U.S. Companies Turn to Brexit Britain for Increased Trade Despite U.K. Fears of Trump Trade Deal, Surveys Show

Two new surveys show that both American and British businesses hope to prioritize transatlantic trade ties in the Brexit era, as the U.K. drifts from its European cousins and towards a more americanophile economic and diplomatic strategy.

The investigations—acquired exclusively by Newsweek—showed that American companies put the U.K. third behind only Canada and China in a ranking of predicted future trade over the next five years, during and after the country's tortuous departure from the European Union.

And for the Brits, a majority of business leaders surveyed wanted to prioritize a free-trade deal with the U.S. over one with the EU and China, despite fears among some British politicians and voters that such an agreement would open the country up to damaging U.S. business practices.

Pro-Brexit British politicians—including current Prime Minister Boris Johnson and his Conservative Party, currently on course to win the general election scheduled for December 12—are pivoting towards the U.S. in the hope that a wide-ranging free-trade deal will soften the blow of leaving the world's largest single market.

But more progressive politicians are warning that the U.K., as a junior partner in a prospective trade deal, could be forced to accept the lower regulatory standards of the U.S., undermining food hygiene and quality, workers' rights and environmental safeguards.

Brits are especially concerned they will be forced to open up the treasured National Health Service to U.S. companies, driving up healthcare costs as on the other side of the Atlantic.

Opposition parties have cast the U.S.—and especially President Donald Trump, who is deeply unpopular in the U.K.—as somewhat of a bogeyman during their election campaigns, arguing that a vote for Johnson is a vote for a Trumpian brand of unfettered U.S. capitalism and further deregulation.

Trump himself has fanned the flames with contradicting statements about the U.K., vowing the country would be at the "front of the queue" for a deal after Brexit. He also added that all areas of the economy—including the NHS—would be "on the table." He later walked back the assertion following backlash in the U.K.

Lawmakers in the U.S. have also been sounding the alarm, warning that Congress will not ratify any trade deal perceived to undermine the Good Friday Agreement that ended Northern Ireland's bitter sectarian conflict, a key facet of which is a demilitarized border between the province and the Republic of Ireland to the south.

A hard break with the EU may necessitate checks and security infrastructure at the border, which is currently unmanned. This could spark anger among nationalists and make any facilities a target for renewed attacks.

Despite such concerns, Western Union's "US Outlook 2020" report—which surveyed 1,000 American companies—found that U.S. business leaders rank the U.K. behind only China in first and Canada in second in terms of expected trade opportunities over the coming five years.

The U.K. and its 66 million people offer a tantalizing economic opportunity for American firms, especially if its currency continues to devalue in the face of a chaotic Brexit. Western Union said U.S.-U.K. trade in goods and services was valued at $261.4 billion in 2018, citing the Office of the United States Trade Representative. Among this was $140.4 billion worth of exports.

Western Union noted that the U.K. was ranked especially highly by energy, commodities and mining firms.

The enthusiasm for British-American cooperation is shared by U.K. companies, according to the Maritime UK survey conducted by Survation.

Survation spoke with 514 British business leaders asking which market the British government should prioritize if Britain leaves the EU customs union, a move favored by Johnson and the Conservatives.

The U.S. edged out the EU 53 percent to 52 percent, respectively, with China in a fairly distant third on 32 percent. Behind them were Australia on 23.5 percent and New Zealand on 14.4 percent.

Harry Theochari, Maritime U.K.'s chair and the head of global transport at the Norton Rose Fulbright law firm, said the U.S. and U.K. are "natural global partners," and that the U.S. is already the U.K.'s largest single-country trading partner.

"But there is scope to do much more together," Theochari argued. "And that will only help drive investment, growth and jobs across our country."

The looming election—the first December vote in more than a century—may bring some much-needed clarity to the Brexit tangle.

If the Conservatives win a majority—as the polls currently indicate they will—the U.K. will likely pursue a hard Brexit, i.e. one in which the country leaves the single market and customs union and does not maintain close alignment with the EU. This would make a trade deal with the U.S. easier from a legal perspective and more desirable to plug a gaping economic hole.

But if the Conservatives do not triumph—whether that means they are forced to govern with a minority in Parliament or are defeated by Jeremy Corbyn's Labour Party—the next stage is less clear, with more negotiations between London and Brussels likely.

Donald Trump, Boris Johnson, UK, US, trade
President Donald Trump and British Prime Minister Boris Johnson hold a meeting at UN Headquarters in New York, September 24, 2019, on the sidelines of the UN General Assembly. SAUL LOEB/AFP via Getty Images/Getty
U.S. Companies Turn to Brexit Britain for Increased Trade Despite U.K. Fears of Trump Trade Deal, Surveys Show | News