As the main destination for British exports and second largest for British imports, the United States plays a crucial role in Britain`s foreign trade after Brexit. Trade between the United Kingdom and the United States grew steadily after 2009, albeit unspectacular, with bilateral trade sales exceeding pre-recession levels until 2015. During this period, trade balances in goods fluctuated between deficits and surpluses. However, the United Kingdom has permanent deficits in services-related trade with the United States. Anglo-American trade reached a total of $226.9 billion in 2016, of which 51.6% was for services. While free trade agreements are aimed at boosting trade, too many cheap imports could threaten a country`s producers, which could affect employment. Any existing EU agreement, which will not be rushed, will end on 31 December and future trade will take place on WTO terms until an agreement is reached. These negotiations between the UNITED Kingdom and the United States cannot be separated from those between the EU and the United Kingdom, as the requirements of the United States inevitably conflict with certain EU rules and rules. The result will be a painful compromise for the UK, which will have to choose between closer economic relations with the EU or with the US. This approach has been criticized by some trade experts for distributing too little of the UK`s negotiating capabilities and creating difficulties in coordinating these discussions. The fact that negotiations now have to be conducted remotely makes things even more difficult due to the logistical constraints of video maintenance. Brexit: UK trade “difficult when the Irish border is not resolved” No new trade deal can start before the end of the transition.
We show in our investigations that even if the United Kingdom manages to conclude preferential trade agreements with the United States and Commonwealth countries, the negative effects of Brexit will not be offset. Since the EU is the UK`s largest trading partner, the UK will benefit the most from a comprehensive free trade agreement with the EU. In the short term, the main obstacle to greater cooperation between the United States and the United Kingdom in the area of digital commerce is the decision of the United Kingdom to impose a 2% tax on digital services on technology companies that are disproportionately in the United States. The United States has just announced a formal investigation into Section 301 on this tax, which was found to be discriminatory. Another political challenge that the UK government appears to be adapting is the UK`s reliance on telecommunications to China`s Huawei for its 5G broadband requirements. The United States would certainly seek assurances that Huawei devices will not be included in future digital innovations. In addition to goods, trade in services is also on the agenda. The Uk is keen to improve access to the UK service market in the areas of accounting, architecture and finance, as well as free movement and mutual recognition of professional qualifications. Negotiators from the United Kingdom and the United States have set a broad framework for a comprehensive free trade agreement, but the upcoming U.S.
presidential elections put pressure on the timing to reach a broad agreement (the U.S. Trade Promotion Agency, which allows Congress to accelerate any eventual deal, ends in July 2021). January 2021 could also be a particularly difficult time for the UK if its participation in european supply chains and standards is abruptly halted. But if both sides are able to overcome these obstacles, a free trade agreement between the United States and Britain could redirect the British economy to North American markets, which may justify further steps toward integration into the U.S.-Mexico-Canada agreement.