I have always read reports from the Institute of Economic Affairs with some interest, even if I rarely agree with them. I was disappointed by the report released last Monday about the wonders of a trade agreement with the USA. It covers little more than the sort of objection one might find discussed in the Daily Mail: US firms will invade the NHS, they’ll want private justice and they’ll lower our health standards.
Those objections are all real, but there are other concerns, too. The USA is a federation of states each of which has its own laws. The States of the USA strictly license occupations, and 30% of all of its employment is restricted by this kind of licence. A licence to operate in the USA is not a licence to operate in each state – as universities, bankers, and even the likes of florists and barbers can attest. This is critically important for services; and services, not manufacturing or agriculture, now represent the core of the UK economy.
TThe UK is not without its own restrictions of course; nearly 20% of all UK occupations are now restricted. My source for that statement is the Institute of Economic Affairs, in a comment they released on Thursday. But the UK is a unitary state with its own unified market, so one licence generally serves for all the UK. To get parity, UK services would have to negotiate not just with the US federal government, but separately with each of the 50 states. Any trade agreement with the USA will be one-sided.