Volkswacht Bodensee - UK faces trade balancing act with Trump, EU

Prime Minister Keir Starmer insists this is not the case and that Britain can have strong ties with the United States and the EU, its main trading partner despite fallout from Brexit.

"The idea that we must choose between our allies, that somehow we're with either America or Europe is plain wrong. I reject it utterly," Starmer said in a speech Monday that spelled out also the importance of maintaining close relationships with the pair on security.

"The national interest demands that we work with both," he added.

Since Starmer's Labour party won a general election five months ago, the prime minister has set out to repair tensions with the EU after Britain's exit from the bloc and more recently has sought to get close to Trump's team.

- 'Socialism v free enterprise' -

The UK "has to choose between the Europe economic model of more socialism and the US model which is more based on a free enterprise system", Trump advisor Stephen Moore told the BBC last month after the US election.

Moore went on to say that "Britain would be better off moving towards more of the American model of economic freedom and if that were the case, I think it would spur the Trump administration's willingness to do the free trade agreement with the UK".

Britain has needed to negotiate new trade deals following its 2016 referendum vote in favour of departing the European Union.

While it has secured a number of agreements, including with Australia, New Zealand and Singapore, a much sought-after trade deal with the United States remains elusive, while hopes of one with Canada faltered earlier this year.

A major stumbling block for a US deal is reluctance by the UK to open its borders to certain American agricultural products.

Britain and the EU have yet to be included in Trump's pledge to impose hefty tariffs on major trading partners as soon as his first day in office next month.

That has so far been reserved for China, Mexico and Canada, igniting worries about a vast trade war.

- Regulatory choice -

"The UK is going to be put in a position where they're going to have to make some pretty difficult decisions," noted Marco Forgione, director general of the Chartered Institute of Export & International Trade.

The UK must consider whether it chooses "deregulation, which undoubtedly will be the approach of the Trump administration" or "align with the EU which is taking a different route,... more around regulation and compliance, particularly around environmental issues", Forgione told AFP.

"Can the UK play both sides? Yes, but it's incredibly difficult and will take a huge amount of time," he concluded.

Britain's finance minister Rachel Reeves last month announced reforms to the country's financial sector in a bid to grow the nation's economy, including a plan to allow greater risk-taking.

Rather than a broad free-trade agreement with the US, companies see the prospect of sectorial deals between London and Washington.

According to a survey published Sunday, nearly half of Britons want Starmer to prioritise closer economic ties with the EU over a trade deal with Trump's administration.

BMG Research said 49 percent of people polled preferred the EU route compared with 28 percent in favour of a US agreement. The remainder either did not wish to express an opinion or had no preference.

"America will always be important to the UK," Fiorentino Izzo, business development manager at logistics company Cargo Partner, told AFP.

"But our biggest trading partner is the EU. If I have to choose I put Europe before the US."

P.Keller--VB