Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio New.
Speaker 2 (00:11):
I genuinely believe that we can have a good relationship
and agreement with the US and a good relationship and
a good agreement.
Speaker 3 (00:19):
With the EU.
Speaker 2 (00:21):
That's why the red lines have been really important in
the way that we've negotiated this.
Speaker 1 (00:26):
Two trade deals done in a week. Is Kis Starmer
on a role. You're listening to Bloomberg UK Politics. I'm
Stephen Carroll and.
Speaker 3 (00:32):
I'm Lizzie Burden. Welcome to the program. Well, Kirs Armer's
managed to do two things in a week that had
been long standing goals of previous Conservative governments. One was
a trade deal with India, slashing tarish so on cosmetics, cars, alcohol,
other goods. And that was the UK's biggest trade deal
since Brexit and India's first with a European economy. It
is the culmination of more than three years of talks
(00:54):
under four British prime ministers. And if that wasn't enough,
then there was the news of an agreement with Donald Try.
Speaker 1 (01:00):
And look, there was a big drum roll up to
this as well, Britain being the first country to get
a deal since Donald Trump started imposing his tariffs there's
a lot to be positive about it, but the detail
is quite scant. I think it's fair to say just specifically.
What we know is that in terms of cars, the
import levee is going to come down from twenty seven
and a half percent precisely down to ten percent on
(01:21):
one hundred thousand vehicles exported to the US annually. Then
there's a question of metals tariffs coming down. The British
government says it's going to go from twenty five percent
to zero. The White House has some questions about that,
saying they want negotiation alternative arrangements. That's one to watch there.
In exchange, US exporters get increase market access, faster customs
process for exports to Britain as well a couple of
(01:43):
things to be unresolved there. But certainly a lot of
fanfare around that announcement.
Speaker 3 (01:47):
Yeah, interesting what was not in it as much as
what was in it, And clearly manifestly this is not
the full and comprehensive agreement that Donald Trump had touted.
As you say, Stephen, they're still negotiating on various points,
but in terms of the economic significance, we heard from
the Bank of England Governor Andrew Bailey at the Bank
of England's press conference yesterday ahead of the details of
(02:09):
this framework shall we call it packed, and he was
clearly signaling that it's quite economically insignificant for the UK.
The US China deal is far more significant and indeed
there are talks going on in Geneva about that over
the weekend. Far more important not just to the US
and China, but to the UK as well, more so
(02:30):
than this US UK deal because the hope is that
that will reduce the elevated uncertainty around the world and
mean that demand isn't so depressed. But still politically, as
you say, it is a big deal to have gone
from the back of the Q under Barack Obama to
the front of the Q under Donald Trump.
Speaker 1 (02:47):
Yeah, indeed, And look we've been discussing this with Crawford Faukner,
who was until the end of last year the government's
chief trade negotiation advisor, and we started by asking him
for his view of the significance of these deals with
India and with the US.
Speaker 4 (03:00):
The India agreement is what I would call a genuine
trade agreement. It covers goods and services. It's a big deal.
I mean You've got the fifth and sixth largest world
economies and India is going to be the third largest
before you know it. And the UK has got insider
running with India, and it's a strategic success. You know.
(03:21):
It's a deal with an economy that's growing. So it's
not a perfect deal that you would have with a
developed country, but it's there to build on in the future.
And with the US, I think the government has embarked
on achieving in the short term a damage limitation exercise,
a surgical strike on the biggest sector that was suffering.
(03:41):
It's not a full fat deal, nothing like it. But
there are signs it's not very clear and it hasn't
been brilliantly communicated that there may be a commitment to
something that is bigger to come. I don't know whether
that's people kidding themselves or faking it, but it may
also be true certainly. And Reynolds, I think last night
I heard him saying that they are going to have
(04:03):
a continuing negotiation and the things the President was talking
about be a no relationship really to the narrow arrangement
to get the pressure off on Auto's. So either either
he's been briefed badly, or there is an actual fact
and intention to go further. And if that's the case,
then maybe there is something bigger in the offing, But
I think that will probably take a bit more time
(04:25):
if that's the case.
