Brexit Bust? Despite Warnings, UK Now “At Front Of Line” For Trade Deal

Less than 3 months ago, on April 22, in an address to the British people that may have cost David Cameron his job and led to the ever more rancorous divorce between the UK and the EU, Barack Obama warned that the UK would be at the “back of the queue” in any trade deal with the US if the country chose to leave the EU, as he made an emotional plea to Britons to vote for staying in.

Two months later, a majority of Brits gave Obama the finger and Britain is no longer part of Europe.

But while that story in itself would be quite satisfying, it turns out that Obama lied. Again.

As it turns out, not only is the UK not at the back of the queue, it now finds itself at the very front. As reported by the FT, the Obama administration has begun preliminary discussions with senior UK officials about how they might pursue a trade agreement between the two countries following Britain’s exit from the EU, Washington’s top trade official said.

The discussions were revealed on Thursday by Mike Froman, the US trade representative, and coincide with a growing push by Republican Brexit supporters in Congress for President Barack Obama to launch talks on a commercial pact quickly.

So much for yet another typically hollow, worthless threat by the well-spoken, teleprompted golfer in chief. Even the FT is amused by the idiotic diplomacy of the president, which highlights “how quickly the president and his administration have backed away from his warnings before last month’s referendum that Britain would be at the “back of the queue” for any trade deals with the US if it voted to leave the EU.”

So what does Britain’s “most favored nation in the queue” status get it? As the FT explains, “Froman said he had discussed Britain’s plans and a possible bilateral trade pact with a number of senior British officials since the referendum. In the past week alone he spoke with Sajid Javid and Mark Price, the UK’s outgoing business and trade secretaries. He had not yet spoken with Liam Fox, the incoming minister for international trade in the new government of Theresa May, who took over as the UK’s prime minister on Wednesday.

But Mr Froman warned that there was still significant uncertainty surrounding what sort of agreement the US and UK would or could negotiate, primarily because a lot depended on the exit deal and trading relationship with the EU that Mrs May’s government ended up negotiating. “What precisely they negotiate with their other trading partners will depend in part on what model they develop in their relationship with the EU,” Mr Froman told a breakfast discussion organised by the Christian Science Monitor.

“Will they have sovereignty over tariffs? Will they have sovereignty over regulations? . . . Until you get more clarity around that it’s hard to determine precisely what kind of trade relationship they might be able to negotiate with others.”

What the final deal is, one thing is certain: it will be a better one for the UK than anything it could have done as part of the EU. Recall that members of the EU are not allowed to negotiate their own trade deals with other countries outside the bloc. As such, any UK-only deal will be far more focused and better tuned to the UK’s specific needs.

Confirming that the UK does not need to trigger Article 50 to finalize a trade deal with the US, Froman added that British officials clearly believed that they could have “discussions” with the US and other trading partners while the UK was still in the EU. “Where discussions end and negotiations begin I think is quite a grey area and I think this is something we are going to have to continue having dialogue about,” he said.

Ironically, the UK may end up getting a far better deal now that if it had remained in the EU:

Among the options being batted around was the idea that the UK might eventually join a TTIP deal once it had worked out its relationship with the EU, he said.

The administration’s preliminary discussions come alongside a groundswell of support from Republicans in Congress for the UK’s move to leave the EU, with many seeing it as an opportunity to strengthen the relationship between London and Washington.

Trade already sits at the centre of that. Kevin Brady, chairman of the influential House ways and means committee, and Orrin Hatch, who chairs the Senate finance committee, introduced a resolution on Wednesday calling for the president to begin discussions over a trade agreement with the UK.

As Hatch trailed off, he said that “the special relationship between our two countries must be fortified as the UK navigates the process of withdrawing from the EU.”

Could it be that Brexit is about to be the best thing that ever happened to the UK? With every passing day, it looks more likely that that is precisely the outcome. Then again, it probably should not be a surprise: after all, every single “expert” predicted just the opposite, so it was quite inevitable. Meanwhile, as the UK enjoys its position at the very front of the queue, this is what is going on at the back of the bus.