Yahoo Finance Trump points out a key problem with May's Brexit deal for US-UK trade
Donald Trump is the latest critic to hit out at UK prime minister Theresa May’s trade deal. The president said that while her Brexit withdrawal agreement “sounds like a great deal for the EU,” it could threaten a US-UK trade pact.
“Right now if you look at the deal, [the UK] may not be able to trade with us. And that wouldn’t be a good thing. I don’t think they meant that,” he said to reporters outside the White House.
In response, a UK government spokesperson said that “we have already been laying the groundwork for an ambitious agreement with the US through our joint working groups, which have met five times so far” and that May’s Brexit deal is “very clear” the UK would be able to sign trade deals with countries around the world.
Back in July, May said “there will be no limit to the possibility of us doing trade deals around the rest of the world once we leave the EU.”
While Trump did not elaborate on what his US-UK trade comments following the Brexit deal, there are some limits to how and when a bilateral deal with the two nations can be shaped.
READ MORE: A no-deal Brexit won’t mean that a UK-US trade pact is going to happen anytime soon
Britain is set to leave the European Union on 29 March, 2019. After this date, there will be at least a two year transition period and the possibility that this will be extended for a further two years (subject to unanimous agreement between all remaining 27 member states). The transition period is intended for the UK to prepare and implement new rules and structures without pushing businesses and the economy over a cliff-edge.
During the transition period, the way the UK trades with the US will remain the same. However, the UK will be still beholden to EU rules. This means that Britain will be limited on what can be negotiated in terms of a free trade deal. However, this would have always been the case if Britain was granted a transition period.
When it comes to May’s Brexit deal, there is still a long way to go in terms of a final sign-off. On Sunday, the EU gave the green light to her government’s Brexit agreement and urged members of parliament (MPs) to back the deal.
May has been touring the country and been going on a variety of media outlets to sell the deal to politicians and the public. On Monday, she came under fire from MPs over her Brexit deal in the House of Commons. On 11 December, UK parliament will vote on whether to accept the deal.
If MPs vote down the deal or demand amendments, this could dramatically shape whether the UK is able to forge these bilateral deals with the likes of US, China, and Japan. If the UK ended up keeping a strong trading relationship with the EU, there would be rules on whether Britain could sign its own deals with major trading partners.
READ MORE: Barnier remains available 24/7 for talks even though Brexit deal agreed
