Pompeo Brushes Off Tensions to Hand U.K. Brexit Trade Boost
Pompeo Says U.K. Will Be Front of Line for Trade Deal with U.S.
(Bloomberg) --
U.S. Secretary of State Michael Pompeo said the so-called special relationship with the U.K. is “in a fantastic place,” as he promised to prioritize sealing a “gold standard” free trade deal after Brexit.
His comments in London are a boost for Boris Johnson a day before the U.K. leaves the European Union: the prime minister and other Brexiteers have long argued that securing new trading terms with the world’s biggest economy are one of the great prizes of Britain’s departure from the bloc.
“We intend to put the United Kingdom at the front of the line” for a free trade deal, Pompeo said, speaking alongside British Foreign Secretary Dominic Raab at the Policy Exchange think tank. “We intend to continue to take the relationship, which we think is in a fantastic place today and put it in an even better place in the weeks, months and years ahead.”
The Trump administration has repeatedly said it wants to strike a new trade agreement with the U.K. as soon as possible. That is in sharp contrast with the warning from former President Barack Obama, who said during the 2016 referendum campaign that Britain would be at the back of the queue if voters chose to exit the EU.
But relations between Washington and London have been dogged by friction in recent months on issues including how to manage Iran’s nuclear ambitions, the involvement of a U.S. diplomat’s wife in a fatal U.K. car crash, Johnson’s plan to impose a digital tax on U.S. technology giants, and the use of technology from Chinese company Huawei Technologies Co. in telecommunications networks -- something Pompeo has regularly warned the British government not to allow.
Pompeo’s friendly words on Thursday will be seen as a welcome shift in tone in Downing Street.
‘What the Heck?’
“It’s your best friends you call up and say ‘what the heck are you doing?’” Pompeo said. “You can’t have those conversations without a deep relationship, because if you have them with people you don’t have that type of relationship with, you risk the relationship. This relationship is not at risk.”
Raab agreed, saying “the sea of things that we do agree on overwhelms the occasional drop of disagreement.”
The U.K. will be free to negotiate trade agreements with countries outside the EU when it leaves the bloc on Friday, and Pompeo talked up the potential for both sides.
“We ought to be able to put together the gold standard for what a bilateral trading arrangement ought to look like,” Pompeo said.
Still, there are questions about how quickly a deal can be reached, especially with the U.S. heading into the presidential election in November, and with the U.K. seeking to concurrently broker a new trading relationship with the EU. Pompeo later told LBC radio he doesn’t want to set a time frame for reaching an agreement -- but signaled he wants good progress this year.
‘Difficult Issues’
“It’ll take a little bit, but I hope by the end of this year or the late summer, early fall, we have a substantial piece of progress and we can begin to close out the most difficult issues,” he said.
With the British public opposed to U.S. involvement in the National Health Service, Pompeo said: “I can categorically say that we’re not interested in it.” But asked about another contentious issue in the U.K. -- the washing of chicken with chlorine -- Pompeo said he’s “sure” negotiations on agriculture will be difficult.
“I think there will be real contentious issues around agriculture,” Pompeo said. “We need to make sure that we don’t use food safety as a ruse to try and protect a particular industry.”
In the Policy Exchange event, Raab and Pompeo were asked if they would accept sectoral deals if an overarching trade agreement can’t be done in time. The U.K. minister replied: “I don’t think we should go into this thinking a deal can’t be done.”
“There’s huge alignment in terms of our economic interests,” Raab said. “Of course there are going to be difficult issues. The British negotiators are going to be rigorous and robust, we know that the Americans are, but I think we should go into this with some optimism, some ambition, some can-do spirit, and I do think a deal can be done.”
Answering the same question after Raab, Pompeo kept it brief.
“I concur,” he said.
To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net
To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Stuart Biggs, Mark Williams
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