'Britain has no leverage. Britain is desperate. Britain has nothing else': Trump will exploit the UK in trade talks, former US treasury secretary says

larry summersLarry SummersREUTERS/Hyungwon Kang

  • The United States will dominate the UK in trade talks, according to a former US treasury secretary.
  • A UK-UK trade deal would hugely favour the US because Brexit has left the UK in a "desperate" position, Larry Summers said on Tuesday.
  • "Britain has no leverage. Britain is desperate. Britain has nothing else," he told the BBC.
  • US President Donald Trump has promised to negotiate a trade deal that is unprecedented in scope.
  • Prime Minister Boris Johnson has prioritised a trade agreement with the US once the UK has left the EU.
  • Visit Business Insider's home page for more stories.

The United Kingdom will struggle to secure a trade agreement with the United States because Brexit will make it "desperate" and without "leverage," according to former US treasury secretary Larry Summers.

UK Foreign Secretary Dominic Raab will visit the US this week as part of efforts to lay the foundations for a wide-ranging trade agreement between the two countries once the UK has left the European Union.

Brexit-backing Members of Parliament - including Prime Minister Boris Johnson - argue that a free trade deal with the US can be one of the biggest benefits of leaving the EU. President Donald Trump has promised a trade deal that will be unprecedented in scope.

However, Summers - who served in senior positions during the administrations of both Bill Clinton and Barack Obama - said on Tuesday that the US would only agree to a deal that weighed heavily in its favour.

Read more: Remainer MPs are reportedly plotting to bring down Boris Johnson's government, install a 'unity' prime minister, and delay Brexit

"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," he told the BBC Radio 4's Today programme.

"The last thing you do is quit your job before you look for a new one," he said.

"In the same way that establishing absolutely as a matter of sacred principle that you're leaving Europe, has to be the worst way to give you leverage with any new potential partners."

Summers added: "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."

trump brexit trade deal foodReuters

The prospect of a comprehensive trade agreement with the US is strongly opposed by many MPs in Westminster.

There is concern that a deal would give US companies high levels of access to British agriculture, and flood UK markets with cheap goods that would undercut UK businesses and adhere to a lower set of safety standards. The Labour Party has claimed that a trade deal with the US would give private American companies access to the National Health Service.

Members of US Congress have also warned they will not approve any trade agreement that threatens the Good Friday Agreement and the open border between Northern Ireland and the Republic of Ireland.

Naomi Smith, CEO of pro-EU group Best For Britain, said: "This is the real reason Trump has been talking up a deal. He's no friend of Britain, he just knows Boris Johnson is a pushover and wants to take full advantage.

"Any post-Brexit trade deal with the US will risk our NHS. Trump has already said he wants it on the table, and Johnson doesn't like to make his American master angry.

"Stopping Brexit, and the weak position it has put us in, is the best way to protect our NHS."

Our Brexit Insider Facebook group is the best place for up-to-date news and analysis about Britain's departure from the EU, direct from Business Insider's political reporters. Join here.
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