Only ‘preliminary’ analysis done on post Brexit US trade deal

Photo : REUTERS/Aly Song

 

Britain’s Department for International Trade has admitted that it has only carried out “preliminary” modelling into a potential US-UK post-brexit trade deal — and has refused to make the information public. Liam Fox, trade secretary, claimed in July last year that DiT analysis suggested that bilateral US-UK trade could rise by £40bn a year by 2030 in real terms “if we’re able to remove the barriers to trade that we have”.

But the ministry has turned down a freedom of information request to publish its economic modelling into the possible deal, saying it is exempt from disclosure. It said that “premature” release of the analysis would be detrimental to the progress of future post-Brexit trade discussions. “There is limited public benefit in releasing analysis that is not complete,” it told Unearthed, an investigative journalism project at Greenpeace, which made the FOI request. According to one official the £40bn figure is understood to involve “basic” analysis which did not take into account any specific issues around the US market such as the difficulty of removing all non-tariff barriers.

The preliminary analysis suggested that an FTA would boost bilateral trade by about £40bn by 2030 compared to having no FTA, a spokesman said. But he conceded that trade between the two countries would probably grow in either scenario. Trade between the two countries was £183bn in 2017.

“The secretary of state is not driven by economic logic but by ideological dogma,” said Barry Gardiner, shadow trade secretary. “This is why he refuses to publish any official analysis done by the Department.” The department said it would release a more comprehensive piece of analysis on trade next year, after the UK has left the EU. The ability to freely negotiate trade deals with the US and other major economies has been central to arguments that the UK would be better off if it left the European customs union after Brexit.

In a speech this year Mr Fox argued that remaining in a customs union with the EU would not be worth the UK losing the opportunity to freely negotiate its own trade deals. Boris Johnson, the Brexit-supporting former foreign secretary, said last summer that the “massive opportunity” of a US trade deal would only be possible if Britain escaped the “lunar pull of Brussels”.

But the government’s internal analysis, published in March by the Brexit committee, was lukewarm. “The modelled US deal . . . (could) provide a benefit to UK GDP of 0.2 per cent in the long term, within a range of 0.1 to 0.3 per cent,” it said. The analysis also predicted Brexit would cause a hit of between 1 per cent and 12 per cent of GDP to the British economy compared to the status quo — even if it achieved a free trade agreement with the EU.

Greenpeace earlier this year recorded Mark Littlewood, director-general of the Institute for Economic Affairs, claiming Mr Fox had requested the IEA to produce an assessment of the economic benefits of a US-UK trade deal — bypassing his own officials. “I went to see Fox a few weeks ago . . . he actually said: ‘look there are five things that my department hasn’t researched and I bloody well need somebody to come up with the answers here because I think it will show great opportunities you know,’” claimed Mr Littlewood. “’Nobody’s yet shown how much a US-UK free trade deal could add to GDP, could you guys go and work that out?’” DiT records show that the minister did meet Mr Littlewood in February this year. But the ministry said it had not commissioned the IEA to do any work on the impact of free trade agreements. The IEA said that it was asked by “policymakers of all kinds” for “thoughts and advice” on relevant subject areas.

“Whether the policymakers in question take up our ideas is down to them,” it said. Mr Fox has carried out four public consultations into free trade agreements with the US, Australia and New Zealand — as well as the potential accession to the Trans-Pacific Partnership, which closed last month. “We are committed to an inclusive and transparent approach to trade negotiations and are currently analysing responses to our consultation, which many businesses, interest groups and members of the public took part in,” a DIT spokesman said. “As previously set out, the government will publish its approach to new Free Trade Agreements before negotiations begin.”

Source :

ft.com

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