UK-US trade talks begin today. I think it's a mistake for the UK to start negotiating with the US at this stage. Quick thread on why. 1/
Starting point is that potential gains from US deal are much smaller than costs of leaving the EU. Government's own analysis suggests an ambitious US deal would raise GDP by around 0.2% of GDP. Costs of Brexit are an order of magnitude higher. 2/
But does the cost of Brexit have any bearing on talks with the US? If a trade deal with the US woud benefit the UK economy, why is it a mistake to start talks? Two main reasons. 3/
Reason 1 - and this is the most important. Negotiations with the US and the EU cannot be separated. What market access concessions the UK can offer to the US will depend upon its relationship with the EU - and vice-versa. 4/
To give one prominent example. If the UK adopts US food standards, the EU will impose stricter controls on agricultural imports from the UK. And since more is at stake in EU talks, the UK should prioritise fixing its relations with the EU before negotiating with the US. 5/
Reason 2 - less important. Capacity constraints. The government has limited resources - expertise, money, attention. Right now, talks with the US are a distraction from dealing with Covid-19 and from UK-EU negotiations. 6/
I'm happy to be persuaded otherwise. And in most cases I think trade agreements are beneficial. But I've yet to see a convincing argument for why now is the right time to start talks with the US. End/
