There seems to be little doubt at this point that, in a formal sense, by the end of this month the UK will have left the European Union. “Little doubt” is not meaningless boilerplate. When it comes to big, contentious things like Brexit, no prognosis is foolproof. The facts must await their unfolding. But they are unfolding. Earlier today in London, Prime Minister
Boris Johnson
met with
Ursula von der
Leyen,
the new President of the European Commission. The meeting has been characterized as “positive.” We don’t doubt that, but it is also safe to assume that both leaders set out their different objectives for the difficult negotiations ahead. Mr. Johnson, for example, reportedly “was clear that the UK would not extend the Implementation Period beyond 31 December 2020.” Of course, he could change his mind, but if that position holds, both parties will be under great pressure to wrap up a trade deal this year.
A new UK-EU trade agreement is something everyone will be talking about for months to come, these pages included. For today, however, we shall put that set of issues aside and ask only, how would a U.S.-UK negotiation figure into the mix? Of course we don’t know. No one does. It is, however, possible to take note of the two major elements of any such deal: tariffs and regulations.
Where tariffs are concerned, one can imagine positive effects all around. Tariff reductions between the U.S. and the UK should discourage the EU from using the threat of tariffs against the UK in their negotiations and might even pave the way for further liberalization between the U.S. and the EU.
The regulatory issues are more complicated and more difficult. Logically, the U.S. might wish to see the UK pull away from aspects of EU regulation that are burdensome to America. Geographical indication, certain food processing regulations, and digital tax policies come to mind. But the UK will be walking a tightrope in these areas and may not wish to risk its balance by tilting to the United States. Whatever America’s demands may be, however, having an agreement with a UK that has successfully reasserted its independence vis-à-vis its laws and regulations should be enough.
The UK may well succeed in reaching meaningful agreements this year with the European Union, with the United States or both. If it does, those agreements won’t be the last word. They will be stepping-stones for the negotiations of 2021 and later.
