Trump's 'massive' U.S.-UK trade deal faces big hurdles

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Trump's 'massive' U.S.-UK trade deal faces big hurdles

By David Lawder

 

FILE PHOTO: Britain's Prime Minister Boris Johnson welcomes U.S. President Donald Trump at the NATO leaders summit in Watford, Britain December 4, 2019. REUTERS/Peter Nicholls/File Photo

 

WASHINGTON (Reuters) - Britain is the United States' closest ally but their long friendship may be sorely tested as the two countries try to forge a new trade agreement after Britain's exit from the European Union.

 

U.S. Treasury Secretary Steven Mnuchin said on Saturday in London that he was optimistic that a bilateral deal with Britain could be reached as soon as this year.

 

But Mnuchin gave up no ground after a second meeting with his UK counterpart, Sajid Javid. Javid has insisted that Britain will proceed with a unilateral digital services tax, despite a U.S. threat to levy retaliatory tariffs on British-made autos.

 

Mnuchin told reporters after Saturday's meeting that such taxes would discriminate against big U.S. tech companies like Alphabet Inc's Google, Apple Inc, Facebook Inc and Amazon.com.

 

The UK Treasury declined to comment on the private meeting.

 

The divide highlights the challenges ahead as the Trump administration seeks a new bilateral agreement with Britain, part of a broader push to rebalance relations with nearly all its major trading partners.

 

The stakes are high - British Prime Minister Boris Johnson has pegged the trade deal with United States as a way to ease the pain of breaking with Europe, Britain's largest trade partner. U.S. President Donald Trump, has promised a "massive" trade deal to support Brexit, the product of a populist movement similar to his "America First" agenda.

 

The goodwill and special relationship the two countries have enjoyed for decades may not count for much, experts say.

 

"Trump is not going to be doing Johnson any favors," said Amanda Sloat, a senior fellow with the Brookings Institution in Washington. "He's not going to give him a trade deal without major concessions."

 

Even before the digital tax issue arose, the Trump administration threatened to tax foreign car imports, which could hit British-made Jaguar, Land Rover, Mini, and Honda Civic hatchback cars.

 

Stiff U.S. trade demands include increased access for U.S. farm goods, concessions that will be difficult for Britain's entrenched natural food culture to swallow.

 

The United States also wants Britain to change the way its National Health Service prices drugs and allow in more U.S. pharmaceuticals, which could prove politically unpopular for Johnson's government.

 

Washington's demand that London block Chinese telecoms equipment maker Huawei Technologies Co Ltd for national security reasons could also cloud talks.

 

Reaching a meaningful deal will be "exceedingly difficult," said Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington. "There are very deep-rooted issues on which the United States and the UK are diametrically opposed."

 

Differences over those and other issues meant three years of U.S.-European Union trade negotiations ran aground during the Obama administration.

 

CAR TARIFF THREAT

Tensions boiled over at the World Economic Forum in Davos, Switzerland.

 

Mnuchin raised the threat of car tariffs after Javid's pledge to proceed with the digital services tax. If officials "just arbitrarily put taxes on our digital companies, we'll consider arbitrarily putting taxes on car companies," Mnuchin said.

 

British officials struck back.

 

"Let me be absolutely clear, UK tax policy is a matter for the UK chancellor, it's not a matter for the U.S., it's not a matter for the EU, it's not a matter for anybody else," Trade Minister Liz Truss said.

 

Britain exported $11 billion in passenger cars, engines, tires and other automotive components to the United States in 2018, the largest sector in a total of $127 billion in exports.

 

Eliminating the existing 2.5% U.S. car tariff and averting future auto tariffs will be a high priority for Britain in the talks.

 

Britain will also seek greater access to U.S. state and local public procurement contracts, and services such as U.S. coastal shipping. But those are areas governed by U.S. laws, and a trade agreement may not apply.

 

CHLORINE CHICKEN

The U.S. negotiating objectives published https://ustr.gov/sites/default/files/Summary_of_U.S.-UK_Negotiating_Objectives.pdf last year by the U.S. Trade Representative's (USTR) office seek to grow U.S. farm exports to Britain.

