Business Irish

Monday 23 April 2018

UK faces uncertainty in negotiations on global trade

Britain's Prime Minister Theresa May leaves Downing Street. Photo: Reuters
Britain's Prime Minister Theresa May leaves Downing Street. Photo: Reuters

Kylie MacLellan

UK Prime Minister Theresa May wants to make Britain a global leader in trade after Brexit, but former negotiators say the country faces a long slog despite warm words from some world leaders over forging new relationships.

With other countries reluctant to get involved in detailed discussions until Britain's future ties with the European Union are clear, and a lack of negotiators in London ready to begin talks, any firm deals could be years away.

While the government says it can do the groundwork, Britain cannot formally sign trade agreements until it leaves the EU, and European Commission President Jean-Claude Juncker has said EU member states should not even negotiate deals while still part of the bloc. "Nobody with any sense from China, the US, Brazil or wherever is going to engage with the UK other than a friendly drink in the bar until the UK has a regime with the EU," retired British trade negotiator Roderick Abbott told Reuters.

"That gives them the yardstick against which you negotiate," said Abbott, who during his more than 40-year career worked on trade for the British government, the European Commission and the World Trade Organisation (WTO).

May and her team strike an optimistic tone, highlighting nations which have said they are keen to do deals. But behind the scenes, countries are pragmatic.

A senior diplomat from a developed country with which Britain has suggested negotiating a deal said the EU was a more important partner, so any deal with Britain would depend on how it affected his country's trade with the EU.

"They want to talk to us. We're always happy to talk trade. But frankly there isn't much we can seriously talk about in detail, which is really what trade deals are all about, until we know what their relationship will be with the EU," he said, on condition of anonymity due to the sensitivity of the subject.

Japan has expressed concern over uncertainty surrounding Britain's future EU relationship, including its access to the bloc's single market, while US President Barack Obama quashed the prospect of a fast-track deal.

Australia said this week that it would focus on pursuing a free trade agreement with the EU while it waited for Britain to be able to negotiate formally.

According to government figures, Britain's total trade exports for June were worth £24.9bn (€29bn), with the United States its biggest export market in terms of value.

The government has said three million British jobs are linked to trade with the EU, while the EU estimates a further almost four million jobs in Britain are supported by EU exports to the rest of the world.

May has promised to deliver Brexit after 52pc of Britons backed leaving the EU at a June 23 referendum.

But she has also said she will not trigger Article 50, beginning the formal two-year divorce process, this year in order to allow the government time to prepare.

While Article 50 refers to "taking account" of the departing country's future relationship with the EU, many say detailed talks will have to wait until Britain has left, meaning it could be 2019 before substantial trade negotiations begin.

With a British election due in 2020, Theresa May could feel pressure to get deals done, and has said Australia, India, Mexico, Singapore, China and South Korea had all welcomed talks about post-Brexit trade. (Reuters)

Irish Independent

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