It has perhaps been the most contentious presidential election in recent memory. The multi-millionaire businessman who was once famous for the American version of The Apprentice is now the 45th President of the United States.
Trump has already made some brief overtures towards Britain regarding getting a trade deal going. While some doubt his protectionist policies are going to benefit the UK, others have seen it as a positive move and the chance to look forward to a more profitable post-Brexit world.
We already trade with the US a lot. Thousands of companies either have subsidiaries in different states or send products and services over the Atlantic. A new trade deal is going to be good for those businesses that want to forge new paths and this could be an exciting time for the UK. But there are some big hurdles to overcome in the near term.
The Aftermath of Brexit
The biggest change in the UK came last June when we voted to leave the EU. It sent shock waves around the world and left people on both sides of the argument uncertain of what lay ahead. A few months on and we are still no clearer how this is all going to look. Article 50 is yet to be triggered and our big step into the unknown has got many worried. The business community is doing its best to prepare but they need the answer to vital questions, particularly what happens following Brexit and where we’ll be able to do business.
Trade with the USA
As part of the EU, we can’t form a new partnership with the US outside of this until we have formally left. We can gain an insight about what any potential trade deal will be from the Transatlantic Trade and Investment Partnership (TTIP) that has got many people in Europe worried over the last few years. Included in the agreement were stipulations perceived as an attempt by multi-national companies to determine legislation in countries that signed up to the deal. In the UK, we have higher standards when it comes to consumer protection and employee rights than in the US and this was a huge sticking point.
There’s also a general rule in commerce and trade deals that the bigger country will always get disproportionately more out of any arrangement than the smaller one. Though we punch above our weight in the global market place, many businesses will be rightly worried that the US will have a distinct commercial advantage over the UK compared to when we were part of the EU.
Trump and the Environment
When President Trump made his initial comments about opening free trade with the UK, he also said that they could send over their gas and oil at a cheaper price. While this was an off the cuff remark, if US energy companies do get free, unfettered access to the UK market it could have a serious impact on the renewables industry here. Trump, as we know, is no fan of climate change and is likely to withdraw from the Paris accord and shelve Obama’s Clean Energy Plan.
Health and Drugs
Another area that could be impacted is health care. The UK might lose out because it won’t have the backing of the EU which could temper any such arrangement. The big worry is that the pharmaceutical giants may well impact the current regulatory framework and even extend the licensing period for particular drugs. Healthcare in the UK is a huge industry and there are many businesses involved with it that may be affected in some way. Many politicians are already concerned about how a trade deal with the US will impact the NHS.
Food and Farming
We have higher standards and more rules when it comes to food production in the UK and this could not only impact on farming but the health of the country. According to The Guardian recently:
“Controversial US practices such as washing raw chicken in chlorine would appal many British shoppers. That is to say nothing about the future of small-scale British farming if it has to compete head-on with the vast prairies of the US Midwest.”
Is it all bad news for UK businesses?
Certainly not. There are plenty of opportunities for businesses of all types to expand abroad and find productive and profitable new markets in the USA and we have a lot to offer. The devil is going to be in the detail. We need to get a strong agreement that protects our side of the deal, maintains our standards and gives us some degree of control. That is not going to happen as quickly as perhaps President Trump thinks or wants.
The Brexit Effect
There is one big hurdle in the way, of course. Before we can arrange a trade deal with the US, we need to get Brexit out of the way. Article 50 is due to be triggered in March and from then it’s expected that negotiations for exit will take about two years. There are those who fear things could drag on longer than expected, particularly in light of the recent Supreme Court ruling that triggering has to be agreed by Parliament.
Whatever deal that could be on the table now with the US, may have changed radically by the time we are in a position to take advantage of it. That is certainly concerning for businesses across the UK. The trouble is nothing can yet be done about it. For the moment, we can only watch the Trump presidency grow and hope that the Brexit negotiations run smoothly. Only then will we be able to begin.