Earn2Trade Blog

America’s Offer: The Potential Trade Deal Between the US & UK

Considering the current public sentiment in the United Kingdom, it seems almost inevitable that they’ll separate from the European Union. The question of the EU & UK’s post-Brexit relationship has occupied many headlines. Now with the March 29 deadline just around the corner, the looming possibility of a no-deal Brexit has led many to wonder what alternative options London has outside of Europe. The most enticing one of these potential options is the United States. Its massive domestic market and economy could make up for the loss of trade relations with Europe. The long history of good relations between the two countries, their shared interest in trade openness and a shared languages are all factors that could facilitate them coming closer together.


Last year The Independent published an article covering the USA’s wish list as laid out in a document by the US Trade Representative. These were the de facto requirements Theresa May’s cabinet would need to internalize for a trade agreement between the two countries to happen. Chief among them are the following:


  1. The unrestricted trade of agricultural- and food-products. This includes requiring Britain to allow hormone treated beef and chlorine-washed chicken, both of which are subject to much stricter regulation in the UK. This particular question has already halted negotiations between the US and the EU once before. Although the evidence for the negative environmental and health effects of these products is not conclusive, the European Food Safety Authority has classified them a risk. This is more than enough to lend credence to a headlines that could influence the general population’s sentiment of these products for the worse.
  2. To ensure the free flow of goods and services, Washington would expect the UK to seek their approval before entering into any trade agreements with other countries. Although this appears somewhat unreasonable at first sight, it’s still against the USA’s strategic interest to see their products make their way tariff free to other countries with which they themselves don’t have a trade agreement.
  3. Finally, the free flow of electronically stored personal data kept by British citizens and companies. Currently the strict EU regulations and the recently enacted General Data Protection Regulation expressly forbid such an exchange of information, making it highly unlikely that this demand could be met.


Under these conditions it’s questionable whether the original promise of Brexit proponents holds true: That the United Kingdom would have significantly more freedom when it’s no longer constrained by the EU’s unnecessary regulations. At this point it would appear that the deal offered by the US won’t be significantly better than the original terms they had with Europe.  On top of that, British companies will have to give up their painstakingly established respectable market positions in Europe. Instead they’d have to start over in the US domestic market competing against capital-rich US corporation in an unfamiliar legal environment.


Meanwhile as the UK’s outlook worsens, Theresa May’s still fighting for the parliament to accept her own deal which aims to retain much of the economic cooperation between the country and the rest of Europe. At this point it seems like it’ll be extremely difficult to resolve the situation without losing a great deal of face. According to opinion polls the British public is still open to a second referendum, although that could only happen if the exit date were postponed. In theory this would be the most democratic solution, since the past two years have given voters a great deal of additional information on the full consequences and depth of the separation. Even through investors still hold out hope that the pound will recover, banks and auto-manufacturers are pulling out of Britain one after another. Other effects include the prospect of reinstating a physical border in Ireland, which has caused a significant upset as well as Scotland considering the possibility of making another attempt at independence. In essence, Brexit has shown us that the British economy can at best go along with the flow of the major players of the global economy as well as that European countries may have very little chance to maintain their current living standards outside of the European Union.

Get to know the Trader Career Path

We hope you enjoyed this article.

Put your skills to the test with the Trader Career Path, our funding evaluation designed for traders to prove their skills and build a trading career. Traders who pass the evaluation get a funding offer from a proprietary trading firm and keep 80% of the profit they make from it. Don't miss this opportunity! Contact us to learn more. Take the first step towards your new trading career today