Speaker 3 (04:26):
Okay, So Jonathan Reynold's the Business and JURD secretary optimistic.
But is the reality that maybe we're in a better
position than before Tariff Day at the start of April,
but we're still in a worse position than when Trump
came in.
Speaker 4 (04:39):
That's absolutely true, But you know, I mean, the reality
is what was going to happen to the auto sector
in the UK was clearly going to be very damaging.
So if you can get a bit of pressure off,
that's great. I think it's a question of how you
characterize it. So I mean, I think that's successful to
have done that in the circumstances. It's something that nobody
(05:01):
else has yet achieved. So I think that's a plus
and it's a move in the right direction. But you're
absolutely right. The real game is to get rid of
those things, and not only to get rid of those
things because they weren't there before, but to go on
ideally and get a better deal. Now I think there
are some reasons why that may not have been possible
(05:22):
right now. They're not being communicated at the moment.
Speaker 1 (05:27):
Perhaps, I mean, is being first more important than getting
the full deal?
Speaker 4 (05:31):
Well, I mean, look, you know, I'm guessing I have
no idea, but I think you've got to look at
the circumstances. We are the first cab off the rank,
and there's therefore there's a risk to both parties when
you're the first cab off the rank. You know, I
don't think, frankly, I don't think the United States really
is that bothered by the UK. Okay, but the United States,
(05:53):
I don't see how the United States could, with its
first deal get rid of its ten percent tariff because
it wants to negotiate with other people, and as soon
as it indicates with the United Kingdom that it can
get rid of its ten percent tariff, then everybody else
is going to say, Aha, we'll sure, yes, that ten
percent that they've got even that's not a flaw. So
the US I think has reasons not to do with
(06:14):
the UK, but for who else it's got in the
queue not to move on the ten percent tariff unless
they get given a fantastic bias deal. And I don't
think the UK was in a position to give them that.
So therefore, you know, at this point in time, both
parties I think would probably have been wary of going
(06:34):
for the full fat deal for their own reasons.
Speaker 3 (06:37):
What about the kind of misalignment, shall we say, on
metals tariffs, different positions from the US and UK coming
out of it. Do you read that as the US
trying to use this as a negotiating ploy.
Speaker 4 (06:52):
Yeah, I'm sure it's a negotiating ploy. Look, I mean
as far as I mean, as far as steel and
out aluminium are concerned. I mean, UK is not a
threat on steel. I mean you may not have noticed,
but you know, an actual fact, we've hardly got a
steel industry left and therefore there is no way that
we're going to significantly impact what they're doing. So I
(07:14):
don't think the steel thing may be wrong, but I
don't think the steel thing would have been particularly difficult
to resolve. There was a lot of hype around what
what it means strategically, and you know where you sit
in terms of the China US rivalry over metals, But
as you can see, I don't I don't think that
one was particularly difficult. I think the Auto's was the
(07:35):
one that the government presumably really wanted to get short term.
So I mean, I'm not wanting to mischaracterize it, but
I mean I think at the moment it's it's kind
of it's an autos steel specific pain pain easing deal
for the time being. But what you don't know is
you know what commitments have been made, if any, for
(07:58):
what is going to happen in future. What the President
seemed to be describing in the White House, to the
extent you could follow the reasoning, it clearly is something
much bigger. I mean, he was talking about five billion,
now you know, did he just pull that figure out
of the air well? No? Luttner could put that five
billion on the white board. So if you add up
(08:20):
the value of what the UK has offered so far
on ethanol, tariffs and a bit of beef, you don't
get to five billion. You get to a billion, max.
So there's another four billion lurking in there that the
President seemed to think has been part of the deal.
The only way you could get to that number is
if you have a bigger deal across the board, and
I don't, And it seems to me quite clearly that
(08:41):
that's what the US has kind of indicated at once.
But that would be a deal that dealt with all
our tariffs and with a number of non tariff measures.
So I don't think that anybody would have been able
to negotiate that kind of deal by today, and I
doubt whether the UK government really have been that interested
in doing it right now while it's still got the
(09:03):
European summit coming up.
