The UK would be making a “catastrophic error” if it charged into talks on a post-Brexit trade deal with the United States without setting out a ‘comprehensive strategy’ for life after the EU, MPs warned in a new report published on Tuesday (1 May).
The report by the House of Commons International Trade committee stated that “it would be a catastrophic error to rush into negotiations with the US without a comprehensive trade strategy. The economic benefits of a US deal are presently unproven.”
The committee adds that ministers should “publish a trade policy strategy which articulates its vision for how the UK will operate as an independent trading nation.”
“The Government has been extolling the virtues of a potential deal with the US, and this wooing has been met with positive sounds from Washington,” said Committee Chair Angus MacNeil, a Scottish National Party MP.
A deal with the US is central to the Government’s post-Brexit trade strategy, and has been touted as its first priority for new free trade agreements after Brexit.
Intent on leaving the EU’s single market and Customs Union, Theresa May and her ministers view a trade pact with the US as the potential jewel in the crown, especially since Trump has repeatedly voiced his support for the UK’s decision to leave the EU, and stressed that a UK-US pact would be ‘easy’.
However, the proposed Transatlantic Trade and Investment Partnership (TTIP) between the EU and US stalled amid a public backlash against the prospect of hormone treated beef and chlorine-washed chicken being allowed into European markets.
The status of investor State Dispute Settlement (ISDS), the process enshrined in hundreds of free trade accords, which allows firms to take governments to court if they discriminate against them or introduce new laws which threaten their investments also remained unresolved.
After Donald Trump replaced Barack Obama in the White House in January 2017, promising a more protectionist approach to trade policy that would put ‘America First’, the talks with the EU were moth-balled.
A UK-US pact would be likely to face similar hurdles to the EU. The UK would also be under pressure to ensure that its national health service, which offers universal access to healthcare, was outside the scope of any trade deal.
“Universal access to NHS healthcare is an accepted fact of life in the UK and must not be compromised by a UK-US agreement,” the committee warned.
US President Donald Trump’s ongoing trade dispute with the EU, and threatened tariffs on steel and aluminium imports have also cast doubt on the likelihood of a free trade deal.
MPs added that a trade pact with the US could also jeopardise the UK’s trading relations with European countries, and could lead to ‘a clash between regulatory regimes’.
“It was clear in our inquiry that questions about trade with the EU and with the US cannot be answered in isolation. Will the UK align its regulations with the US, and risk erecting impenetrable trade barriers with our other global partners, particularly the EU?” they questioned.
“If there is a clash between the regulatory regimes of the EU and the US, which does the Government plan to prioritise?”