Balanced Free Trade Agreement
As these two sea states consider new bilateral trading waters, there will be exciting economic benefits to managing and avoiding dangerous depths, while a new navigational compass will be used: the UK`s exit from the European Union and its internal market. Over the past 47 years, the UK has complied with the EU and not US standards and regulations. The UK`s reorientation to the European Union, its largest export market, is itself an important strategic decision. The economic impact of Brexit could reduce the UK`s GDP by 5-10%. In addition to a free trade agreement between the United States and Britain, Britain must also negotiate its trade relations with other countries, particularly Commonwealth countries such as India and Australia, which hold out great promises and can challenge or reduce elements of a free trade agreement between the United States and Britain. But what will move the country in the future? A selective independent route? The United States or a North American trade orientation? A Commonwealth approach? Focus on the Pacific? Negotiators from the United Kingdom and the United States have set a broad framework for a comprehensive free trade agreement, but the upcoming U.S. presidential elections put pressure on the timing to reach a broad agreement (the U.S. Trade Promotion Agency, which allows Congress to accelerate any eventual deal, ends in July 2021). January 2021 could also be a particularly difficult time for the UK if its participation in european supply chains and standards is abruptly halted. But if both sides are able to overcome these obstacles, a free trade agreement between the United States and Britain could redirect the British economy to North American markets, which may justify further steps toward integration into the U.S.-Mexico-Canada agreement.
If no free trade agreement between Britain and the United States can be concluded by the end of the year, the British government will not be able to immediately demonstrate the benefits of Brexit, while the British people will know their full cost. Proponents of balanced trade argue that it is easy to measure and manage because it does not require complex calculations and assessments of an economy`s exports and imports. They argued for a trade deficit in terms of protecting growth, employment and wages in an economy, based on the assumption (implicit or explicit) that imports will be equivalent to sending jobs abroad. There is little incentive for a surplus trade economy to balance, as it would, conversely, lead to a decline in employment and growth. Harnessing commercial potential. A free trade agreement between two advanced economies has little to do with the already considerably low tariff reduction (some of the highest UK tariffs are 10% for cars). The benefits, as would be the case with a potential free trade agreement between the US and the EU, come from harmonising and harmonizing standards and rules. According to credible estimates, this could represent 0.16% of the UK`s additional GDP over the next 15 years, with the removal of tariffs and the reduction of 50% of other barriers.