An unlikely alliance, Theresa May is expected to meet the newly appointed US President later this week to talk trade, but what does this mean for post-Brexit Britain? Some have suggested that positive talks may lead to a solid trade deal that could replace existing EU membership, whilst others view it as a trojan horse for TTIP.
Can a US trade deal replace EU membership like for like?
The UK’s status as the financial hub of Europe is already at stake, with some banks preparing a move ahead of May’s Article 50 deadline, a trade deal with the US will not help the UK unless it can re-negotiate terms with existing EU member states. Without access to the single market, there is a strong argument that the clearing of Euros will have to be moved into central Europe. Simply put, the UK stands to lose a huge portion of its GDP unless a deal can be struck for its financial markets.
Furthermore, the UK is unable to negotiate trade deals with another nation until it officially leaves the EU in 2019 – assuming Theresa May invokes Article 50 in March this year. Any trade talks with the newly appointed President will have to remain informal, or the UK could face a legal battle from the ECJ.
But what message does this send to the rest of Europe? Trump has made an array of inappropriate comments towards women, and now Theresa May is getting into bed with a President that, judging by his previous comments, potentially views her as having less importance. From the perspective of Europe, is this a desperate attempt to swing the battle in Britain’s favour?
So what could the President want from the UK? It’s true that Trump’s mother was Scottish, and for that he supposedly has a special place for the UK. He was also hugely in favour of the UK’s decision to leave the EU, as well as an advocate for Margaret Thatcher.
On the surface this appears to be a resurrection between two old allies, but as its been suggested, leaves the NHS in jeopardy.
US corporations have for years attempted to seal healthcare contracts with the UK, and with the NHS facing another crisis any such deal between the UK and US may involve privatisation of some of the NHS services.
I don’t envisage a trade deal with the US replacing that of EU membership, and whilst the markets may view trade talks as a positive move for Sterling, the longer term implications may not be so optimistic.