US trade deal remains a key priority for UK government

Significance However, the departure of former US President Donald Trump -- who was an enthusiastic supporter of Brexit and UK Prime Minister Boris Johnson -- has made this harder to achieve. Impacts Johnson will consider holding a snap election in 2023 to capitalise on the successful vaccination campaign and economic reopening. The failure to conclude a US-UK FTA would increase the prospects of an EU-UK veterinary agreement. Without a UK-EU veterinary agreement, the chances of persistent disruption on trade between Great Britain and Northern Ireland will grow.

Significance The extension permits retailers in Northern Ireland to continue importing products such as mince, sausages and pies from Great Britain until September 30. It is designed to ease implementation of the Northern Ireland protocol (NIP) at a time of heightened tension between the EU and United Kingdom over Northern Ireland. Impacts London could announce further unilateral action concerning the NIP before the parliamentary recess on July 22. Future unilateral action by the UK government in relation to the NIP’s implementation risks undermining the EU-UK trade deal. Though unlikely, early elections in Northern Ireland this year would further complicate the implementation of the protocol.


Significance Canada’s Liberal Prime Minister Justin Trudeau is preparing to welcome a more predictable and stable partner in Biden than outgoing Republican President Donald Trump. However, Biden is also expected quickly to cancel the Keystone XL pipeline, cutting another lifeline to Canada’s oil industry and creating some strain in Canada-US ties. Impacts Improved Canada-US ties will persist even if Trudeau loses the next federal election to Conservative Erin O’Toole. Canada will re-engage militarily with UN peacekeeping and NATO deployments. Trudeau will encourage Biden to end US prosecution of Meng Wanzhou, allowing Canada to release her; Biden may agree. Canada’s border with the United States will open in stages as COVID-19 recedes. Ottawa will push Biden to end ‘Buy American’ procurement policies, with little success.


Significance As many as a dozen lockdown parties are now alleged to have been held at Downing Street, significantly damaging Johnson’s support among the public and his Conservative Party. His position as party leader and prime minister is gravely threatened. Impacts Johnson’s domestic troubles, coupled with rising economic concerns, increase the chance of an agreement with the EU over Northern Ireland. Disillusionment with Johnson, opposition to net-zero and culture wars open the door for Nigel Farage’s Reform Party to revive its appeal. Rising inflation threatens to undermine consumer confidence and slow the economic recovery over the coming year.


Significance The Pakistan Muslim League-Nawaz (PML-N)’s five-year term ended on May 31. PML-N President Shehbaz Sharif faces a tough fight to become prime minister, with the main challenge set to come from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and further opposition provided by Bilawal Bhutto Zardari’s Pakistan Peoples Party (PPP). Impacts With Khan as prime minister, the military would likely have free rein to pursue an anti-India foreign policy. Khan would step up his criticisms of the war in Afghanistan and likely have a difficult relationship with US President Donald Trump. Pakistan under any government will pursue balanced diplomacy in the Middle East, seeking good ties with both Saudi Arabia and Iran.


Significance This move came as a surprise, as the prime minister had previously repeatedly denied that she was even contemplating such a step. Impacts A larger Conservative majority could leave May less dependent on backbench hardcore Brexiteers, possibly giving her more flexibility. Delaying the following general election until 2022 buys May time for a transitional agreement and a cliff-edge exit becomes less likely. The prospect of a Conservative UK government ruling with an increased majority till 2022 will bolster support for Scottish independence. The election will delay the start of the Brexit negotiations by one month.


Significance For the first time, there is a sustained increase in support for Scottish independence. The main reasons include dislike of UK Prime Minister Boris Johnson and his cabinet north of the border, the UK government’s pursuit of a ‘hard’ Brexit and questions about its response to the COVID-19 pandemic. Impacts Soaring Scottish unemployment when the UK furlough schemes end would undermine London’s claim to be protecting Scottish jobs. Rising support for Scottish independence could prompt the UK government to seek a closer trade agreement with the EU. The UK government will be unable to conceal the economic impacts of Brexit under the economic fallout of COVID-19. A Scottish vote for independence would put huge pressure on the UK government to resign and call early elections.


Subject Prospects for India in 2017. Significance As 2017 approaches, both hope and uncertainty prevail regarding India's economic prospects. Politically, the opposition to Prime Minister Narendra Modi's Bharatiya Janata Party (BJP)-led government is still ineffective, but important regional elections will test the BJP next year. India's diplomatic outreach will be complicated not least by the election of Donald Trump as the next US president.


Subject US-Vietnam relations. Significance Vietnam’s Prime Minister Nguyen Xuan Phuc met US President Donald Trump on May 31 in Washington, during a two-day visit in which he also conferred with the US business community and Vietnamese diaspora. Phuc’s visit is part of Hanoi’s plan to forge a relationship with the new US administration. The prime minister sought the continuance of the Obama-era US-Vietnam Comprehensive Partnership and to look ahead to the APEC meeting in Da Nang in November, which Trump will attend. Impacts Even without the twelve-member TPP, Vietnam will improve its intellectual property and labour laws. Increased US security support may see more frictions over maritime issues between Beijing and a more confident Hanoi. Trump’s wish to protect US borders will cause Hanoi concern that Vietnamese student numbers in the United States will fall. If so, this could hit knowledge and technology transfers from the United States to Vietnam.


Subject Military influence in Pakistan. Significance Army Chief Qamar Javed Bajwa earlier this month visited Beijing to reassure China about Pakistan’s commitment to the China-Pakistan Economic Corridor (CPEC). Pakistan’s military strongly influences the country’s policy. It is widely believed that Prime Minister Imran Khan had the military’s support in winning the July general election. Impacts Any meeting between Khan and US President Donald Trump is likely to be uncomfortable, further straining Pakistan-US ties. Pakistan will strongly defend its commitment to CPEC. The state will increase harassment of political opponents and civil society critics.


Significance Along with Mexico’s leader President Enrique Pena Nieto, whose term ends on December 1, the new US-Mexico-Canada Agreement (USMCA) will be signed by US President Donald Trump and Canadian Prime Minister Justin Trudeau in November, though it then needs ratifying in the three countries. Canada was the last holdout after US and Mexican negotiators reached a deal in August; Canada made concessions on dairy, copyright terms and auto parts rules to safeguard Ottawa’s priorities in the USMCA, notably independent dispute resolution on anti-dumping and countervailing duties. Impacts Canadian pharm firms face increased market competition from US firms newly protected by additional patent protections. Canada’s public healthcare system faces new costs from biological and other new medicines; system reform calls could grow. Canadian dairy will lose some market share to US products but survive (most of the Supply Management system remains). Canadian retailers will see some small revenue slumps as more Canadians use lower duties for US shopping.


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