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You can find the current article at its original source at https://www.theguardian.com/politics/2019/aug/06/brexit-clinton-treasury-secretary-larry-summers-dismisses-desperate-uk-hopes-of-us-trade-deal
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| Version 2 | Version 3 |
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| UK too desperate to secure US trade deal, says Clinton's treasury secretary | UK too desperate to secure US trade deal, says Clinton's treasury secretary |
| (3 months later) | |
| The former US treasury secretary Larry Summers has said he does not believe that a “desperate” UK would manage to secure a post-Brexit trade deal with Washington, as Dominic Raab, the new foreign secretary, heads to the US to scope out the potential for such an agreement. | The former US treasury secretary Larry Summers has said he does not believe that a “desperate” UK would manage to secure a post-Brexit trade deal with Washington, as Dominic Raab, the new foreign secretary, heads to the US to scope out the potential for such an agreement. |
| Summers, who was a senior official under Bill Clinton and Barack Obama, said the UK was in a weak position when it came to negotiating with trade partners. | Summers, who was a senior official under Bill Clinton and Barack Obama, said the UK was in a weak position when it came to negotiating with trade partners. |
| He told BBC Radio 4’s Today programme on Tuesday: “Britain has no leverage, Britain is desperate … it needs an agreement very soon. When you have a desperate partner, that’s when you strike the hardest bargain.” | He told BBC Radio 4’s Today programme on Tuesday: “Britain has no leverage, Britain is desperate … it needs an agreement very soon. When you have a desperate partner, that’s when you strike the hardest bargain.” |
| If the UK leaves the EU without a deal it would by default, become a “third country”, with no overarching post-Brexit plan in place and no transition period. The UK would no longer be paying into the EU budget, nor would it hand over the £39bn divorce payment. | |
| The UK would drop out of countless arrangements, pacts and treaties, covering everything from tariffs to the movement of people, foodstuffs, other goods and data, to numerous specific deals on things such as aviation, and policing and security. Without an overall withdrawal agreement each element would need to be agreed. In the immediate aftermath, without a deal the UK would trade with the EU on the default terms of the World Trade Organization (WTO), including tariffs on agricultural goods. | The UK would drop out of countless arrangements, pacts and treaties, covering everything from tariffs to the movement of people, foodstuffs, other goods and data, to numerous specific deals on things such as aviation, and policing and security. Without an overall withdrawal agreement each element would need to be agreed. In the immediate aftermath, without a deal the UK would trade with the EU on the default terms of the World Trade Organization (WTO), including tariffs on agricultural goods. |
| The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports – making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO “most favoured nation” rules it must also offer the same zero tariffs to other countries. | The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports – making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO “most favoured nation” rules it must also offer the same zero tariffs to other countries. |
| WTO rules only cover goods – they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border. | WTO rules only cover goods – they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border. |
| Some no-deal supporters have claimed that the UK can use article XXIV of the General Agreement on Tariffs and Trade (Gatt) to force the EU to accept a period of up to 10 years where there are no tariffs while a free trade agreement is negotiated. However, the UK cannot invoke article XXIV unilaterally – the EU would have to agree to it. In previous cases where the article has been used, the two sides had a deal in place, and it has never been used to replicate something of the scale and complexity of the EU and the UK’s trading relationship. | |
| The director general of the WTO, Roberto Azevêdo, has told Prospect magazine that “in simple factual terms in this scenario, you could expect to see the application of tariffs between the UK and EU where currently there are none”. | The director general of the WTO, Roberto Azevêdo, has told Prospect magazine that “in simple factual terms in this scenario, you could expect to see the application of tariffs between the UK and EU where currently there are none”. |
| Until some agreements are in place, a no-deal scenario will place extra overheads on UK businesses – eg the current government advice is that all drivers, including lorries and commercial vehicles, will require extra documentation to be able to drive in Europeif there is no deal. Those arguing for a “managed” no deal envisage that a range of smaller, sector-by-sector, bilateral agreements could be quickly put into place as mutual self-interest between the UK and EU to avoid introducing or to rapidly remove this kind of bureaucracy. | |
