48 days to go - do we want to be alone?

"We'll have up to 40 [free trade agreements] ready for one second after midnight in March 2019," was Laim Fox's pledge to the Conservative party conference in October 2017. So it must be true. Even if he didn't specify that he meant 29 March. And 23:00, since May & co have even capitulated on the time zone - Brexit happens to Brussels time.

But now the Financial Times tells us "UK government has told businesses it cannot guarantee the British economy will be covered by 'most' of the EU’s global network of trade agreements immediately after Brexit - even if parliament approves Theresa May’s divorce deal with Brussels".

The Withdrawal Agreement May has agreed with the 27 other member states includes an undertaking by the EU (in a footnote on page 203) that it will ask its (currently our) trading partners to continue to act as if (= pretend) we are still a member state and therefore covered by all these agreements during the transition period.

I await Fox's statement of which countries will go along with this, and some of those at the briefing reported by the FT say the same. One of them observed "I am particularly worried about small businesses, who may not even know that their trading depends on some of these agreements".

Occident

We're used to Trump's "trade doctrine" that any new trade must reduce the U.S. trade deficit, strengthen manufacturing and boost growth, and we know on some measures the UK has a trade surplus with the US.

Tread carefully.

Before Trump was even inaugurated, his incoming Commerce Secretary Wilbur Ross was telling Cyprus (where he'd served as vice-Chairman of the Bank of Cyprus and with which he has some interesting Russian links) to exploit the "God-given opportunity" to steal business from the UK.

The doctrine was expressed in the run-up to renegotiating a NAFTA trade agreement that "triggers renegotiation whenever the US develops a trade deficit with Canada" but not, perhaps, vice versa.

Talking about UK trade, the threat of chlorinated chicken has become a joke, but US lobbyists want rather more than that from any trade deal with the UK. To take a handful of demands from the 30 which Huffington Post listed:

• Scrap the safety-first approach to food quality and standards
• Stop people knowing what they're eating is genetically modified
• Change how the NHS buys drugs
• Ensure Brits' data can be transferred to foreign countries
• Allow foreign businesses to sue the British state
• Legalise dangerous pesticides

Davis and Paterson's expenses, and who paid them

You have to ask what contribution David Davis MP, Owen Paterson MP and Shanker Singham (of Legatum, the Institute of Economic Affairs, then... who knows, as the Charity Commission catches up with him) made to the same case.

But those aren't the only demands coming from the US. Irish foreign minister Simon Coveney was in Washington on Wednesday and received strong backing from "US politicians with affiliations to Ireland" who "wield great influence over US trade policy".

"Peter King, a Republican representative from New York, said it was 'important' that the current unmanned 'soft' border on the island of Ireland be maintained 'if the British want to consider any kind of trade agreement with the United States'." And "Brendan Boyle, a Democratic representative from Pennsylvania on the House ways and means committee, said it was 'hard' to get trade agreements through Congress. He added: 'Trust is important, and if you are about to enter a trade negotiation and you’ve gone back on the backstop and you’ve gone back on the Good Friday Agreement, then that will certainly be remembered'". Ireland has friends on both sides of the Atlantic. Do we still...?

Orient

The EU-Japan Economic Partnership Agreement entered into force on 1 February, building the largest open trade zone in the world, with 635 million people and getting on for a third of the world’s GDP. Apart from trade provisions the agreement sets ambitious standards on sustainable development and includes a specific commitment to the Paris climate agreement.

"Under the pact, Japan will remove tariffs on 94 per cent of all imports from the EU, including 82 per cent of farm and fishery products. For example, the deal scraps Japanese tariffs on gouda and cheddar cheese - which are close to 30 per cent - as well as on wine, which faces duties of 15 per cent on average. Beef and pork exports are also likely to rise. For its part, the EU will eliminate tariffs on 99 per cent of imports from Japan. It will abolish tariffs on Japanese cars and trucks in the eighth year and televisions in the sixth year following the pact's implementation."

The UK is part of this agreement until 23:00 on 29 March 2019. Nobody yet knows what happens after that, but some of the options are:

• If the Article 50 period is extended, for whatever reason and for whatever period, we remain a member of the EU and a beneficiary of this arrangement during that period.
• If some version of the current withdrawal agreement is ratified, we enter a transition period and EU trading partners will be asked to treat us as if we are still a full member (see above). According to Faisal Islam's Google translation of a letter from Japanese customs, they assume that everything will stay the same if there is a transition period.
• From the same letter, if there's no deal, and therefore no transition period, the UK and Japan will deal with each other on WTO Most Favoured Nation terms - the tariffs we used before 1 February 2019. We will have been parties to a preferential trading agreement for less than two months.
• If the Article 50 notification is revoked, we will continue as a member state of the EU, all this will have been a bad dream, except that people will look at us strangely when leaders meet, and we will not be thought of as the same steadfast, sensible pillar of the world order that we'd like to think we are.

For the future, transition period or not, we will have to do our own deals, and the FT tells us "Tokyo is confident that it can secure better terms from the UK than it did in negotiations with the much larger EU, and is not willing to duplicate the existing treaty precisely in either a bilateral deal or in talks for the UK to join the Trans-Pacific Partnership group". Who's surprised?

Shopping in Myeong-Dong, Seoul.
Photo: Uwe Schwarzbach via a CC-BY-NC-SA 2.0 licence

We have a trade agreement with South Korea as well, at the moment. Jim Pickard of the FT tells us "business sources tell me South Korea is also hoping to use its leverage to extract concessions from the UK over a new trade deal: for example only letting UK count EU industrial parts in "rules of origin" calculations if Seoul can count Chinese parts". Again, who's surprised?

Nobody who keeps up with the LSE blog on Brexit will be surprised. In a post entitled "Can ‘Global Britain’ forge a better trade deal with South Korea? This is why it’s unlikely" we see (I resisted the temptation to include lots of lovely data and analysis):

1. The UK outside the EU will be a ‘second tier’ player when it comes to negotiating free trade agreements, considerably weaker than the ‘big three’, of the US, the EU, and China;
2. It will be easier for the UK to sign trade deals with the 53 countries with which the UK already has free trade agreements, via its current EU membership;
3. One of the countries high on this list will be South Korea, which has a very comprehensive FTA with the EU, covering services and non-tariff barriers, which has already reaped important benefits to both the UK and South Korea;
4. But, South Korea will be reluctant to replicate the terms of the EU-South Korea FTA for the UK, because it would expect a better deal with the UK than it managed to negotiate with the EU (because the EU has an economy 10 times larger than South Korea, whereas the UK economy is only twice the size of South Korea);
5. If the UK fails to reach an agreement with South Korea, this would lead to the re-imposition of tariffs on UK-South Korea trade, and would jeopardise the significant services trade that has developed between these two economies; and
6. Even if South Korea and the UK could agree to replicate the terms of the EU-South Korea agreement, the “rules of origin” in the deal could mean tariffs on many manufactured goods from the UK (such as cars) as a result of the large content of parts from elsewhere in the EU, which would count as made in a “third country” once the UK has left the EU.

And finally

"It’s wonderful to see Liam get his own platform in the digital world,” an aide to the business guru Fox told LCD Views, “and here I was thinking he wasn’t even up to the job of being a shoehorn for someone putting on flip flops. Shows what I know!”

Laim Fox has found his true level as a frequent flyer feature writer for TripAdvisor, we are informed by LCD Views.