Will Trump's America And A Post-Brexit UK Benefit From A Future Free Trade Agreement?

Dec 13, 2017 · Guest post for from Richie Santosdiaz, London-based economic development expert

Screen shot 2017 12 13 at 10.48.29

Guest post for Forbes from Richie Santosdiaz, London-based economic development expert

Since President Trump first took office, his stance of "America First" has been clear in an international context. This is being felt throughout various global negotiations and agreements the United States currently has – from climate change to future free trade agreements. With respect to the ladder, President Trump has emphasized that the interest of American jobs and industry comes first, which include renegotiating the North American Free Trade Agreement (NAFTA) with Canada and Mexico, the free trade agreement with South Korea (KORUS), and delaying or even pulling out from future free trade agreements altogether.

Simultaneously, there has been much talk about the U.K. finding future trading partners in a post-Brexit world. From Canada to Australia to China to India, the list of potential future trading partners post-Brexit, assuming the two-year Brexit negotiation process runs smoothly, seems endless.

One that has surfaced, even before President Trump won the presidential election in November following the Brexit vote in June last year, is the idea of the U.K. and the U.S. creating a free trade agreement together. At the time, even former President Obama weighted in on his views for the U.K. to remain part of the E.U., uttering his famous quote that the U.K. would go "to the back of the queue" if they wanted a free trade agreement with the U.S. should they vote Brexit. This was different from then presidential candidate Trump in 2016, who was very supportive of the U.K.’s Brexit decision and tweeted that the U.K. was "taking their country back" after the Brexit leave campaign won.

After all, the U.K., assuming it will have a hard Brexit and sever all its membership obligations from the E.U., will be very keen to find new trading partners. In fact, many who supported Brexit in the U.K. emphasized the new found freedom to choose who the U.K. will have free trade agreements with. From recent figures and rankings from the World Bank report from this year, the U.S. is the world’s largest economy at $18 trillion USD and the U.K. is the fifth largest economy at $2.9 trillion USD; a free trade agreement between the two will be on everyone’s radar. At present, the one between Canada and the E.U. (commonly known as CETA), which recently was provisionally implemented on September 21, is on the spotlight for many free trade enthusiasts, as well as critics. Whether the U.K. will be part of CETA post-Brexit remains to be seen.

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