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LONDON — Rushing into a “politically attractive” trade deal with the US risks exposing British firms to hostile takeovers from cash-rich, “predatory” cash-rich American firms.
That is according to Adam Marshall, the influential director general of the British Chambers of Commerce, a lobby group which represents 92,000 UK businesses.
Writing in the Observer on Sunday, he warned against striking a quick, comprehensive free trade agreement (FTA) with the US.
He said the UK should instead pursue “quick wins” which tackle some of the practical issues facing UK-US trade after Brexit.
US President Donald Trump spoke of a “big” and “powerful” deal between the two countries at the recent G20 Summit earlier in July, a topic Prime Minister Theresa May has repeatedly pushed him on.
Marshall wrote: “I am distinctly uneasy about this prospect [of an FTA], and so, too, are many I speak to in business across the UK.”
“While a comprehensive UK-US free trade deal could be a long-term aspiration, it’s not at the front of the queue for businesses – for whom other, more immediate priorities take precedence. It is a stark fact that the US has many of the world’s toughest and most seasoned trade negotiators, whereas the UK has ceded its policy and know-how to the European commission for decades.”
He said another consequence of a speedy FTA could be “predatory purchasing of UK firms by bigger, cash-rich US competitors.”
“We have seen cases where UK firms were hollowed out and asset-stripped by overseas buyers. Indeed, in more limited circumstances, UK firms have done the same in the US and other markets. But the truth is that under a US-UK deal, this less-welcome variant of mergers and acquisitions activity would probably be to the UK’s long-term disadvantage,” he said.
He also said Britain should prioritise a free-trade deal with the EU as the March 2019 deadline for Britain’s EU exit approaches.
The warning came as International Trade Secretary Liam Fox travelled to Washington to begin preliminary talks over a trade deal with US negotiators, as he became embroiled in a bizarre row over chlorinated chicken with other members of the cabinet after he suggested the UK would import it after Brexit, something currently banned by EU law.