Rachel Reeves, the UK Shadow Chancellor, has put down a marker. She argues that bolstering EU trade relations needs to take priority over any current negotiations with the US. She even claimed this in the wake of her recent visits to G20 meetings. She highlighted the importance of providing stability to the UK’s economic environment in light of uncertain global trading conditions.
Reeves said that continuing uncertainty over the future of the UK’s trade negotiations was making it hard to attract investment into the UK economy. She concluded with the observation that businesses want to operate in stable, predictable environments. Without enforceable agreements in place, critical investment decisions are left hanging. Though she understands the importance of US-UK relations, her priority appears to be strengthening ties with Europe that are at the moment too weak.
On Friday, Reeves is supposed to meet with her US counterpart in Washington. This year’s meeting comes at an especially important time, as conversations around tariffs and trade barriers are front and center. Reeves appreciates the concerns President Trump raised about tariffs. He understands how pernicious these tariffs are to our bilateral trade. In so doing, she hopes to tackle these domestic concerns, all the while keeping a firm focus on the larger European picture.
Reeves has been busy deepening relationships with her European and Canadian counterparts. She has been on the frontlines to remove the trade barriers that lie in their path. She is right to acknowledge that we need to work with these countries to ensure they provide a freer, fairer and more open trading environment for us all. Her campaign is certainly the sign of a strategic turn to Europe—which is good news considering recent headwinds for the UK economy.
Throughout discussions at G20 meetings this week, Reeves said what should be a relatively easy conversation around the table has been marred. These challenges are the product of simply conflicting national interests and priorities among involved nations. In spite of these challenges, she is determined to continue efforts to build consensus and support cooperative solutions.
Reeves also, impressively, drew an explicit parallel between the political landscapes of the US and UK. Both administrations have come to power in the context of deep voter discontent with the state of the economy. Yet this group experience has a powerful ability to create a conversation that matters. Perhaps it best exposes the complicated nature of negotiating the world’s most broad-reaching trade agreements.
As we talked about possible outcomes of the impending negotiations, Reeves made one very important point. He added that there would be no party if the UK manages to win such a deal. She emphasized that many other countries would still be adversely affected by any agreements reached, indicating a broader responsibility in international trade considerations.
In a notable reversal, Reeves suggested on Monday that he is open to a major concession. During the current negotiations for a UK-US trade deal, the UK is offering to cut tariffs on US car imports from 10% to only 2.5%. This proposal could potentially ease tensions and pave the way for more robust trade relations between the two nations, though it raises questions about its implications for domestic industries.
Looking ahead, Reeves is expecting a big EU-US summit in May to launch these negotiations. Ms. McGuinness sees this meeting as a chance to “reset” the relationship between the UK and the EU after Brexit. Her willingness to engage proactively demonstrates her commitment to a new approach to restoring trust and cooperation on trade issues. She thinks this commitment is absolutely vital if the UK economy is to prosper in the future.