A slow-burn US trade deal is no bad thing – for the UK at least

Ultimately it is in the self-interest of Britain, America, and the EU for there to be as near frictionless trade as possible between all three

The US ambassador to the UK, Woody Johnson, is quite right that a “massive” trade deal with between the two countries cannot be completed quickly if Theresa May’s exit agreement with the EU is agreed. But that is not a sound reason for rejecting the plan the prime minister has negotiated, which is merely about the exit terms rather than the future trading relations with the EU, and indeed with other countries.

Ultimately it is in the self-interest of the UK, the US and the EU for there to be as near frictionless trade as possible between all three. The question is how best to get there from here.

The key point is this. Under the exit plan, the UK remains within a customs union with the EU until the transition period is complete. This preserves an open trading border with the EU, which is extremely important to avoid disruption to the complex supply chains that bind UK and EU industries together.

It also provides a temporary solution to the Irish border problem: how to preserve open trade when Northern Ireland is no longer part of the EU. But being in one customs union means you cannot do a trade deal with anyone else.

On a long view there are several sound reasons why the UK should not be part of the EU customs union.

First, the EU is growing relatively slowly, relative that is both to the US and to the emerging world. Second, the US is already the UK’s largest export market, roughly the size of Germany and France put together, though if you add in the rest of the EU, Europe is larger than the US.

Third, UK trade with the US is roughly in balance. By contrast we export much less to EU countries than we buy from them. In that sense the US is a better market for the UK than Europe. Fourth, the UK buys much of its imports from the rest of the world and would no longer have to charge import duties on these goods.

However, to leave the customs union now would lead to huge disruption, with unpredictable consequences. No economy can suddenly change the direction of its trade, nor would you want it to, even if it were practicable. So for the UK there is a trade-off: smoother trading relations for the next couple of years against a slower expansion of trade relations with the US. For the US there is no such trade-off. It would like better access to the UK market.

Moving fast makes sense for them. Moving slower makes sense for us.

Eventually it should be possible to maintain a close trading relationship with the rest of Europe, even outside its customs union. Switzerland has done so. Norway has done so. Whatever transpires in the next three months – and The Independent has argued for a Final Say on the issue – we must keep that goal in our sights.

Ambassador Johnson may be right about the speed and scale, but in truth there will eventually be a trade deal with the US – this is not a case of either/or. Britain’s future trading relationships, whether with the US or the EU, must not be hostages to political grandstanding. In the real world of international trade it pays to be careful, measured and precise.