In a world run by free traders, both sides would come forward with an offer to remove all barriers, and the negotiation would be short and sweet. However, the political reality is that trade agreements are a careful balance of “concessions” on market access by each side.
There are systemic issues related to the governance of trade agreements that are important as well. The UK negotiators should not ignore these, because they affect the long‐term functioning of the agreement. In particular, the UK negotiators should be aware of two positions taken by the Trump administration in the renegotiation of the North American Free Trade Agreement*: to maintain weak dispute settlement and to add a “sunset clause” to the agreement.
These issues may make an appearance in the US-UK trade talks and the UK negotiators should be ready.
Beware the NAFTA Precedent
On dispute settlement, a crucial element to a functioning process is that parties should be able to file complaints and get a neutral panel appointed to hear the dispute whenever needed. NAFTA was famous for the problem of “panel blocking” and was fundamentally flawed in this area.
The dispute process worked for a few years, but then in 2000 the United States took advantage of a gap in the rules in order to stop a panel from being appointed to hear a complaint about US restrictions on imported sugar. No panels were appointed after that incident.
There were calls to fix this issue in the NAFTA renegotiation, but the United States resisted, and the first version of the new NAFTA (the USMCA) did not solve the problem. Eventually, in response to demands by the House Democrats, the Trump administration agreed to make changes, which appear to have dealt with the issue.
If confronted with this issue, the UK negotiators should insist on dispute settlement rules that function properly, including a guarantee of a dispute panel when needed.