Keep calm and carry on trading: Donald Trump TPP tantrum will not hurt UK
Donald Trump's proposed scrapping of the Trans-Pacific Partnership (TPP) for the US shouldn't keep UK dealmakers up at night and could even work in the country's favour, experts have told City PM
In the late hours of last night, the President-elect said he would pull the US out of its involvement with TPP on his first day in office.
Sam Bowman, executive director at the Adam Smith Institute, noted Trump's anti-trade deal comments had focused on "unskilled workers in foreign countries undercutting US jobs", which wouldn't be a major consideration in a UK trade deal.
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"It's certainly not a step forward but it's not a huge step backwards. I definitely don't think we should worry too much in the UK about it," he said.
However, TPP might not be the only trade deal on President-elect Trump's chopping block, with Bowman pointing out the complexity involved in the Transatlantic Trade and Investment Partnership (TTIP) made it a likely candidate for scrapping.
The would-be agreement between the US and the EU has been through multiple rounds of negotiations but no concrete plan has come to light.
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"The situation [with Trump and TPP] highlights the major problem facing the conclusion of ambitious multinational trade deals," added Anthony Woolich, partner at Holman Fenwick Willan. "Such deals may be negotiated over a long period of time – the TPP negotiations commenced in February 2008 – but can be delayed or defeated by a change in government or policy by just one of the parties negotiating the deal."
However, any deal the UK strikes with the US is likely to be much more straightforward, a factor that could ultimately work in the UK's favour.
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"It's possible that, with Trump's stated preference for bilateral-only trade deals, he may seek to use the UK as way of differentiating his approach to trading partners," noted Allie Renison, head of Europe and trade policy at the Institute of Directors. "There may be a considerable amount of dialogue between the British and American governments on deepening trade and economic ties, but they will have to wait for the outcome of Brexit negotiations to make substantial headway."
Shanker Singham, chairman of the Legatum Institute's special trade commission, added: "I think the notion of, 'Oh, he's killed a trade agreement, therefore he's against trade' is incredibly simplistic and not accurate."
Singham added the US threatening to pull out of TPP created a situation where there were several countries which want to strike deals but less options to turn to – something the UK could use to its advantage which is "extremely good news".