ABSTRACT
This chapter examines the scope for a trade deal between China and the UK post-Brexit against the background of increasing bilateralism, including the Trump administration’s ‘unilateral bilateralism’, and it doubts about the prospects for ‘mega-deals’ of the type envisioned in the now defunct Trans-Pacific Partnership (TPP). To have economic meaning, an agreement between the two countries would have to go much beyond traditional trade issues touching on important political sensitivities. The timing will also be important – the UK would like to sign a deal with the EU before it concludes an agreement with China, as the former is unquestionably more important for China at this point in time. The UK would like to get stronger investor protection and better market access for financial services, while its main bargaining chip would be guaranteeing China ‘market economy’ status under the WTO rules. The UK could also hold out liberalisation of the visa regime, but this is unlikely to be politically possible. Perhaps an agreement is not necessary – the incentives to develop the economic relationship between the two countries were and still are strong on both sides. The greatest uncertainty may indeed be the attitude of the US administration. In one scenario a US move towards protectionism and nativism will seep into the China-UK bilateral relationship and undermine what the two countries set out to achieve, together and apart. In another, Trump’s ‘unilateral bilateralism’ and attempts to undermine the multilateral trade institutions will move China and the UK (and the EU) much closer together.
