Despite the eagerness of both sides, it is unlikely for US and UK to strike a trade deal in the foreseeable future, Peter Holmes, trade expert and Fellow of the UKTPO at the University of Sussex, told Xinhua in a recent interview.
In the state visit to the UK last week, US President Donald Trump said he believes Britain can have a “very, very, substantial trade deal” with the U.S. after Britain leaves the European Union (EU).
But his remarks about Britain’s National Health Service (NHS) saying the NHS should form part of the future trade deal have sparked fury in the country.
“My personal opinion is that the only gains readily available would be tariff reductions on some food and chemical products, and possibly exemptions from US tariff surcharges,” said Holmes, referring to the possible scale of the future US-UK deal, “but as we have seen USMCA (United States-Mexico-Canada Agreement) do not in fact provide much by way of guarantees.”
He believed that deep regulatory gains are hard to realize in the deal, noting that “any regulatory alignment with the US would have two costs”.
Firstly, the UK would be under pressure to change its domestic regulations, such as lowering its standards and restricting it policies in some areas.UK consumers do not like US food safety standards.
“The US side is really determined to press the UK to change its food safety rules. Chlorine washed chicken is symbolic but also a real concern,” Holmes explained.”
It is unlikely that any deal with the US would explicitly require structural changes in the NHS, such as privatization of core functions,” he added with another example of NHS, “but the US might insist on including provisions, for example on services, that later on it could claim restricted UK policy choices.”
Secondly, any move away from alignment with the EU in either tariffs or regulations would mean more difficult access to the EU and pose problems for the Irish border.
Holmes explained, “US is trying to get the UK to align its standards system in that of the US, which would create additional barriers with the EU.”
Considering US intention to signal its aim to prize the UK away from the EU regulatory system, his view is that even with “firm intentions” on both sides, it would be difficult to do a deal in the foreseeable future.
Moreover, he stressed that, even if a deal could be done, many observers would be distrustful of promises made by the current US administration given recent issues over tariffs against Mexico.
“You may be right that the fears of damage from a UK-US deal are exaggerated,” he said, “but there are grounds to fear that a very weak UK government desperate to get a trade deal would make unwise concessions on regulations.”