in them. Signing a big agreement has taken a back burner whilst these talks have gone on.
Moreover, 180-odd years on from the Corn Laws debacle, Tory MPs still remain torn on cheap food versus protecting agriculture. The spectre of ‘chlorinated chicken’ stalks the land, as MPs from rural constituencies nervously consider every angry letter a farmer might send at the prospect of working harder in the face of steeper competition. Then again, having watched Clarkson’s Farm, I’m more sympathetic to the plight of our sheep-growers and potato-herders than I was as a Wealth of Nations-brandishing teen.
The will for a deal is thus not overtly strong amongst our elected representatives here or in the United States. But it should also be remembered that there has never been that great an enthusiasm for a US trade deal amongst those who actually most matter when delivering Brexit: Leave voters themselves.
Being “free to trade with the whole world” was promoted by Vote Leave as part of their campaign. According to their website, the “EU stops us signing our own trade deals with key allies like Australia or New Zealand, ad” – one would have really hope dthat typo would have been fixed in the last six years – “growing economies like India, China or Brazil.” The United States isn’t mentioned. And this part of their message does not seem to have resonated much with those who trudged to the ballot box on the 23rd June 2016.
In Lord Ashcroft’s super-poll of 12,369 people on the day of the referendum, the top three reasons why those who voted to Leave did so were that decisions about the UK should be taken in the UK, that leaving would give the UK the best chance to regain control over immigration and its own borders, and that remaining in the EU meant we had little or no choice about how the EU expanded its membership or powers. National sovereignty 1, cheaper KFC 0.
That hasn’t stopped free-trade forming a crucial part of the case for Brexit from certain commentators and publications. Our own Daniel Hannan has long been a proponent, whilst think-tanks such as the Institute for Economic Affairs and the Adam Smith Institute on this side of the Atlantic and Cato and the American Enterprise Institute on the other have provided the policy heft.
The Spectator made going “Out and Into the World” the core of their Leave pitch. I have their ‘Brexit butterfly’ cover as a poster, which once drew the ire of a Belgian girlfriend when she awoke to see it at the end of my bed. That aside, all this adds up to a clear divide: much of the Leave-voting commentariat saw Brexit as a route to free trade, but many of those 17.4 million who brought about that political revolution weren’t – and one assumes aren’t – overly fussed.
So when Truss told those journalists that a deal wasn’t a likely prospect in the near future, she wasn’t just rolling the pitch ahead of her Biden bilateral, currying favour with the lobby, or dashing the hopes of a few Eurosceptics who have just catapulted her to power. Instead, she is acknowledging that political bandwidth is limited. Those voters care more in the short-term about the cost of living, whilst diplomats don’t want anything that would further complicate fixing the protocol.
In the longer-term, our best route to increasing trade with the US may well be through joining the Comprehensive and Progressive Agreement for Trans Pacific Partnership (as we look likely to do). Featuring Japan, Canada, Australia and potentially the US, this represents part of that strategic pivot to Asia that the war in Ukraine has only partially reversed.
So, in the fullness of time, we may yet get that deal. As the last former Liberal turned Tory to reach Downing Street said, Americans will always do the right thing, but only after they have tried everything else.