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US demands should come as no surprise given UK approach to trade talks

Posted by Warwick Business School at 27 November 2019, 17:55 CET |
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Nigel Driffield, Professor of International Business at Warwick Business School, comments on the leaked documents on UK-US trade talks.

"These documents show that in trade negotiations "leverage" is everything. This is usually associated with size, which is why huge economies like the US, EU, and China have never really been able to get the upper hand on each other in trade talks. Negotiating with the UK on its own is a very different prospect.

"The documents appear to be following a different path from the normal approach to trade talks, which is to start by asking for access to the other's market, then conceding just enough to get what you want.

"In other words, trade deals are done to find a way of maximising total gains from trade and then working out a way of sharing those benefits.

"However, in this case it appears the major focus from a UK perspective is a political one - to get a deal that can be announced. Therefore a different question has been asked, "what will it take to get a trade deal?"

"The fact that US response includes food standards, NHS drug prices, and access to UK healthcare 'markets' should come as no surprise.

"Another problem that the UK faces is that the civil service does not have the capacity to do the detail cost-benefit analysis required and as a result, the government appears content to use think tanks for this work. It is therefore important to ask what role lobbying or 'think tanks' have played in these discussions and, in turn, what their interests are and who is funding them."

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