| Martin Belam | Martin Belam |
| Despite warm words from Donald Trump about a trade deal, Summers said: “We have economic conflict with China and, even on top of that, the deterioration of the pound is going to further complicate the negotiating picture. | Despite warm words from Donald Trump about a trade deal, Summers said: “We have economic conflict with China and, even on top of that, the deterioration of the pound is going to further complicate the negotiating picture. |
| “We will see it as giving Britain an artificial comparative advantage and make us think about the need to retaliate against Britain, not to welcome Britain with new trade agreements.” | “We will see it as giving Britain an artificial comparative advantage and make us think about the need to retaliate against Britain, not to welcome Britain with new trade agreements.” |
| Even if the two countries could come to an agreement, Summers said, the UK was in a weak negotiating position. | Even if the two countries could come to an agreement, Summers said, the UK was in a weak negotiating position. |
| “Britain has much less to give than Europe as a whole did, therefore less reason for the United States to make concessions,” he said. “You make more concessions dealing with a wealthy man than you do dealing with a poor man.” | “Britain has much less to give than Europe as a whole did, therefore less reason for the United States to make concessions,” he said. “You make more concessions dealing with a wealthy man than you do dealing with a poor man.” |
| Brexit weekly briefing: election speculation and sliding sterling | Brexit weekly briefing: election speculation and sliding sterling |
| Summers’ remarks came as Raab headed to Canada, the US and Mexico to “fire up” talks about trading relationships. | Summers’ remarks came as Raab headed to Canada, the US and Mexico to “fire up” talks about trading relationships. |
| The foreign secretary said Asian counterparts he met in Thailand last week expressed a “consistent warmth” for the UK and a “desire to work more closely with us”. | The foreign secretary said Asian counterparts he met in Thailand last week expressed a “consistent warmth” for the UK and a “desire to work more closely with us”. |
| The former Tory leader Iain Duncan Smith sought to dispute Summers’ warning, saying: “This is a classic attempt by Larry Summers to use Brexit for domestic point-scoring. | The former Tory leader Iain Duncan Smith sought to dispute Summers’ warning, saying: “This is a classic attempt by Larry Summers to use Brexit for domestic point-scoring. |
| “Forty-five Republican senators have signed a letter to the prime minister pledging to back a trade deal with Britain once we have left the EU. The president (Donald Trump) himself has expressed his enthusiasm for a UK-US deal.” | “Forty-five Republican senators have signed a letter to the prime minister pledging to back a trade deal with Britain once we have left the EU. The president (Donald Trump) himself has expressed his enthusiasm for a UK-US deal.” |
| The US senator Tom Cotton said Britain should be at the “front of the queue” for a trade deal with the US. | The US senator Tom Cotton said Britain should be at the “front of the queue” for a trade deal with the US. |
| “Many of my colleagues in the Congress would say that Great Britain should be in the front of the queue given everything our nations have gone through together,” he told Today. “Obviously it wouldn’t be a matter of days or weeks for such negotiations, it might be months, but I would suspect it would be months not years.” | “Many of my colleagues in the Congress would say that Great Britain should be in the front of the queue given everything our nations have gone through together,” he told Today. “Obviously it wouldn’t be a matter of days or weeks for such negotiations, it might be months, but I would suspect it would be months not years.” |
| The key point of contention in any trade deal is whether the US would be able to sell food or other products with lower environmental, animal welfare and safety standards into the UK. | The key point of contention in any trade deal is whether the US would be able to sell food or other products with lower environmental, animal welfare and safety standards into the UK. |
| There is also the issue of whether big US health corporations would demand easier access to NHS contracts. | There is also the issue of whether big US health corporations would demand easier access to NHS contracts. |
| On a visit to London, Trump said everything, including the NHS, would be on the table in trade talks, although he later walked back on that suggestion. | On a visit to London, Trump said everything, including the NHS, would be on the table in trade talks, although he later walked back on that suggestion. |
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