QOTD -- Trade and Brexit

Policy trajectories often shift gently, through minute movements in small technical areas. For example, consider the new bilateral trade treaty between the UK and Uzbekistan, which was just reviewed by the House of Lords European Union Select Committee. Among other things, the UK’s exit from the EU requires the UK to establish direct bilateral trade treaties with third countries. Each of those treaties is reviewed by this Committee.

As the quote below indicates, most of the activity at least with respect to small trading partners is minor. At present, it seems the only significant changes occur with respect to cross-border parliamentary cooperation which the UK government is now consistently eliminating from free trade agreements:

Those concerned about cross-border flows of people and services will be relieved to see that the free flow of both will be protected under the newly minted treaty. The question is whether these commitments will be replicated in larger, more economically significant agreements under negotiation at present (particularly the EU and the US).

Optimists will seek to replicate this kind of "cut and paste" operation from preexisting EU trade treaties into national/bilateral trade treaties. However, the level ambition regarding the two most significant bilateral trade treaty negotiations underway (with the US and the EU, respectively) is higher. Cross-border parliamentary cooperation is not the key issue in the transatlantic trade arena currently.

As The Telegraph reported earlier this week, French policymakers are pressing the European Commission to require the UK to follow EU regulatory policies at least in areas where a high degree of agreement already exists: tax, state aid, environment, and social standards. The tax issues are particularly intriguing since the just-departed Chancellor of the Exchequer Sajid Javid spent much of January staking out policy priorities more consistent with France than the United States regarding digital taxation. In addition, U.S. trade negotiation priorities are likely to focus on sectors more meaningful to the transatlantic economic relationship such as services trade and data flows.


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