A possible trade deal is possible, but it depends on very skilful diplomacy as Britain weaves between the US, the EU and China. China will also have to take a firm break so that concessions to Britain, such as better access to British financial and legal services, will be worth it, while at home we will make it clear that an agreement with China will create tangible prosperity without compromising liberal values. An agreement in exchange for pressure on politicians or the press to avoid discussions on topics such as the importance of maintaining the independence of the judiciary and a free press in Hong Kong would generally be considered too high a price. Last week, Donald Trump and Liu He, China`s vice premier, signed the first phase of a new U.S.-China trade agreement. Discussions around the agreement have been painful, raising fears about the world`s involvement in a trade dispute between the two economic giants. The signing showed that there is a space for compromise and confrontation with China, but the negotiations show the difficulties encountered with the United States, which has adhered to economic nationalism, and a China whose markets are still limited in many important areas. The UK and THE EU are negotiating a trade deal that is expected to start on 1 January 2021, when the new UK-EU relationship will begin. Any trade agreement will aim to remove tariffs and remove other trade barriers that come into force. It will also cover both goods and services. At present, the government appears to be focusing on a trade agreement with the United States, with its potential effects on the pricing of NHS drugs or chlorinated chicken. But the United States has another priority: to slow the growth of the Chinese economy as much as possible, especially in areas such as technology. The new trade agreement between the United States, Canada and Mexico has a “poison pill” clause that would allow the United States to withdraw if one of the other two countries signs a trade agreement with a “non-market” economy such as China.
The United States is likely to seek a similar clause in an agreement between the United States and the United Kingdom. Few developed economies have a comprehensive free trade agreement with China, and those that do, such as Australia and Switzerland, generally have a specific product (minerals, special machines) that makes such an agreement attractive to Beijing. Instead, many countries have less comprehensive bilateral agreements that cover only certain areas. The EU and China have been discussing a comprehensive free trade agreement for years, but issues such as China`s infringement of intellectual property rights have slowed progress. The United Kingdom does not have an obvious sector that China considers a compelling utility for its own interests, so it is unlikely that an agreement will be reached quickly. Trade agreements also aim to remove quotas – limiting the amount of goods that can be traded.