Sat. Jan 25th, 2020



Trump: US and UK working on ‘very substantial’ trade deal

2 min read

US President Donald Trump has said talks about a “very substantial” trade deal with the UK are under way.

He said a bilateral post-Brexit deal could lead to a “three to four, five times” increase in current trade.

There are no details about how this would be achieved.

After a phone call with Boris Johnson on Friday, Mr Trump said the new prime minister would be “great”. He added US-UK trade had previously been “impeded” by Britain’s membership of the EU.

Once the UK leaves, he said, the UK can expect to do “much more” trade with the US, he said.

Mr Johnson and Mr Trump said they would begin formal negotiations “as soon as possible” after the UK leaves the EU.

While the UK is in the EU, it cannot sign its own trade deals. Brexit is due to happen on 31 October.

What is a trade deal?

Trade deals involve two or more countries agreeing a set of terms by which they buy and sell goods and services from each other.

Deals are designed to increase trade by eliminating or reducing trade barriers. These barriers might include import or export taxes (tariffs), quotas, or differing regulations on things such as safety or labelling.

Why don’t the US and UK already have a trade deal?

In short, because the US and EU do not have one.

The EU customs union forbids members negotiating trade agreements separately from the EU. Instead, trade agreements are negotiated collectively.

In 2013, under President Barack Obama, the US and the EU launched a programme of negotiations known as the Transatlantic Trade and Investment Partnership, or TTIP.

That proposed trade agreement was put on hold by the US after Mr Trump was elected as president, but the EU has approved new talks.

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