One of the most compelling arguments in favor of Brexit was that it would give Britain control over its trade policy for the first time in a generation. No longer part of a protectionist European trade block, Brexit Britain is free to negotiate trade deals with partners around the world, particularly with the United States.
Why does an Anglo-American free trade deal matter so much?
For a start, it would be great news for consumers on either side of the Atlantic. Without European Union tariffs and protective measures designed to keep U.S. goods out of the European market, British consumers would be able to buy products and services that American consumers already take for granted.
The extraordinarily competitive deals that American consumers get helps explain why they enjoy one of the highest living standards in the world. Allowing British consumers to purchase on similar terms, particularly at this juncture of much-needed economic recovery from the global pandemic, would mean a massive, real stimulus for the British economy as well.
It would be great news for America, too. U.S. consumers would be able to buy British goods which their own protectionist policies price out of the American market.
As research by The Heritage Foundation has shown, an Anglo-American trade and investment agreement will be a force generator for greater economic dynamism and prosperity on both sides of the Atlantic.
Done properly, a free trade agreement would have the effect of increasing the size of the market into which American producers could sell by the equivalent of another California. British companies and producers meanwhile would suddenly find that they had improved access to the world’s biggest economy.
The good news is that negotiations toward an Anglo-American free trade agreement have been already underway since 2020. The bad news is that they have been stalled.
Trade negations between Washington and London were formally launched in May 2020 and have proceeded apace through five rounds, most recently late October 2020. However, the Biden administration’s notable unwillingness to expedite U.S-U.K. FTA negotiations, its divergent trade policy priorities, and the soon-to-be-expired (June 30) current Trade Promotion Authority that allows only up-or-down votes on trade deals with no amendments, have all resulted in making the prospects of U.S.-UK FTA enactment improbable in the near term.
With President Biden due to visit the U.K. next month, now is the time for both Washington and London to recommit to fast-tracking a new trans-Atlantic bilateral free trade pact.
Under Boris Johnson, the U.K. has taken the initiative and concluded trade deals with dozens of countries. A free trade deal between Britain and Australia is being finalized. One with New Zealand is expected to follow close behind.
Britain, not normally thought of as a Pacific nation, is on course to be part of the multinational Comprehensive and Progressive Agreement for Trans-Pacific Partnership. If Britain can conclude free trade deals with countries as diverse as Vietnam and Chile, it would be absurd not to do a deal with its largest trade partner, the United States.
The arguments in favor go far beyond economics. Having two of the world’s largest and freest economies agree to a comprehensive free trade deal would set an important precedent—and show Western solidarity and intent.
“But what about American standards?” some in Britain will say.
“And won’t cutting our U.S. tariffs mean Brits taking our jobs?” some on the other side of the Atlantic will add.
Having a trade deal does not mean having to compromise on standards. Allowing foreigners to sell you things more cheaply doesn’t destroy jobs, but ultimately creates more of them. Imports are what elevates living standards.
These are the arguments that those of us who believe in free trade are going to have to make all over again. Imposing tariffs on imports into America was a bad idea in 1773, at the time of the Boston Tea Party. It’s would be an even worse idea to keep those tariffs today when America and Brexit Britain should move toward greater economic freedom through a mutually beneficial free trade treaty that will further advance the special relationship.
This piece originally appeared in The Washington Times