March 1, 2020 / 10:20 PM / a month ago

Britain vows 'hard bargain' in list of demands for U.S. trade deal

LONDON (Reuters) - Britain on Monday unveiled its mandate for trade talks with the United States, with Prime Minister Boris Johnson vowing to drive a hard bargain in negotiations that are set to test the two allies’ “special relationship”.

FILE PHOTO: Britain's Prime Minister Boris Johnson leaves Downing Street in London, Britain, February 26, 2020. REUTERS/Toby Melville

After leaving the European Union in January, Johnson wants to pursue a trade deal with Washington to try not only to champion Britain’s new independence, but also to put pressure on the bloc in separate talks on a future relationship.

As a negotiating team heads to Brussels to start those discussions, the government set out its mandate for talks with the United States, warning that London would walk away if its demands are not met.

Britain said it wanted to achieve “huge gains” by removing barriers to trade, but that its much-loved National Health Service (NHS) would not be on the table in talks, and that its food standards would be maintained.

That could set the two sides on a collision course, putting additional pressure on a relationship already strained by London’s decision to allow China’s Huawei a limited role in its 5G mobile network, as well as a proposed digital services tax.

“We have the best negotiators in the business and of course, we’re going to drive a hard bargain to boost British industry,” Johnson said. “Most importantly, this transatlantic trade deal will reflect the unique closeness of our two great nations.”

Jeff Emerson, spokesman for the U.S. Trade Representative’s Office, said Washington was reviewing Britain’s negotiating objectives and was looking forward to starting talks.

“The United States remains committed to negotiating an ambitious trade agreement with the United Kingdom that is good for both countries,” he said.

Britain’s mandate hinted London could reconsider its plans to introduce the tax on big tech companies like Google, Facebook and Amazon in April after criticism by Washington.

A spokesman for Johnson said the government’s policy had not changed, adding that while ministers were working to find a global solution, “we have put forward proposals for a digital services tax”.

The government said its analysis showed a deal with the United States could boost transatlantic trade by 15.3 billion pounds ($19.61 billion) over 15 years and increase the size of the British economy by 0.16%.

The United States is currently Britain’s biggest trading partner after the EU, accounting for nearly 19% of all its exports in 2018 and 11% of imports. By comparison, the EU accounted for 45% of all UK exports and 53% of UK imports.

SCOTTISH SALMON FOR STETSON HATS

Johnson, the face of Britain’s campaign to leave the EU, has repeatedly said the ability to strike new trade deals with other countries is a major benefit of Brexit.

But opposition political parties said the modest potential boost to gross domestic product would not make up for the economic hit Britain will take from leaving the EU.

“Today’s analysis is clear: the gains from the best-case trade deal with Donald Trump will not come close to outweighing what we expect to lose from leaving the EU,” said Sarah Olney, Liberal Democrat spokesperson for International Trade.

The government said manufacturers of cars, ceramics, food and drinks, and professional services, including architects and lawyers, would be among the biggest winners from the trade deal.

“Trading Scottish smoked salmon for Stetson hats, we will deliver lower prices and more choice for our shoppers,” Johnson said.  

Both sides hope a deal can be reached as soon as this year, but there are many hurdles.

The government reiterated that the NHS was “not for sale” - addressing criticism that a deal could let private U.S. healthcare providers into Britain’s state-funded health system.

It also vowed to uphold high standards on food safety and animal welfare amid fears from farmers that the government will allow U.S.-produced chlorine-washed chicken and hormone-treated beef into Britain.

“In a trade deal with the U.S., we will not diminish our food safety standards and we will also not put the NHS on the table,” British trade minister Liz Truss said. “If we don’t get the deal we want we will be prepared to walk away.”

Speaking later to parliament, she said she wanted the two allies to agree quickly to remove retaliatory tariffs on British and American products related to the U.S.-EU aircraft subsidy dispute “to show goodwill”.

Washington’s negotiating objectives, published last year, include pressing for full market access for U.S. pharmaceutical products and medical devices, which would require changes to NHS pricing restrictions and could increase the cost of drugs.

Britain’s Chief Trade Negotiation Adviser, Crawford Falconer, who previously worked as New Zealand’s chief negotiator, will represent the government in the talks, supported by dozens of officials.

Reporting by Elizabeth Piper, Andrew MacAskill and William James; Additional reporting by David Lawder in Washington, Kate Holton, William Schomberg, Paul Sandle and Alistair Smout in London; Editing by Catherine Evans, Philippa Fletcher and Dan Grebler

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