Are rumours of US-UK mini-trade deals a sign of things to come?

International trade deals, it seems, may not take years to negotiate after all. The hopeful remarks by the United States trade representative, Robert Lighthizer, suggests that Brexit could mean that America cancels some of the punitive tariffs applied to British exports while Britain was in the EU and then governed by the transition agreement.  

These were brought in during one of the perennial spats between the EU and the US about state aid to their respective aerospace industries, and specifically to Airbus and Boeing, respectively. Both the Europeans and the Americans have been found “guilty” of such prohibited subsidies under World Trade Organisation rules. The US slapped tariffs on EU-sourced cheese, olives and Scotch whisky, while the EU retaliated by taxing imports of sugar, fitness machines and Boeing products. The aircraft dispute was only the latest in a long running low-intensity trade war between America and Europe over strategic industries such as aerospace and steel, and in which politically sensitive targets from swing constituencies or symbolic national targets such as French champagne and American Harley-Davidson motorbikes were the weapons of choice.

However, as an independent member of the WTO, the UK can set its own tariff policies after 31 December, and the international trade secretary, Liz Truss, has already moved unilaterally to lift the extra tariff on US aircraft. While Lighthizer didn’t sound particularly grateful for that in recent interviews, he did offer up the possibility of some other minor changes on both sides before the Trump administration leaves office on 20 January, and just in time for Burns’ Night.  

As with the recent UK trade deals with Singapore and Japan, it would be spun as a success for “global Britain”, though the impact on jobs and GDP will be relatively modest. The most notable beneficiary will be the Scotch whisky trade. Along with what Boris Johnson terms hundreds and thousands of tonnes of fish, shellfish and assorted crustaceans in Scottish waters, the move on Scotch will be presented as a Brexit bonus Christmas gift to Scotland, in contrast to the SNP’s gloomier outlook (though that is derived from official estimates on the wider long-term damage done by Brexit to Scotland’s economy).  

However much anyone might want to raise a glass of single malt to such an outcome, it is all far removed from the kind of comprehensive trading relationship both sides will be seeking in future, with the British the needier partner. The Biden administration will in reality be scarcely less protectionist than its “America First” predecessor, and, despite the sentimental stuff about the bust of Churchill in the Oval Office, and the Trump-Farage bromance, no White House or Congress is likely to compromise vital US farming and pharma interests, for example. President elect Biden’s pick to succeed Lighthizer, Katherine Tai, is as tough as anyone in that department. Put simply, if the British want to sell more Range Rovers and Glenmorangie to the Americans, some British farmers will have to find new ways to make a living, and British consumers will need to develop an appetite for chlorine-washed chicken (which it would be illegal for the shops to label as such under the US trade code). The NHS will not be “sold” to the US, but there may be nothing to stop experienced US companies winning contracts to administer NHS trust hospitals, for example.

A full American economic partnership will in fact be as routinely painful as any other to achieve, and will take years to finalise, with areas such as finance not even within federal control but that of individual states, notably New York. By comparison with what Biden, Katherine Tai, and her team have in store, Brexit will seem in retrospect to have been as pleasurable as a leisurely whisky tasting session with an open fire in some nice wee highlands retreat.