 

That includes the removal of non-tariff barriers, such as restrictions on chlorine-treated chicken, genetically modified crops and hormone-treated meat. Such products are common in the United States but shunned in Britain.

 

The United States is also pressing for full market access for U.S. pharmaceutical products and medical devices. That would require changes to Britain's NHS pricing restrictions, and could increase the cost of drugs in Britain.

 

In comments https://www.phrma.org/-/media/Project/PhRMA/PhRMA-Org/PhRMA-Org/PDF/PhRMA-Comments-on-US-UK-Trade-Agreement.pdf to the USTR last year, a U.S. pharmaceutical trade group argued that the NHS' cost controls for pricing "innovative" drugs did not "recognize their value to patients and society."

 

That is not likely to sway British officials. "The NHS is a religion in the UK. That's where the real red line is," said Sam Lowe, a senior research fellow at the Centre for European Reform in London. "If the U.S. is saying: 'Pay more for medicine,' that's quite difficult to get past the Treasury and the taxpayers."

 

Some analysts say Washington's best bet is a limited "Phase 1" deal with Britain, as was recently signed with China. Such an agreement would not likely require approval by the U.S. Congress.

 

That would provide short-term political victories for both Britain's Johnson and Trump, said Lowe. Trump is seeking re-election in November.

 

A mini-deal could focus on financial services and convergence on some product and services regulations. It would fall far short of a deal that provides an alternative to Britain's unfettered access to the European Union that both Trump and Johnson have promised.

 

(Reporting by David Lawder; Additional reporting by William Schomberg and Andrea Shalal; Editing by Heather Timmons and Peter Cooney)

 

-- © Copyright Reuters 2020-01-28

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[bannork]

The 'special relationship' will sour and the UK will have to go back to the EU, begging to be let in, the silly fools.

[Tug]

I’m sad to see the U.K. in such a poor bargaining position when dealing with trump my advice would be to wait for change in 2020 if possible or offer Donald some shiney gong to stoke his ego otherwise he will try to extort your country

[TopDeadSenter]

As so neatly illustrated by the 2 above posters, the only real hurdle to UK/US trade deals are the left. These people would dearly love to see the UK's economy trashed so they could turn round and say, see told you leaving the EU would ruin us. Thankfully the UK conservative govt are not (all) complete fools and I am confident that a deal can be thrashed out to benefit both sides, this would also stick 2 fingers up to the EU naysayers.

 After that, perhaps another commemorative coin could be minted. After seeing how much the new Brexit 50p piece triggered them, well worth the effort!

[sammieuk1]

Fear not Boris has everything under control we know that because he said so a lot????

[canopus1969]

24 minutes ago, bannork said:

The 'special relationship' will sour and the UK will have to go back to the EU, begging to be let in, the silly fools.

Sounds like you live in cloud cuckoo land – or should I say Pattaya

[bannork]

3 minutes ago, canopus1969 said:

Sounds like you live in cloud cuckoo land – or should I say Pattaya

I wouldn't be seen dead in Pattaya unless the hearse had done a 600 km detour.

It's all going to end in tears for the 'oven made', ' 30 free trade deals ready to sign the day after we leave the EU'.

And now the Japanese have said no trade deal with the UK until the trade deals between the UK and EU are settled first.

Get back to the EU, boys.

[Rookiescot]

But surely the US needs us more than we need them?

 

Tis but a scratch anyway.

Just stay focused on the important stuff. Blue passports.

[evadgib]

8 minutes ago, bannork said:

I wouldn't be seen dead in Pattaya unless the hearse had done a 600 km detour.

It's all going to end in tears for the 'oven made', ' 30 free trade deals ready to sign the day after we leave the EU'.

And now the Japanese have said no trade deal with the UK until the trade deals between the UK and EU are settled first.

Get back to the EU, boys.

We're still leaving on Friday and no amount of whinging will change it.

[bannork]

4 minutes ago, evadgib said:

We're still leaving on Friday and no amount of whinging will change it.

Not whinging, simply referring to news. 

