US takes tough line with UK on post-Brexit trade talks
The Trump administration has taken an aggressive posture towards the UK on post-Brexit trade talks, demanding greater access to the UK market for its agricultural products and guarantees that London would not manipulate its currency.
The office of the US trade representative, led by Robert Lighthizer, on Thursday released its “negotiating objectives” for a possible trade agreement with the UK, suggesting Britain is unlikely to get softer treatment than other US allies.
In the 18-page document, Mr Lighthizer’s office said it was seeking “comprehensive market access for US agricultural goods in the UK” through the reduction or elimination of tariffs, a request that has already soured Washington’s trade relations with the EU.
Furthermore, the US is looking for the UK to remove “unwarranted barriers” related to “sanitary and physiosanitary” standards in the farm industry. For years US agricultural groups have complained that European countries have unnecessarily limited American exports of meat and grains based on fears they are unsafe for consumers.
Access to the British agricultural market could end up being the most politically sensitive request made by the Trump administration. The EU has said it was not willing to include agriculture in its own trade negotiations with the US, given that it could trigger a big public backlash in a wide range of member states.
Other demands could also be highly problematic for London. On currency, the US wants to “ensure that the UK avoids manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage”. Currency matters have traditionally been excluded from trade negotiations, but the Trump administration has injected them into talks, including with China and Japan.
Another provision that could raise eyebrows would constrain the UK’s ability to secure a trade deal with a “non-market economy” — such as China — by creating a “mechanism to ensure transparency and take appropriate action”. This could allow the US to ditch its trade deal with the UK if it does not like the terms of any agreement London strikes with Beijing.
The tough US demands are only an opening gambit, but they highlight the difficulties the UK could face in negotiating a trade deal with Washington, in contrast to claims made by leading Brexit proponents that it would be a smooth exercise.
On Thursday a UK government spokesperson said negotiating an “ambitious free trade agreement” with the US was a priority and Washington’s move to publish its objectives “demonstrates their commitment to beginning talks as soon as possible”.
She added: “As part of our open and transparent approach to negotiations, we will publish our own negotiating objectives in due course.”
The US negotiating objectives for the UK deal are similar to the wish lists published in recent months by Mr Lighthizer’s office for talks with the EU and Japan.
On industrial goods, the US said it was aiming for “comprehensive duty-free access” and stronger “disciplines to address non-tariff barriers” from the UK.
In digital trade, which is rapidly expanding, the US wants “secure commitments not to impose customs duties on digital products”, such as software, music, video and ebooks, and “non-discriminatory treatment” of content.
In commercial partnerships, the US is asking the UK to “discourage politically motivated actions to boycott, divest from, and sanction Israel”.
What the US demands is more intrusive than the requirements of the EU single market without giving British industry unlimited access to the US market. Trump even wants a say on UK foreign policy. Trump is "taking back control."
Complying with US demands will make it impossible for the UK to have a close trade relationship with the EU.