Some Good News

Yesterday The Conservative Treehouse reported that the United States and the United Kingdom will begin negotiations on a new free trade agreement. This is great news. As Britain leaves the European Union, they are going to need good trade agreements to keep their economy healthy. As America begins to disengage itself from dependence on China, it is going to need good trading partners. This is definitely a win-win.

The article notes:

The United States is essentially a self-sustaining economy. Meaning, if you think about a nation as an independent construct able to sustain itself; our imports are enhancements not priorities. Our domestic resources, energy development, food production and essential internal needs are capable of sustaining our population.  The import of products is valuable, but in the bigger picture not fundamentally necessary for survival.

The United Kingdom is very similar in this regard. The U.K. has abundant energy resources, food and agricultural development, and is positioned as an independent economy absent the dynamic of internal politics regulating those functions. Domestic politics surrounding left-wing climate change (energy development etc), to restrict internal development, are a function of ability, not necessity. The U.K. has abundant coal, oil and natural gas; it also has abundant agriculture.  [The U.K weakness is military defense.]

Because both nations are similar in their ability to be non-dependent on trade, a free trade agreement is essentially a second-tier negotiation on products and services that enhance the independence. This is a unique dynamic not found in all trade discussions. Two independent economic systems negotiating on trade enhancements to each-other.

This is a much different dynamic than negotiation with a dependent country like China. China cannot feed itself, it needs to import raw materials to sustain itself; thus the importance of the One-Belt/One-Road Beijing initiative. China is a massive economy, but China is also a dependent economy; subject to damage from external dynamics.

Similarly, due to advanced political ideology, Canada cannot sustain itself economically; however, they are dependent by choice. Currently Mexico is not self-sustaining; they too are dependent on both access to the U.S. market and the import of industrial goods. However, unlike Canada our southern trade partner is working toward self-sustenance.

…A U.S-U.K trade agreement would not be based on “essential” trade products or “vital” trade services. The trade is not essential, but it is complimentary.

A U.S. and U.K. trade agreement is based on mutual enhancements or mutual benefits. This is an important distinction to keep in mind because it plays into the larger geopolitical dynamic.

The U.K. is currently in a post-Brexit negotiation phase after they spit away from the European Union. Strategically, it is smart for the U.K. to enter into trade discussions with the U.S. for needed products and services they might currently be gaining from the EU.

The timing of trade discussion with the U.S. gives Prime Minister Boris Johnson leverage toward the EU.  President Trump and Boris Johnson have previously discussed this.

Additionally, the U.S. and E.U will eventually have to work out a new trade agreement because President trump is realigning all existing U.S. trade terms.

Definitely a win-win.