 

 

 

 

[Chomper Higgot]

2 minutes ago, evadgib said:

We're still leaving on Friday and no amount of whinging will change it.

And no amount of ‘gloat dancing’ will deliver a trade deal.

 

Bridges burned and Trump’s America eagerly waiting to strip the UK of whatever the US lobbyists want.

[Chomper Higgot]

26 minutes ago, TopDeadSenter said:

As so neatly illustrated by the 2 above posters, the only real hurdle to UK/US trade deals are the left. These people would dearly love to see the UK's economy trashed so they could turn round and say, see told you leaving the EU would ruin us. Thankfully the UK conservative govt are not (all) complete fools and I am confident that a deal can be thrashed out to benefit both sides, this would also stick 2 fingers up to the EU naysayers.

 After that, perhaps another commemorative coin could be minted. After seeing how much the new Brexit 50p piece triggered them, well worth the effort!

The only people with any impact on the outcome of the UK/US trade ‘negotiations’ are the people doing the negotiations, non of whom are members of TVF, Remainers or Brexit Naysayers.

 

You’ll be told what deal UK’s pro-Brexit PM and Pro-Brexit negotiating team handed the US once the ‘deal’ has been done.

 

I do however understand your point, it’s always somebody else’s fault.

[Tug]

28 minutes ago, TopDeadSenter said:

As so neatly illustrated by the 2 above posters, the only real hurdle to UK/US trade deals are the left. These people would dearly love to see the UK's economy trashed so they could turn round and say, see told you leaving the EU would ruin us. Thankfully the UK conservative govt are not (all) complete fools and I am confident that a deal can be thrashed out to benefit both sides, this would also stick 2 fingers up to the EU naysayers.

 After that, perhaps another commemorative coin could be minted. After seeing how much the new Brexit 50p piece triggered them, well worth the effort!

You assume a lot just because I think trump is unfit to be potus doesent make me a lefty and to assume I wish the U.K. harm is straight up insulting trump has proven time and time again he won’t give up anything unless he gets something in return be careful dealing with him

[Dumbastheycome]

I wonder if the people of the UK are actually aware of the level of contamination and adulteration of US food products? Under EU regulations the UK was party to the ban on the use of  or import of food containing a  variety of known or suspect chemicals. US  citizens  may believe in the FDA  but 85% of processed foods produced in the US contain GMO's which the FDA does not require any safety testing on !

Good luck then to the UK if they are so willing to be reverse colonized  by the US.

 

[Maitdjai]

48 minutes ago, Tug said:

You assume a lot just because I think trump is unfit to be potus doesent make me a lefty and to assume I wish the U.K. harm is straight up insulting trump has proven time and time again he won’t give up anything unless he gets something in return be careful dealing with him

That is, what is making "deals" about!

Negotiate, like its your "own" money.

Not only "harmonizing" on the tax payers cost.

[Maitdjai]

1 hour ago, bannork said:

I wouldn't be seen dead in Pattaya unless the hearse had done a 600 km detour.

It's all going to end in tears for the 'oven made', ' 30 free trade deals ready to sign the day after we leave the EU'.

And now the Japanese have said no trade deal with the UK until the trade deals between the UK and EU are settled first.

Get back to the EU, boys.

Still

"Cloud-Cookoo-Land". More or less, it doesn't matter where exactly.

But I think that is one of the reasons to stay here. ????

[TheDark]

23 minutes ago, Dumbastheycome said:

I wonder if the people of the UK are actually aware of the level of contamination and adulteration of US food products? Under EU regulations the UK was party to the ban on the use of  or import of food containing a  variety of known or suspect chemicals. US  citizens  may believe in the FDA  but 85% of processed foods produced in the US contain GMO's which the FDA does not require any safety testing on !

Good luck then to the UK if they are so willing to be reverse colonized  by the US.

 

GMO's are really not that big of a deal when it comes to safe consuming of the food. The bigger risk of GMO's is that these modified plants can be made resistant to some weed killers etc. which can kill other crops. This can lead to monopolies of food farming. 

 

There are also other, more serious problems with the food in USA. Using lots of antibiotics and especially hormones to make chickens, big and cows to grow larger with more muscles. 

