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Yet any US-UK deal would have to be approved by not just by the


White House and the Senate, but by the House of Representatives, too. Here, both the Democrat majority and Republican members – from Speaker Nancy Pelosi on down – have made it clear they will not approve any treaty if a UK-EU impasse results in the re-emergence of a hard border between Northern Ireland and the Republic of Ireland. Robert Bosch, senior fellow at the Center on the United States


and Europe at the Brookings Institution, says: “Although Trump has championed a free trade agreement, Johnson will confront an uncomfortable reality: if the UK deviates from EU economic rules, there will be more freedom to negotiate trade deals, yet greater need for intrusive customs checks on the Irish border. Congressional leaders have warned that a no-deal Brexit resulting in a hard border and destabilising the Northern Ireland peace process would jeopardise their support for a trade deal.” And the White House appears to have its own ‘red lines’ over a


deal. According to a report in the Daily Telegraph, the administration has informed Downing Street that no agreement will be possible if the UK presses ahead with its proposed Digital Services Tax: a two per cent levy on large multinational – and overwhelmingly American – companies that avoid tax in Britain by funnelling revenues through more favourable tax regimes overseas.


CONCERNS RAISED OVER US TRADE OBJECTIVES Meanwhile, US trade representatives have set out ambitious objectives for any agreement, including slashing tariff and non-tariff barriers on food and decreasing regulatory divergence, prompting concerns in the UK that these could allow chlorinated chicken, genetically-modified crops and hormone-treated beef into the UK – something currently outlawed in Europe, although there is a body of scientific opinion that says health fears over US agriculture products are overstated. Additionally, Woody Johnson, the American ambassador in


London, threw his spanner in the works recently when he said the National Health Service (NHS) would be “on the table” in any trade negotiations, by allowing American companies to bid for contracts in the UK public sector. Much, of course, could depend on the knock-on effects of any deal


the UK manages to reach with the EU after Brexit. Were London and Brussels able to overcome their differences on issues on such as the Irish border and enter into a loose form of customs union, “US-UK negotiating flexibility would be restricted and trade talks limited to areas outside of the scope of the customs union, for instance, regulatory cooperation, services, public procurement, intellectual property and digital trade,” says Berner-Eyde.


As it stands, Mr Johnson’s government is thought most likely to


try to get a deal with the Americans that replicates the sort of pact that the EU finally struck with Canada last year. Even using this framework, however, poses its own problems (see article on page 9). And then, of course, there are political hurdles to overcome


on both sides of the Atlantic. The Conservatives’ majority in the House of Commons has gone, even with the backing of Northern Ireland’s Democratic Unionists. And next year’s presidential election in the US could make any agreement between warring Democrats and Republicans hard to achieve when their eyes will be so firmly focused on the upcoming polls.


TIME IS NOT ON THE UK’S SIDE But perhaps the greatest challenge facing Britain’s ambitions of achieving a trade deal with the US is that old enemy: time. Yasmeen Serhan, a London-based correspondent of The Atlantic, commented recently that, with the next Brexit deadline looming and with no withdrawal agreement currently in sight, “It’s likely that Britain will leave the EU at the end of October without a deal. Most of the trading relationships it had as a member of the bloc will end.” She adds, “It will need trading partners – and quickly. But time


is precisely what it doesn’t have. While some trade negotiations can take as little as one-and-a-half to three years to complete, others span decades. A potential trading partner will almost certainly use this weakness to reap concessions.” As Sam Lowe, senior research fellow at the Centre for European


Reform says, “This always gets portrayed as a sort of pejorative thing about talking down Britain, and it’s really not. It’s just being realistic about power dynamics in these negotiations. Who needs a deal more?” After Foreign Secretary Dominic Raab met President Trump


and other senior, administration figures in Washington over the summer, he was adamant that there was a “huge appetite” in America, as well as Britain, for a US-UK trade deal. The snag is that, while this appetite might exist, nobody is quite sure yet what’s on the menu, still less what each dish might cost.


Keep up-to-date with daily economic and political comment around Brexit, trade developments and their impact on the workforce, HR, talent and international assignments. Read and contribute to our US coverage with insights from our country partners in US and around the world relocateglobal.com


8 | RELOCATE | AUTUMN 2019


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