JAMES BALL: Why a US-UK trade deal is already dead

PUBLISHED: 14:00 06 June 2019

US president Donald Trump and UK prime minister Theresa May during the state visit to Britain. Photo: Getty

US president Donald Trump and UK prime minister Theresa May during the state visit to Britain. Photo: Getty

2019 Getty Images

JAMES BALL on why a US-UK trade deal is nothing more than a right-wing pipe dream.

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And so the long humiliation is complete: Theresa May has ended her premiership in line with how her term ran, with a week full of frenetic activity for no purpose.

May's decision to host an awkward and unpopular state visit - with protests across London as politicians and senior royals made nice with Trump and his children - was rendered all-but-pointless even before it began, with the president unable to negotiate anything of substance with a prime minister who was set to step down just two days after the visit ends.

But the problems with hosting a state visit for Trump go far deeper than short-term concerns with whoever is the current occupant of Number 10: there is almost no issue of substance on which the UK and US are going to be able to agree anything in this country's advantage. This is particularly true for a US-UK trade deal. Despite this being a vaunted goal for May, for her international trade secretary Liam Fox and for many of her likely successors, such a deal is all but dead on arrival, for any PM of any party, for many years to come.

The first stumbling block in any potential deal was made all-too-visible by Trump's close friend and UK ambassador Woody Johnson who in Monday's newspapers said the quiet part out load and admitted the USA's powerful healthcare firms want access to the NHS. In case anyone missed it, Trump made the point in even more stark terms at his press conference the following day. The NHS would be "on the table" in trade talks.

This proposal, while popular with certain Conservative ministers and their pet think-tanks, is such a bucket of cold sick with UK voters that it alone would spell electoral suicide for any party seriously proposing it. But it's just the first of many. The next-biggest stumbling blocks come from the USA's agribusinesses - who both Obama and Trump's administrations have said could not be left out of any deal. These firms want access for hormone-fed beef, chlorinated chicken, and other US foodstuffs produced to different safety and quality standards to UK produce.

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The issue with chlorinated chicken - aside from sounding gross - doesn't, like some trade proponents argue, mainly centre around food safety: chlorine washing does work for some foods, and is sometimes used here (for salads, for example). The issue with chicken is what the chlorine-washing intends to hide: horrific and dirty living conditions for the chickens while they are alive. The USA takes a food-safety approach: provided the final foodstuff is good to eat, everything is fine.

The UK, with our traditional love of animals, has never been happy with these standards. Life for industrially-farmed animals in the UK may not be anyone's idea of a paradise, but standards here are well above those of the USA - and millions of the public care deeply about these issues.

That's before the USA tries to come for Cornish pasties and Scotch whisky, and remove their protected status covering who can call what they are selling by those names - which requires them to actually be made in the region - so they could sell US-made competitors here.

Some of us might think that's fair enough - others will not - but it comes with issues of its own, as do all the questions around food and product safety: the EU will not lower its standards to match the USA's. That would leave the UK on the horns of a dilemma. Either it lowers its own standards to match the USA's, so it can compete with the new and cheaper imports, in which case it becomes harder to export to the EU and creates the need for border checks. Or else it keeps its standards as they are now, and accepts the loss of companies, jobs, and farms, unable to compete with the new unfair competition allowed by the trade deal.

So far, so lose/lose. When it comes to what the UK would actually gain through a trade deal, it's hard to make the list all that much longer. The primary reason for this is that the UK is not a country that mainly makes things, but rather one which provides services - as we already do extensively with the USA.

The problem comes if we try to extend this, we quickly hit on US red lines that they have shown no willingness to shift. The USA only lets overseas companies compete for its own government contracts in limited ways - a practice fuelled by donations from companies in House and Senate members' home seats, who need the money for re-election. It is showing no inclination to further open its financial services, either. There is little upside for us in such a deal.

Any deal the UK government struck up with the US congress would in practice need ratifying by the US Congress and by the UK's parliament. It is all but impossible to picture even the most basic of deals that could clear both of these hurdles: it is a right-wing pipe dream, and applause line in a speech, that all but the dimmest of candidates know will not happen for decades to come.

The result, then, is a week like this one: lots of pageantry, lots of gossipy stories - Trump's insult of Sadiq Khan, his CNN barb (clearly unaware that Fox News shut in the UK due to lack of viewers), Camilla's wink, and Larry the cat vs The Beast - and absolutely no hope of even slightly breaking the deadlock. What better way to end Theresa May's prime ministerial career?

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