In June of 2016, the United Kingdom voted to leave the European Union. For the last two years, British policymakers have sought to negotiate international agreements that could begin to replace their EU membership.

Last week, Mercatus scholar Daniel Griswold released “Leading the Way with a US-UK Free Trade Agreement,” a study that details one path forward: a US-UK free trade agreement (FTA). The United States and United Kingdom already have one of the closest international relationships in the world, with a common language, shared history, close cultural ties, military and intelligence sharing, and most relevantly, robust trade. In fact, the UK is the seventh-largest US trading partner and its top partner in services trade and foreign direct investment. An FTA could take advantage of this special relationship and strengthen the economies of both countries.

Both countries have already announced their intention to pursue an FTA, but the devil will be in the details once the two countries begin negotiating in earnest. Mr. Griswold outlines several goals that an ambitious, effective free trade deal would include:

• The elimination of tariffs on agricultural and manufacturing goods. While most goods are traded duty-free between the US and the EU, agricultural products are an exception, as are manufactured goods (especially cars and trucks). Both sides would stand to gain by zeroing out their tariffs.
• A reduction of nontariff barriers. In global trade, routine health and safety inspections are sometimes weaponized into protectionist barriers. The US and the UK can afford to lower excessively high standards for their food trade, for example, without danger to the public.
• Standardize financial services. The US and UK already enjoy a strong relationship in this area; an FTA should seek to make the two nations’ banking, insurance, and accounting industries even more accessible to one another.
• A free labor market. The FTA should allow workers from both countries easy access to one another’s labor markets, to allow qualified workers to find the job that best matches their skills and needs.
• An open invitation. The FTA should allow other nations who wish to freely trade with the US and UK to join the agreement.

To read more about the study, click here.