Brexit: Boris Johnson ‘delusional’ to expect a favourable trade deal with US, says former treasury secretary
Obama’s economics adviser Larry Summers says decision to leave EU whatever the circumstances has robbed UK of any leverage in trade talks
Larry Summers, who served as director of the National Economic Council in Barack Obama’s administration, said that Boris Johnson’s “do or die” strategy of leaving the EU at the end of October, whatever the circumstances, had robbed the “desperate” UK of any leverage in future trade talks.
His comments came as foreign secretary Dominic Raab began a three-day tour of Canada, the US and Mexico in an effort to “fire up” the UK’s trade relationship with North America.
Mr Raab said he was hoping to ensure a “smooth transition” of trading relations with non-European states following Brexit, and move “quickly” to extensive new trade deals.
But Mr Summers told BBC Radio 4’s Today programme: “Look at it from America’s point of view: Britain has much less to give than Europe as a whole did, therefore less reason for the United States to make concessions. You make more concessions dealing with a wealthy man than you do dealing with a poor man.
“Second, Britain has no leverage. Britain is desperate. Britain has nothing else. It needs an agreement very soon. When you have a desperate partner, that’s when you strike the hardest bargain.
“The last thing you do is quit a job before you look for your new one. In the same way, establishing absolutely that, as a matter of sacred principle, you’re leaving Europe has to be the worst way to give you leverage with any new potential partners.”
Mr Summers said it was anyway “close to inconceivable” that the UK would be able to increase its trade with the US enough to make up for lost trade with the EU.
And he warned: “I’m not sure what Britain wants from the United States that it can plausibly imagine the United States will give.
“If Britain thinks that the American financial regulators who have great difficulty coming together on anything are going to come together to give greater permissions and less regulation of UK firms, I would call that belief close to delusional.”
However, Republican Senator Tom Cotton insisted Britain should be at the “front of the queue” for a trade deal, which could come within months of Brexit.
Mr Cotton, who organised a letter from 45 members of congress offering support to Mr Johnson, told Today: “Many of my colleagues in the congress would say that Great Britain should be in the front of the queue, given everything our nations have gone through together and given the benefits we could both reap from a free trade agreement.
“Obviously it wouldn’t be a matter of days or weeks for such negotiations, it might be months, but I would suspect it would be months not years.”
Brexit-backing former Tory leader Iain Duncan Smith dismissed Mr Summers’ comments as “a classic attempt ... to use Brexit for domestic point-scoring”.
“Forty-five Republican senators have signed a letter to the prime minister pledging to back a trade deal with Britain once we have left the EU,” said Mr Duncan Smith. “The president himself has expressed his enthusiasm for a UK-US deal.
“If, as Mr Summers suggests, we were only offered a bad deal by the US, we would not accept it. Trade deals must be mutually beneficial to be acceptable to both sides.
“The Democrats, fortunately, are not in control of US trade deals.”
Speaking ahead of his North American trip, Mr Raab said: “In my first fortnight as foreign secretary, I’m travelling east and west to underline that the UK is determined to strengthen our friendships with countries across the world and raise our international horizons.
“I’m determined that we fire up our economic relationships with non-European partners.
“That means working with them now to ensure a smooth transition of our trading arrangements after Brexit and means quickly moving to wide-ranging trade deals that boost business, lower prices for consumers and respect our high standards.
“I also want to build a stronger alliance to uphold international rule of law and tackle the issues that threaten our security, whether that’s Iran’s menacing behaviour or Russia’s destabilising actions in Europe, or the threat from terrorism and climate change.”