January 20, 2017

United Kingdom Will Gain With Trade Deal Under Trump Administration

Holland & Knight Alert
Robert A. Ricketts

It is not only in the United States that people are taking an interest in a Trump presidency. The rest of the world also eagerly awaits how the new Trump Administration will affect them. This is particularly the case in the United Kingdom, where the government is planning for a future outside the European Union (EU), following the "Brexit" vote on June 23, 2016.

Trade is one area in particular new President Donald Trump could play a vital role in the future of Britain's relations with the European Union. Since the United Kingdom joined the European Union in 1973, trade and trade negotiations were handled in Brussels as part of an EU-wide remit. This arrangement ends when Britain leaves the EU and is one of the main areas of discussion in the U.K. In question is whether Britain will retain some of the free trade benefits of the European Union (i.e., "soft" Brexit) or will cut ties from Europe completely and have to negotiate trade deals on its own (i.e., "hard" Brexit). During the EU vote, President Obama, in a controversial intervention into British politics, said that Britain would be at the "back of the queue" for a trade deal with the United States.

Throughout the election, Trump made clear his dislike for the North America Free Trade Agreement (NAFTA). There is talk in the British media of the possibility that Trump will withdraw the U.S. from NAFTA and revert to a bilateral deal between the U.S. and Canada. At the same time, Trump may offer a U.K. trade agreement either as part of these new negotiations or look for trading partners elsewhere.

It also has been reported that U.K. government ministers expect to visit the U.S. early this year for trade talks, the goal being to agree on a "statement of intent" to become a full deal when Britain is able to negotiate on its own (if the "hard" Brexit option is followed). Such an early agreement with the U.S. would strengthen Britain's negotiation position immeasurably with the EU. At the same time, it also may increase Trump's popularity in the U.K.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


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