[RuamRudy]

2 hours ago, TopDeadSenter said:

As so neatly illustrated by the 2 above posters, the only real hurdle to UK/US trade deals are the left. These people would dearly love to see the UK's economy trashed so they could turn round and say, see told you leaving the EU would ruin us. Thankfully the UK conservative govt are not (all) complete fools and I am confident that a deal can be thrashed out to benefit both sides, this would also stick 2 fingers up to the EU naysayers.

 After that, perhaps another commemorative coin could be minted. After seeing how much the new Brexit 50p piece triggered them, well worth the effort!

In what way are these posters, or anyone else who recognises that Brexit is a monumental act of folly, hindering talks? They are not in the room negotiating. Are our negotiators so delicate that negative comment will impact their performance? Or is this just another attempt to shift the blame for the forthcoming disaster from those who fully deserve it?

[evadgib]

27 minutes ago, RuamRudy said:

In what way are these posters, or anyone else who recognises that Brexit is a monumental act of folly, hindering talks? They are not in the room negotiating. Are our negotiators so delicate that negative comment will impact their performance? Or is this just another attempt to shift the blame for the forthcoming disaster from those who fully deserve it?

Wot disaster?

[RuamRudy]

23 minutes ago, evadgib said:

Wot disaster?

A continuation of the slide which is already costing families on average £870 a year. 

[samran]

Whatever way you spin it, giving up seamless access of products, capital labour and services to one market of 400+ million - and replacing it with patchy piecemeal access to another market of 400+ million is hardly ‘win’ for anyone, except the US...

[samran]

5 minutes ago, RuamRudy said:

A continuation of the slide which is already costing families on average £870 a year. 

Is that the cost of the new blue passports? 

[RuamRudy]

9 minutes ago, samran said:

Is that the cost of the new blue passports? 

No, they are priceless, or so some would have us believe. 

[bannork]

2 hours ago, Maitdjai said:

Still

"Cloud-Cookoo-Land". More or less, it doesn't matter where exactly.

But I think that is one of the reasons to stay here. ????

Funnily enough, one of the reasons I prefer living in Thailand to life in the UK is how much more real life seems here. No work, no food. You want to sell street food? Start tomorrow.

The endless regulations of English life, the tidy countryside and cute Cotswold cottages, all conspired to give me the sense I wasn't living in a real land. Just a number in an over-restrictive environment.

[Eric Loh]

Note to Boris. Wait till after 2020 election and negotiate with a more reasonable new POTUS. You will thank me for that advise. 

[roo860]

24 minutes ago, bannork said:

Funnily enough, one of the reasons I prefer living in Thailand to life in the UK is how much more real life seems here. No work, no food. You want to sell street food? Start tomorrow.

The endless regulations of English life, the tidy countryside and cute Cotswold cottages, all conspired to give me the sense I wasn't living in a real land. Just a number in an over-restrictive environment.

Sell street food, no problem, just make sure all your waste water etc gets poured into the nearest drain or gutter, adds to the aroma.

????????

The UK doesn't need this unregulated behaviour. 

Edited January 28, 2020 by roo860

[puck2]

4 hours ago, evadgib said:

We're still leaving on Friday and no amount of whinging will change it.

Now "no amount of whinging", but wait for the time after the year 2020. Especially, if no deal.

Edited January 28, 2020 by puck2

[zydeco]

Why are the people in the UK worried? Trump folds on everything. Surrendered to Mexico and Canada. Surrendered to Japan. Surrendered to Germany on auto tariffs earlier. Surrendered to China. He'll surrender to you, too.

[evadgib]

1 hour ago, puck2 said:

Now "no amount of whinging", but wait for the time after the year 2020. Especially, if no deal.

There's a Uri Geller collective in these threads with voodoo dolls full of pins on their computer desks hoping and praying that UK will fail.

Take a good look at yourselves and grown up.

Edited January 28, 2020 by evadgib

[evadgib]

3 hours ago, RuamRudy said:

A continuation of the slide which is already costing families on average £870 a year. 

Caused by Bercow & co & ending on Friday.