August 25, 2019 / 8:55 AM / 25 days ago

Trump dangles 'very big' trade deal in front of Brexit Britain

BIARRITZ, France (Reuters) - British Prime Minister Boris Johnson on Sunday said he and President Donald Trump were “gung-ho” about a post-Brexit trade deal but cautioned the United States would be tough negotiators and that he would not rush talks.

Trump promised a big trade deal for Britain after it leaves the European Union, which he said had been a drag on Britain’s ability to cut a good deal.

Facing a delicate task of assuaging European allies while not angering Trump at a G7 summit in France, Johnson said there were huge opportunities for British businesses in the U.S. market, but hinted at differences between the two sides on the scope of a deal.

Moreover, he added, Washington would have to relax some “protectionist” policies.

“They want to do it within a year, I’d love to do it within a year, but that’s a very fast timetable,” he told Sky News.

Earlier, before the two leaders began a trade-focused bilateral meeting, Trump said he was looking forward to discussing big numbers with Johnson.

“We’re going to do a very big trade deal - bigger than we’ve ever had with the UK,” Trump said. “At some point, they won’t have the obstacle of - they won’t have the anchor around their ankle, because that’s what they had.”

BREXIT UNCERTAINTY

With less than three months until an Oct. 31 deadline, it is still unclear, how, when or even whether Britain will leave the EU. The uncertainty around Brexit, the United Kingdom’s most significant political and economic post-war move, has left allies and investors aghast and roiled markets.

Britain has yet to agree any kind of exit deal to smooth the divorce between the world’s fifth largest economy and its biggest trading partner, raising fears of shortages and widespread disruption.

However, Johnson said meetings with German Chancellor Angela Merkel and French President Emmanuel Macron last week had helped his case for a better exit deal. There was a “dawning realisation” in Brussels that Britain’s objections to the existing deal were implacable.

“I think it’s going to be touch and go but the important thing is to get ready to come out without a deal,” he told the BBC.

Opponents fear Brexit will make Britain poorer and divide the West as it grapples with both Trump’s unconventional presidency and growing assertiveness from Russia and China.

Supporters acknowledge the divorce might bring short-term instability, but say in the longer term it will allow the United Kingdom to thrive if cut free from what they cast as a doomed attempt to forge European unity.

U.S. President Donald Trump and Britain's Prime Minister Boris Johnson arrive for a bilateral meeting during the G7 summit in Biarritz, France, August 25, 2019. Erin Schaff/Pool via REUTERS

Johnson also met European Council head Donald Tusk, who on Saturday said Johnson would go down as “Mr No-Deal” if he took Britain out of the EU without a withdrawal agreement.

A British official said Johnson told Tusk that Britain would be leaving the EU on Oct. 31 whatever the circumstances.

Sky News reported that Johnson would tell Tusk Britain would only pay 9 billion pounds ($11 billion) instead of the 39 billion pound liability agreed by former prime minister Theresa May under a no-deal Brexit.

Asked about the report, Johnson said: “If we come out without an agreement it is certainly true that the 39 billion is no longer, strictly speaking, owed.”

TRADE DIFFERENCES

Trump and Johnson were in the French seaside resort of Biarritz for a summit of G7 industrialised nations where sharp differences have emerged over trade protectionism and an array of issues including Iran and North Korea.

On his arrival on Saturday, Johnson said of the escalating U.S.-China trade war that he was “very worried” about the growth of protectionism. Those who “supported tariffs risked incurring the blame for the downturn in the global economy”, he said.

Sitting opposite Trump on Sunday, Johnson praised the performance of the U.S. economy before adding: “But just to register a faint, sheep-like note of our view on the trade war - we are in favour of trade peace on the whole.”

President Donald Trump participates in a G-7 Working Session on the Global Economy, Foreign Policy, and Security Affairs at the G-7 summit in Biarritz, France August 25, 2019. Andrew Harnik/Pool via REUTERS

London’s preference is for a comprehensive free trade deal with the United States post Brexit, UK government officials say, while some U.S. officials including Trump’s national security adviser John Bolton have talked of a sector-by-sector approach.

As Johnson said London and Washington would do a “fantastic deal”, Trump interrupted to say: “lots of fantastic mini-deals, we’re talking about many different deals but we’re having a good time.”

Writing by Richard Lough, Editing by William Maclean

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