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Swings and roundabouts in US trade talks

The UK government has published its position in trade talks with the United States.  At the outset, it makes clear that the NHS is not on the table, nor what the NHS pays for drugs. 


"The NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table. The NHS is not, and never will be, for sale to the private sector, whether overseas or domestic. Any agreement will ensure high standards and protections for consumers and workers, and will not compromise on our high environmental protection, animal welfare and food standards."

This is good news if they stick with those pledges.

The government must resist giving under pressure, and pressure there will be.  The US will want concessions if it is to provide more favourable access to its markets.

It is a market that the UK will increasingly depend upon unless it can strike a good deal with the EU. As with our relationship with the EU, much of the goods imported from the US are used in supply chains vital for British business.  

Thus, the government hopes that reductions in trade barriers will boost those UK industries in this supply chain.

There is no doubt that much could be gained, even if the overall boost to the economy is in the long run relatively small.  The government's own estimate is that it will boost the UK economy by just 0.16%.

This is certainly not a brave new horizon, and many slips could be made in the detail of the negotiations.

What cannot be assumed is that what we may lose from walking away from the EU without a trade deal can easily be compensated by an agreement with the United States.  It is clear from the forecasts in the position statement that this won't be the case even in the best scenario.

The US is the UK's largest trading partner after the EU, accounting for nearly 19% of all exports in 2018 and 11% of imports. The EU accounted for 45% of all exports and 53% of imports.

The government would be foolish to walk away from talks with the EU.  If more time is needed to get the best possible deal with the EU, then that time should be taken.   There is nothing to be gained for the UK economy by trading on WTO terms with the EU.

We can only assume that talk of doing so is merely playing hardball and that sense, in the end, will prevail.



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