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Prospects of UK US free trade agreement very low says Business Secretary

Prospects of UK-US free trade agreement ‘very low’, says Business Secretary

The chances of the UK securing a free trade agreement (FTA) with the United States are “very low”, according to the Business Secretary.

Kemi Badenoch said the change of administration from Donald Trump to Joe Biden following the 2020 US election is the reason why the UK has not made progress on such a deal.

Conservative MPs have described an FTA with the US as the “greatest prize of all” and the ability to strike new trade deals, particularly with the US, was a key promise of the Brexit campaign.

Ms Badenoch, asked on Sky’s Sophy Ridge On Sunday programme to rate the UK’s chances of an FTA with the US, replied: “The US is not carrying out any free trade agreements with any countries, so I would say very low.

“It all depends on the administration that’s there – different presidents have different priorities. Lots of countries have been looking to have a free trade agreement with the US, including us, but for now they’ve said that’s not something they want to do and we need to respect that.

“Instead we’re having other types of trading interactions and trading deals with them.”

Ms Badenoch also told BBC One’s Sunday With Laura Kuenssberg: “We can’t force other countries to do things that are different from what they want to do; they are a sovereign country just as we are.”

Her comments came as she welcomed the “momentous” move to sign-off UK membership to a major Indo-Pacific trade bloc, taking British businesses a step closer to being able to sell to a market of 500 million people with fewer barriers.

Ms Badenoch signed the accession protocol to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand on Sunday.

Britain is the first new member and first European nation to join the bloc – comprising Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – since its formation in 2018.

It represents Britain’s biggest trade deal since leaving the EU, cutting tariffs for UK exporters to a group of nations which – with UK accession – will have a combined gross domestic product (GDP) of £12 trillion, accounting for 15% of global GDP, according to officials.

The signing is the formal confirmation of the agreement for the UK’s membership, which was reached in March after two years of negotiations.

Britain and the other 11 CPTPP members will now begin work to ratify the deal, which in the UK will involve parliamentary scrutiny and legislation to bring it into force.

Officials estimate it will come into force in the second half of 2024, at which point the UK becomes a voting member of the bloc and businesses can benefit from it.

Asked whether China should be allowed to join CPTPP, Ms Badenoch told the BBC: “What the bloc is doing is making sure that it’s the countries that meet the high standards of the CPTPP that will be allowed to join, so that’s something that needs to be assessed.”

She added: “One of the things that’s really important is that we’ve just joined today. When you join a club, the very first thing you don’t do is tell other club members who should be or shouldn’t be allowed to join.

“It’s how we’re going to make use of it that’s going to be significant and, yes, being the first at the table means we will have an influence, but I’m not going to go into any specific country’s merits – that’s for all of us to do as a consensus team.”

When told earlier it is estimated the new deal will only increase UK GDP by 0.08%, Ms Badenoch replied: “The assessment we made was a scoping assessment, it’s just a very broad brush sort of static modelling, it doesn’t look at so many things. It’s not specifically about trade deals – we use it for all sorts of things. It doesn’t look at the future growth that’s coming in, and it also doesn’t look at how we utilise the agreement.

“That’s why it’s so important that I explain to people how significant it is. If we don’t use it then it’ll become a self-fulfilling prophecy – this is a forecast that is only as good as the way that we utilise it.

“One of the things that we need to remember is that there are 11 countries in there who are making up about 500 million people.

“That’s so, so much potential, that’s where the middle-class is coming from.

“You look at the countries that are queuing up – the US was going to join until they had a change of administration. They’re not doing free trade agreements any more, but we are, this is global Britain, the world is our oyster, we’re not isolated, we’re not insular.”

While Britain already has trade agreements with the CPTPP members apart from Malaysia and Brunei, officials said it will deepen existing arrangements, with 99% of current UK goods exports to the bloc eligible for zero tariffs.

TUC general secretary Paul Nowak said: “This Pacific trade pact is bad for workers at home and abroad.

“Once again, Conservative ministers have turned a blind eye to egregious human and workers’ rights abuses in their pursuit of trade deals.”

Published: by Radio NewsHub

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