Trade relationships with the US ripe for the taking post-Brexit

In a workshop in West Virginia’s Appalachian Mountains there is an unlikely source of common ground for Donald Trump and Hillary Clinton.

From this humble setting, high-end cabinets are crafted for the luxury market by the employees of Christopher Peacock, a Briton who moved to the US in 1987.

The eponymous carpentry firm has supplied cabinets for 13 rooms of the Clintons’ private residence in Chappaqua, New York State, while the company has also worked with Trump on a penthouse project in New York City.

“The Clintons were very engaged in the process and enjoyed it tremendously. The experience with Trump was not quite the same,” says Peacock diplomatically.

Following the Brexit vote, the British government will be keen to grease the wheels for a bilateral trade deal with whoever wins the US presidency on 8 November. The Department for International Trade has already revealed plans to open three new trade offices in the US for those seeking to take advantage of its opportunities.

Britain and the US already have one of the strongest trade and investment relationships in the world estimated to be worth more than $1tn every year.

While any bilateral trade agreement between the US and UK could be politically charged if it resembles the controversial Transatlantic Trade and Investment Partnership (TTIP), proponents of the scheme claimed it would provide a boost to small business in particular by loosening regulations.

A TTIP agreement between the US and the EU, on the other hand, may now never see the light of day due to concerns over provisions such as the “investor-state dispute settlement”, which would allow companies to sue foreign governments for compensation claiming unfair treatment if they lose a government contract.

Jeffries Briginshaw, chief executive at BritishAmerican Business, expects to see an increase in trade between the UK and US if a “new and imaginative bilateral economic agreement” is struck.

“With the majority of SMEs in both countries not currently trading internationally, this is a huge untapped market providing massive scope to strengthen and deepen trade ties,” says Briginshaw. “The UK and US enjoy a strong trading relationship. However, there are still many barriers to trade that affect SMEs disproportionately when compared to larger companies.”

Briginshaw argues that “removing these prohibitive barriers would greatly assist SMEs looking to expand overseas”.

On the whole, Peacock has found US local government to be amenable to doing whatever it can to make his business succeed. West Virginia itself has its own small business department in order to foster entrepreneurialism in the state.

He says the state has been proactive in making his business a success ever since he approached it in the 1990s for funding to take over the Appalachian wood-making facility that was threatened with closure.

“For us the conversation flows freely throughout between each department and they are small enough to be approachable and not get stuck in the mud with bureaucracy,” says Peacock.

“The states are pretty autonomous in terms of being able to do their own trade without federal approval,” says Earl Ray Tomblin, governor of West Virginia, who was recently in the UK on a trade delegation. “We as a state can do business with basically any country that is not at war with the United States.”

Tomblin foresees that trade between local US businesses and the UK would continue post-Brexit, but that multinationals might be affected. “We have a lot of small businesses in West Virginia that export to the UK and I think those relationships will probably not see any long-term effect [from Brexit]. They will still be trading, buying and selling. Maybe with some multinationals who are shipping through the UK to the continent – there may be some different relationships there.

“[But] I can see where leaving the single market will be a detriment to the UK simply because there are going to be certain tariffs that raise the price on British products,” he adds.

Robin Bingeman is managing director at UK-based email archiving firm Cryoserver, which exports servers around the world and derives a fifth of its turnover from North America. He suspects there will still be opportunities to trade with the US, regardless of the time it takes to hash out a trade deal.

“America is a good neighbour of ours and they do like British technology,” he says. “I think from the way we are trading with North American organisations (mainly IT departments), they probably don’t really care about regulations or trade agreements – they are just interested in meeting a [client’s] requirement.”

Bingeman has not experienced repercussions from US partners after the British referendum but says he has noticed a difference with European firms.

“I feel that orders I may have expected to receive might have been delayed because there is some uncertainty. I have found this with a number of different territories throughout Europe.”

Peacock says he is “excited” by Brexit and believes it could ultimately be beneficial for the UK. “I think it is going to be tough and painful for a while,” he adds. “There will be a natural shake up of things [which] may be daunting for everybody because it is the unknown, but change is good ... [and small firms can] metamorphose into what we need to be to take advantage of the moment.”

For those with the wherewithal, Briginshaw says, the opportunities are there.

“Our trading relationship will largely depend on the shape and scope of a future trade deal and the latent ambition of UK entrepreneurs,” he says.

Those UK entrepreneurs that untap their potential could find themselves emulating Peacock by counting the future president of the US among their clients.

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