Crucial period for Brexiteers as deadlines dawn

EU-UK trade talks began again on Monday with growing optimism about a deal next month from both sides. Yet, the United Kingdom's wider Brexit trade strategy remains hampered with Japan the only major economy with which an agreement may be imminent.

While Brexiteers play down these problems, it is undeniable that not as much progress has been made as was pledged before and since the 2016 referendum. Take the example of former Trade Secretary Liam Fox who the UK government nominated last month as its candidate to lead the World Trade Organization.

Mr Fox told cheering Conservative members at the party's 2017 Autumn Conference that "we're going to replicate the 40 EU free trade agreements that exist before we leave the EU so we've got no disruption of trade".

Yet, some seven months after the UK finally left the Brussels-based club in January 2020, following delays in the departure, Mr Fox's promise remains unfulfilled. Indeed, as of January 2020, Boris Johnson's government was only able to sign few of the 40 deals Mr Fox faithfully promised for "the second after" EU withdraw.

To be sure, there appear more UK 'successes' on the horizon, including a potentially imminent UK-Japan trade deal. One of the ironies of this agreement, however, is that because of tight timeframes, the emerging deal follows very closely the framework of that which the EU recently negotiated with Japan in order to save time.

Japan aside, other allies of the UK have criticised the lack of progress in talks over post-Brexit trade deals, insisting that the UK government is not "match-fit" for negotiations.

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Those were the words of New Zealand Deputy Prime Minister Winston Peters who said last week that London still is not ready to properly engage in talks with his nation and that he is "very frustrated" and advises "the British to realise that you can do more than one deal at a time".

He warned not just of potentially big risks of over-stretch with the UK government negotiating multiple trade deals at one time. Moreover, he also claimed that London is sometimes lacking the capability to know even what it wants from its negotiations, giving the upper hand to other countries which do.

While the UK has formidable, continuing strengths as a nation, what this situation underlines is how much some Brexiteers were significantly too optimistic. Talk of Britain unlocking a new era of global trade in the 2020s, including swift negotiation of very favourable trade deals with a broad array of countries, have been muted by the reality of the UK's bargaining power in a world shaped by global economic superpowers including the US and China.

COUNTRY-LEVEL CHALLENGES

Washington and Beijing, which boast the world's largest economies, are two good examples of the country-level challenges that the UK faces given that both are key priorities for Mr Johnson's team to secure trade deals with.

On the US front, a 27-strong UK delegation, reportedly lacking in any experts with substantial trade discussion experience, recently negotiated with a 77-strong US team, including at least 20 officials with direct experience of negotiating and enforcing trade deals, in the first US-UK working group meeting. From these discussions, it is clear that both Donald Trump and Mr Johnson see a potential, post-Brexit, US-UK trade deal as the cornerstone of a renewed 'special relationship'.

This could also be a boon for Mr Trump personally given that he is criticised, in many quarters, as being an anti-globalisation, protectionist president.

From the standpoint of Brexiteers too, this would also represent a win in their own battle to show that the nation can potentially swiftly secure trade deals with key non-European partners.

However, as much as both sides may ultimately want a deal, London has abandoned hopes of clinching one ahead of the US presidential election in November, given the political pressures that come with this. In so doing, UK Trade Secretary Liz Truss criticised the Trump team for talking "a good game" on free trade while restricting import access, and she will be aware that Democrat Joe Biden, if elected in November, has indicated that he would prioritise a US free trade deal with the larger EU market than that of the UK.

To be sure, there are key areas ripe for US-UK agreement in a deal, including lowering or eliminating tariffs on goods. Equally, however, potential icebergs lie on the horizon too, whether Mr Trump or Mr Biden wins.

Specific areas of potential disagreement on trade include the prospect that harmonising financial regulations between the two countries, with the international dominance of Wall Street and the City of London, will not necessarily be straightforward.

Meanwhile, securing agreement in other sectors, including agriculture, where there are divergences of views and strong interest groups, will not be easy either.

Complicated as a UK-US trade deal may prove, between two close allies, it may turn out to be a 'cake-walk' compared to agreeing to one with China. The relationship between Beijing and London is in the deep freeze following Mr Johnson's U-turn over using Huawei technology in the UK's 5G network, disagreements over Hong Kong, and UK concerns over China's handling of the Covid-19 crisis.

The backlash against Beijing particularly in the UK's ruling Conservative Party is, however, much broader and is being driven by factors including pro-US MPs who fear a UK-US trade deal could be threatened unless London matches Mr Trump's hostility to China; human rights advocates concerned about Beijing's treatment of Uighur Muslims; liberal internationalists disturbed by China's perceived challenge to the global rules-based order; and MPs anxious about alleged Chinese anti-competitive practices undermining UK business.

BILATERAL TIES

Indeed, there is now a real possibility that bilateral relations could become even much frostier than during the period after then-prime minister David Cameron gravely offended Beijing by meeting with the Dalai Lama in 2012. London quickly reversed tack after this and the Conservative governments of both a chastened Mr Cameron and Mrs Theresa May subsequently ratcheted down, in public at least, human rights concerns about China with relations entering what was called a "golden era" after President Xi Jinping's UK visit in 2015.

Yet, despite many in the UK still believing that the bilateral relationship could make a significant contribution to UK prosperity for a generation, that golden period may now be a bygone age. For the foreseeable future, the UK government has decided that its growing political concerns over China will trump its financial needs, post-Brexit, with what might become in the next decade the world's largest economy.