Questions for Trump on 'good deal' with UK
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One of Trump’s relatively few consistent positions is his opposition to free trade. On his first full day in office, Trump signed executive orders abandoning the Trans-Pacific Partnership (TPP) and renegotiating the North American Free Trade Agreement (NAFTA).  

The moves were expected given a campaign in which he called NAFTA the “worst trade deal in history” and said that TPP was a “disaster” for U.S. workers.

Less predictable is his willingness to strike new deals. Trump now seems eager to pursue a bilateral trade deal with the United Kingdom. In a recent interview, Trump said he make a solidifying U.S. trade relationships with the U.K. a top priority.

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His statements raise a number of questions. What will a deal mean for the U.S. economy? What will it mean for U.S. relations with Europe more broadly?

Trump’s willingness to bargain with the U.K. must come as a surprise to voters drawn to his populist, anti-globalization rhetoric. He spent much of his campaign arguing that trade agreements lead to the deterioration of American manufacturing.

On this issue, NAFTA faced the brunt of the blame. Trump seized on the fact that, as the AFL-CIO reports, over 400,000 manufacturing jobs have been outsourced to Mexico.

It’s no coincidence that Trump’s campaign message resonated in parts of the U.S. where wages have remained stagnant and job security has declined since the Great Recession.

Now Trump seems to think the U.S. can benefit from the kinds of deals he criticized so heavily. In terms of jobs, he might be right. A deal with the U.K. won’t be another NAFTA. The U.S. and U.K. economies have broadly similar labor costs and skill levels.

This reduces the risk of significant job relocation. Moreover, the U.K. is the United States' seventh-largest export market. Working to further reduce the barriers to trade between these countries will help secure valuable market access for American enterprises.

This means a possible expansion of export-oriented jobs in leading sectors, such as transportation, electronics, and pharmaceuticals. But the economic impact is only part of the story.

In the U.K., a trade deal could be a significant political victory for a Tory government that promised it could go it alone on trade. Prime Minister Theresa May’s government has already begun discussions with New Zealand for a bilateral deal.

Now Downing Street welcomes another opportunity in the form of the Trump administration. It’s no surprise that Boris Johnson was quick to say that Trump’s announcement was “good news.”

Others are less enthusiastic. The pending meeting between Trump and May has met with a mixed reception elsewhere in Europe. The U.S. was already engaged in negotiations of the Transatlantic Trade and Investment Partnership (T-TIP) , a large-scale agreement with the EU.

However, the Brexit vote put that deal on the back burner. Now some EU members are concerned that U.K. success may set a dangerous precedent for other countries. 

Of course, there is no indication yet as to what a U.S.-U.K. trade agreement might include. Trump only stated that any deal has to be “good for both sides.”

Striking a “good deal” will likely mean an agreement with very few surprises. Trade policies across the two countries are already harmonized to a significant degree.

America’s existing agreements share many of the same core elements as the U.K.’s. As a result, the fundamental rules and regulations that help govern trade are already in place.

Thus, in spite of Trump’s criticisms, any new agreement is going to look remarkably similar to America’s current deals. This doesn’t mean negotiations will be easy.

Trump has repeatedly made it clear that he thinks American can write its own ticket. However, his approach to diplomacy has already agitated key U.S. trade partners.

His war of words with German Chancellor Angela Merkel evoked sharp responses from other European leaders. In addition, Chinese President Xi Jingping cautioned  against a trade war last week at the World Economic Forum.

Trump needs to recognize that his strategy is counterproductive. Severing U.S. trade ties and alienating key allies is not an effective way to promote America’s economic interests abroad.

On the upside, Trump’s willingness to strike a deal with the U.K. might be modest compensation from a leader who previously likened trade deals to assault.

 

Jeffrey Kucik is an assistant professor in the Colin Powell School at the City College of New York. He holds a PhD in political science from Emory University and was previously a research fellow at the Niehaus Center for Globalization and Governance at Princeton University.


 

The views of contributors are their own and not the views of The Hill.