Google, chickens and the NHS: Major stumbling blocks to a US-UK trade deal

A new round of negotiations is under way between US and UK officials as they attempt to thrash out a trade deal.

Now the UK has left the EU, both sides have made public a keenness to agree a deal quicklythrough formal rounds of talks.

However, there are a few issues which could pose some serious problems for Boris Johnson and his team – both politically and economically.

DIGITAL SERVICES TAX (DST):

Would a leader break up Google?
Image:Any tax on tech firms could see a US retaliation

The UK’s DST came into operation on 1 April. It is a 2% tax on the revenues derived from UK users of social media platforms, search engines and online marketplaces and applies to revenue earned from that date.

US officials have launched an investigation onthe grounds it will unfairly penalise companies like Google and Amazon.

Treasury secretary Steve Mnuchin has previously threatened to retaliate against a digital services tax by slapping a 2% levy on UK car exports.

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“Just arbitrarily put taxes on our digital companies, we’ll consider arbitrarily putting taxes on car companies,” he said.

The Trump administration managed to delay a similar policy in France by warning it would put tariffs worth billions of dollars on French products.

A man walks past posters paying tribute to NHS staff who continue to work to help patients during the coronavirus COVID-19 outbreak in Glasgow
Image:Any aspect of a deal that would seem to damage the NHS will be costly for the PM

NHS:

“When you’re dealing in trade, everything is on the table,” Donald Trump said when asked if the NHS would be part of any negotiations. The president may have backtracked on that answer, made in the final days of Theresa May’s premiership, however, it is believed he will demand the NHS pays higher prices for US drugs.

In an interview with The Guardian, then-outgoing British ambassador to Washington Kim Darroch warned Mr Trump would reward his backers in drug firms by opening up British markets.

Prior to negotiations with the US, a 184-page document published by the Department for International Trade said the NHS would “not be on the table” during trade talks with America.

All 27,000 chickens at the Suffolk farm will be culled, Defra said
Image:There are growing fears over food standards – with chlorinated chicken hitting the headlines

FOOD STANDARDS:

There is growing concern the government has changed its stance on animal welfare and food safety in order to strike a trade deal.

In his election manifesto, Boris Johnson promised the UK would “not compromise on our high environmental protection, animal welfare and food standards”.

But recent attempts by MPs to insert a permanent ban into legislation have failed, and ministers are reported to be considering proposals to allow products such as chlorine-washed chicken and hormone-fed beef to go on sale in the UK.

While the US insists these processes are perfectly safe, there remain fears over health issues as well as concerns over animal welfare and undercutting UK producers.

The Daily Telegraph reported ministers are seeking a “dual tariff” scheme that would see little or no import duties placed on food and produce that meets current high UK standards, but slap hefty tolls on poor quality items.

Critics have pointed out this would still allow things like chlorinated chicken to be imported to the UK, even if they were made more expensive.

Fracking in Texas
Image:The government’s fracking ban could also be under threat from US companies who want to operate here

CLIMATE:

The US will push back aggressively against anything that will stop its companies doing business here.

The UK has plans to be carbon neutral by 2050, however America has little in the way of targets or policy on climate.

And according to some reports, the Mr Trump’s administration has banned any mention of the climate crisis in trade talks.

In previous talks on the stalled Transatlantic Trade and Investment Partnership between the US and the EU, America wanted any deal to prevent initiatives that would favour renewables over fossil fuels.

And the government’s fracking ban could also be under threat from US companies who want to operate here.

Mark Gibson

Graduates in Northwestern University, Evanston, Illinois 1990. Move to Los Angeles California in 2004. Specialized in Internet journalism.

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