Speaker 1 (09:04):
Well, that's I suppose an interesting place to take the
conversation next. You've had two wins in terms of headlines
from trade in the past two weeks. You've got the
U the UKU summit coming up next. The CBI's Ran
Newton Smith was talking to us earlier about a hat
trick potentially of deals. Does this set the bar very
high for what needs to be achieved and what is
(09:27):
the most important trading relationship for the UK?
Speaker 4 (09:30):
I think there will be anything that happens with the
EU will clearly be span as a success. And one
presumes that because there's been quite a lot of expectations raised,
there will be some significant enough events in that. Again,
I would be surprised if there's a massive shift in
(09:51):
the dial.
Speaker 1 (09:52):
What look like a success to you.
Speaker 4 (09:54):
Well know, you know for me, you know, they'll probably
talk about what they're in tensions are on barriers in
the agricultural area and in other goods. They'll obviously want
to have something to say if they can, about where
they've got to on their youth mobility discussions. Clearly there'll
(10:16):
be defense and security stuff which will be played up.
Whether they've got anything else that they have hidden away,
who knows. I mean, normally you would want to have
something that was not foreshadowed, and I've got no idea
what that would be, but you know, that's that's not
a bad package to be going on with with a
lot of with a lot of positive mph from both sides.
(10:36):
It'll probably be a bit more coherent when the Commission
talks about it than it was in Washington. But again
it'll it'll be really positive vibes. So you've got three
positive vibes. You'll have India, You'll you'll have You've had Washington,
which might have been a little bit over hyped but
still as positive. And you'll have the EU, which will
probably be moderately positive, and it will be hyped to
(10:59):
being max positive.
Speaker 3 (11:01):
Anything that we've already given to the US that would
jeopardize deals with EU or China.
Speaker 4 (11:09):
I don't think so at this point. If what you're
talking about is what is narrowly on the table, you know,
the ethanol, the ethanol tariff is probably okay. It's not
going to be a show stopper having a tariff quota
on beef for a moderate amount, which is all that's
on the table. And I'm not quite sure whether that
starts on day one or whether it's phased in, but
either way, it's not not a show stopper for Europe.
(11:33):
And what we've got on auto's is certainly not a
show stopper, and that's it. So none of that, none
of that is a problem for what we do with
the EU, precisely because it's so narrow. It's easing the
pain of what the US had done before, and so
therefore it isn't shifting anything on the dial as far
as our regulatory arrangements are concerned.
Speaker 1 (11:52):
So we've had two trade yet, we've had two trade deals,
and we're looking forward to the UK EU sum much.
There's love talking of bragsit years, but how the UK
had last its experience in negotiating trade deals because that
you had probably been doing it for decades. Does this
now show that Britain is back to being a negotiating
powerhouse and trade You.
Speaker 4 (12:11):
Know, you'll probably accuse me of marking marking my own homework,
but I mean, I think we've been in that position
for a few years. I've always said, and now that
I've gone an actual fact, the power that's there can
be unleashed. So I'm not casting a shadow over it.
Things that if anything improved. We've got a fantastic team
(12:31):
of negotiators in the UK now we have done more
deals than anybody else. We have been liberalizing, so I
just think it's it's an amazing team. It doesn't surprise
me that we're continuing on to produce those negotiations. We
you know, we did all of the so called rollover agreements.
We did agreements with Australia and New Zealand, we did
(12:53):
an improved agreement with Japan, We've done CPTPP and now
we're doing India GC season the works. Let's it's a
great performance. It's a great machine.
Speaker 1 (13:03):
So that was Crawford Faulkner, who was until the end
of last year, the UK government's chief trade negotiation Advisor.
That's it from us for today. If you like the program,
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you listen.
Speaker 3 (13:16):
This episode was produced by James Wilcock and our audio engineer,
with Sean Guestamachia. I'm Lizzie Burden and.
Speaker 1 (13:21):
I'm Stephen Carroll. We'll be back next week with more.
This is green Berg.