How Will Brexit Impact Future Trade Deals Between The UK And The US?

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In April, Nancy Pelosi, a Democratic who is Speaker of the House of Representatives, stated that if an eventual Brexit deal meant the rebuilding of a hard border between Ireland and Northern Ireland, there could not be a trade deal made between the US and the UK. The soft border is one of the results of the Good Friday Agreement, a monumental development established in 1998. It brought an end to the Troubles, which were decades of death and violence as Republicans and Unionists fought over the status of Northern Ireland. Pelosi’s assertion has drawn reaction on both sides of the Atlantic, with UK politicians in particular worried about how Brexit could be detrimental to the hope of much-needed trade deals, asking themselves should we leave Europe with nowhere else to turn. So, how could Brexit impact on trading between the UK and the US?

Trade deals have become a central issue in the controversy surrounding Brexit. Hard Brexiters argue that losing our European member state rights to trade both with other EU countries and with countries that share trade deals with the EU, won’t have a major impact on the economy. Instead, they say, we can pursue trade deals with other countries, most significantly the US. Meanwhile, Remainers say the opposite; a lack of trade deals, or a crashing out of the EU, will leave us stranded when it comes to exchanging goods and services with other countries. In turn, this will dramatically weaken the economy and leave the population materially worse off.

Those who support a hard Brexit, where immigration is limited and there are no trade deals in place, believe the UK can plug the gap with new deals, forged with China, India, and most significantly, the US. This is why Pelosi’s statement is so important – if we can’t rely on America for trade, where will Britain trade?

The Good Friday Agreement, which has brought peace to a desperately fractured Ireland over the last two decades, has found itself the focus of unwanted attention as the Brexit negotiations have unfolded. An open border between Ireland and Northern Ireland is a key component of the Agreement. A hard Brexit, which would threaten to undermine the Agreement is unacceptable not just to the US’s Democratic party, but to the Irish and Northern Irish people themselves.

Aside from this controversy, the very notion of trading with the US, and Trump, at all has been far from uncontentious. One issue that has received a lot of attention is the lower food quality standards. While EU countries must adhere to strict regulations concerning food standards, the US allows chlorinated chicken and hormone-fed beef products into its markets. And, agriculture isn’t the only area where problems could arise. In manufacturing, British businesses may struggle to strike a balance between meeting new US trade regulations and maintaining a reasonable profit margin. Additionally, simply striking trade deals with such a large and powerful country comes with its own very real challenges. Many people believe that, following Brexit, the UK will find itself in a very weak bargaining position. The sheer difference in size between the US and the UK is another issue – without the back up of 27 EU member states, the UK is small fry to its cousins over the Atlantic.

Right now, with the UK still caught in an impasse when it comes to Brexit, it’s impossible to say how things will turn out for British businesses or for the economy more widely.