A ‘phase one’ UK-US trade deal is possible

Subject

UK-US trade talks.

Significance

The first round of virtual UK-US free trade negotiations began on Tuesday May 5 and conclude today. While a free trade agreement (FTA) with the United States is a stated priority for the UK government, it will be difficult to conclude a comprehensive deal this year, in particular due to divisions over agrifood and medicine, while there is also not enough time. However, the chances of the United Kingdom and United States agreeing a deal narrower in scope than a fully-fledged FTA are higher.

Impacts

• The main obstacles in reaching an FTA will be regulatory ones.
• It will be almost impossible for London to address regulatory obstacles with the United States without increasing them in trade with the EU.
• Washington knows an FTA is politically important for the Conservative government, giving it leverage to shape a favourable deal.