Such a goal, of course, is nevertheless unpalatable to many, both in the UK and in the EU, some of whom accused the PM of wanting to cherry pick the best bits of the single market and customs union without membership, and without a strong enough hand to gain such concessions. And the complexity of cross-border trade, especially in services, has prompted suggestions that negotiating new trade arrangements could take a lot longer than the two-year timetable available, which threatens a damaging ‘cliff-edge’ in March 2019. These concerns should not be dismissed out of hand.
However, while it is important to realistically assess the strength of the UK’s negotiating position, it is equally important to cast aside the declinist view that Britain is no more than a nation of shoppers, homeowners and bankers with no hope of standing alone. It might not be an economic superpower on the scale of the US, China or – in the European sphere – Germany, but nor is the UK an economic or intellectual backwater, and has much to offer the world – not least its consumers.
What the UK is, and always has been, is a trading nation, and Theresa May’s vision does not close the door to continued two-way – and tariff-free – trade with the EU, and of course beyond. This is also reflected in the UK’s markets, home to many companies large and small doing significant business in all corners of the globe. Their expansive zeal is likely to be undiminished even if politicians continue to squabble, although investors would do well to understand how exporters will cope with any restrictions on trading into the single market should those squabbles prove insoluble, including shifting their focus onto markets further afield.
One of these markets might be the US, and Mrs May did indeed invoke the idea that President Trump – as he will become on the day of publication – will put the UK at the front of the queue for a trade deal. We should also be careful of this notion. The US has long been naturally protectionist, even if the current hysteria suggests this is a uniquely Trumpian characteristic. Thus the idea that buying dollar earners as a great way to protect your portfolio from Brexit upheaval is in itself rather simplistic, and potentially damaging to your portfolio if the dollar weakens. Given Trump’s latest remarks on that subject, such a devaluation should not be ruled out.
