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The transatlantic trade deal U.S. President Donald Trump is offering U.K. Prime Minister Theresa May will ultimately prove easy to promise and hard to deliver.
That’s the warning of business leaders and trade analysts after Trump told May last week that the post-Brexit accord she hankers after can be lined up "very, very quickly."
The challenge for the U.K. with talks set to begin this month is that America boasts more leverage and negotiating know-how than the U.K. does. That will potentially force May to compromise on areas such as financial regulation and food standards to land the agreement she needs.
“The U.K. must be absolutely desperate to demonstrate that it’s able to get something from the United States,” said Peter Holmes, an economist at the Trade Policy Observatory, a research group. “The U.S. will make demands that even a desperate British government won’t be able to accede to.”
While the U.K. can’t formally sign deals with other countries until it leaves the EU in March 2019, it can prepare the groundwork in the hope of ratifying them soon after. Conversations with the U.S. are set to begin on July 24.
Trade between the U.S. and the U.K amounted to a surplus 37 billion pounds ($47.6 billion) a year as of 2015, according to Britain's statistics office. By contrast, the U.S. Bureau of Economic Analysis calculated a surplus of $11.9 billion in the same year, providing an awkward starting point, with both countries claiming to export more than they import from each other.
The U.S.A. has one of the best negotiating teams in the world in terms of trade deals,” Paul Drechsler, president of the Confederation of British Industry, a lobby group, told Sky News. “We don’t want to walk into a bear hug and I would be wary of trying to be too fast. A trade deal is a dog-eat-dog activity; it’s not a diplomatic activity.”
The U.K. may already have a taste of things to come from the inability of the EU and U.S. to agree a trade deal. Those talks have been on hold since Trump took power in January amid differences over data privacy and the rolling back of financial regulations among other issues. [...]