Dead or alive? A UK-US trade deal by Sam Lowe and Beth Oppenheim
In his infamous interview with The Sun, US President Donald Trump warned that Theresa May’s Chequers plan would “kill” a trade deal with the US. He later backtracked, but the president was right the first time. May’s proposal involves regulatory alignment with the EU on goods. Some EU rules conflict with America’s, making a trade deal with the US very difficult to conclude. However, it remains overwhelmingly in the UK’s economic interest to prioritise a close economic relationship with the EU over any potential trade deal with the US. The government’s recent white paper commits the UK to follow the EU’s rulebook on goods and food. Additionally, it would see the UK remain in a de facto customs union with the EU until new systems could be agreed. These systems would allow the UK to apply its own tariffs at the border, alongside the EU’s, depending on the final destination of an imported good. The prime minister hopes that such a partnership would obviate the need for additional infrastructure and checks at the EU-UK border (including the Irish land border), and secure British manufacturers’ position in pan-European supply chains. But minimising trade barriers with the EU will come at a cost. The EU’s approach to goods standardisation and food and plant hygiene (SPS) has been frequently criticised by the US, most recently in its 2018 report on foreign trade barriers. The EU’s single standard model for goods is accused of unfairly discriminating
against US and internationally recognised alternative product standards. European SPS rules effectively shut out American products like beef, chicken and pork, due to restrictions on the use of growth hormones and antimicrobial washes. The EU’s SPS regime is particularly strict. If a country does not apply EU rules both domestically and in relation to third country imports, all of its exports of products of animal origin to the EU must enter through a veterinary border inspection post, where up to 50 per cent of containers are subject to physical inspections. If the UK were to accommodate American demands, the EU would be required to implement new checks on food imports from the UK, causing serious disruption for British suppliers currently selling, for example, Angus beef into the EU. Furthermore, the US remains unconvinced that the EU will accept the UK’s ‘facilitated customs arrangement’, viewing it as a stalking horse for a permanent customs union, which would leave the UK unable to unilaterally lower its goods tariffs as part of a transatlantic trade agreement. The UK faces a harsh dilemma. If it chooses to accommodate American demands as part of a