Huffington Post | 13 November 2019
This is what US business wants from a US-UK trade deal
by Rachel Wearmouth
There should be an end to special treatment for the BBC and Post Office and fewer restrictions on building supermarkets, Washington’s most powerful business lobby group has said while setting out its demands for a post-Brexit US-UK trade deal.
Curbs on firms owned and run by national and local government, the right for tech companies to move data abroad, and secret corporate courts where business chiefs can sue Britain are just some proposals the US Chamber of Commerce is urging Donald Trump to play hard ball over.
The USCC represents more than three million American businesses and, alongside the Coalition of Services Industries, has just published details of the agenda it thinks the US president should pursue.
The document advocates opening vast swaths of the UK economy to the US markets and reflects an American private sector that is less restricted by red tape, government legislation and union rights.
It says: “As like-minded trading partners, the US and UK have the opportunity to craft a 21st Century world-class model agreement that reflects the openness of their respective markets and best practices, and also introduces new innovative elements.”
It comes as Boris Johnson and Jeremy Corbyn battle it out for the keys to Downing Street with the UK preparing to vote in a general election on December 12.
Asked to respond to the trading principles American firms want the UK to stick to, the government acknowledged the USCC had been “ambitious in their demands” but stressed the UK negotiating objectives had not yet been set out.
Trade Secretary Liz Truss told HuffPost UK: “A Conservative government will get Brexit done and seize the opportunities it offers by striking free trade agreements with like-minded countries around the world.
“We will drive a hard bargain and secure the best deals for UK businesses and UK taxpayers. That means maintaining our high standards and making sure British businesses are able to sell their fantastic goods around the world.”
Labour has repeatedly sounded the alarm over the risks of a “Trump trade deal”.
Chuka Umunna, the Lib Dems’ foreign affairs spokesman, meanwhile, said: “The stark reality of a Trump Johnson Brexit has been laid by bare by this document, which would put treasured national institutions such as the NHS, Post Office and BBC on the negotiating table.”
The full USCC document, published last week, is online here, but here are some of the American business demands.
Competition Rights Over Things Not Yet Invented
US businesses want to open as much of the UK to American competition as possible – which is exactly what you’d expect in a trade deal negotiation.
But they also want automatic trading rights between the US and UK for all new services based on technologies that are yet to be invented.
Called the “negative list basis”, this future opt-in clause began to emerge in trade deals after the internet upended the world’s infrastructure.
The document says the deal must ensure US firms get the same rights when it comes to “any new services that become possible to trade as a result of technological innovation” and that they be included in the deal “without further negotiation”.
Clampdown On Publicly-Run Companies
US firms want Trump to seek much tighter restrictions on the UK’s publicly-owned companies.
Such a move could spell trouble for the state-run utilities company the Scottish government is creating and would be a blow for Labour’s hopes to renationalise railways and energy. Some UK councils already own and run businesses serving local people such as estate agents and green energy providers.
The USCC wants the deal to stop the British government from promoting these firms, known as state-owned enterprises, and for any subsidies to be “subject to disciplines”.
The document says publicly-run companies should be “subject to the same disciplines [...] as other domestic and foreign enterprises” and be forced to bid for work on the same terms as private firms.
The USCC also wants “parity of treatment with respect to regulation, licensing, transparency, business operations, and public procurement”.
Secret Courts Where Businesses Can Sue The British Government
US businesses want a trade deal to establish an investor-state dispute settlement (ISDS) mechanism.
This is effectively a secret court system that allows corporations or investors to sue states at a special tribunal for things like breach of contract or alleged discrimination.
As it stands, the US does not have an ISDS with the UK and establishing one could mean the biggest transnational corporations – some of which, like Nestle and Unilever, are richer than developing nations – attempting to sue Britain for whatever they want.
To give an example of how ISDS may be used, the energy firm Uniper has threatened to sue the Netherlands for using legislation to phase out coal.
Right For US Contractors To Bid For HS2 And Heathrow – And Making Big Infrastructure Projects ‘Unstoppable’
The USCC names the UK’s high-speed rail network and the building of a third runway at Heathrow “important opportunities for improved procurement market access in a US-UK trade agreement”.
While this may have the bonus of the British state finding a cheaper deal for the taxpayer, Nick Dearden, director of the campaign group Global Justice Now, fears there may be a sting in the tail for eco-campaigners.
If opening bids to US markets is combined with new powers for companies to sue the UK, he believes there is a risk major infrastructure projects – which protesters such as Extinction Rebellion have demanded an end to – become effectively “unstoppable”.
Dearden told HuffPost UK: “The worrying thing for us is that, especially combined with ISDS, foreign investors could actually have more rights than domestic investors. Any attempt to stop such projects would mean massive, massive compensation to the US transnational corporations involved.”
More Rights Over Data For Big Tech
The USCC wants large US tech companies to have more rights to move UK people’s data around the world.
The document says cross-border data flows between the two countries “should be guaranteed” in the trade deal, and with minimum restrictions.
With many experts calling data “the new gold”, the submission makes clear US firms think Trump should be firm over this point.
“Restricting data flows as a means of protecting access to data or ensuring security is ineffective and inefficient,” the document reads. “The effect of such an approach would be to slow the expansion of trade in all internet-dependent services, and cloud services in particular.”
It says protecting privacy and personal data are “important public policy objectives”, but adds that negotiators should allow “only narrow exceptions” in this area.
Scrap The ‘Amazon Tax’
The UK government has said it wants to collect more tax from digital giants with bases in the UK. But the USCC document is quite specific about UK plans to target firms such as Google, Amazon or Facebook.
The lobbying organisation wants to strike out the idea entirely. On US-UK digital trade, the document says: “Such measures should not discriminate against digital services or single out companies or sectors for disparate treatment, either on a de jure or de facto basis.
“As presently envisioned, the proposed UK digital services tax fails to meet these important obligations.”
A Say Over UK Financial Regulations
The US Chamber of Commerce wants the US to have more say over regulations generally, but specifically financial rules.
The document says the US-UK deal should “foster deeper regulatory cooperation”, adding: “There is scope for more rigorous coordination and cooperation without undermining existing domestic rules and standards.”
It adds that the two countries should establish a “financial services regulatory working group” to thrash out new shared rules between Wall Street and the City.
Dearden warns it risks paving the way for another financial crash, adding governments cannot view the US-UK trade deal as “a golden opportunity to break free of state regulation” with “a race to the bottom in terms of financial standards”.
‘No Culture Carve Out’ For The BBC
The USCC would like to open up the UK’s media, television and advertising industries to US markets – and firms do not think the BBC should be exempt.
Current broadcasting quotas that govern advertising, where programmes are made and who makes them should also be “eliminated”, the USCC says.
Scrapping the rules could mean more ads and some sweeping changes to what Brits see both on television and streaming services such as Netflix.
The document says the deal “should include provisions to liberalise media and entertainment services, including all of its sub-sectors and related services (such as advertising), eliminate quotas and other forms of discriminatory treatment of films and television in all means of distribution, including online.”
It adds: “There should be no culture carve out and any agreement should ensure non-discrimination online.”
Retail Superstores Galore
Businesses in the US are eager to get a slice of the UK retail market – but they are much less keen on council planning regulations that restrict where superstores can be built.
The USCC calls for the UK-US deal to “eliminate economic needs tests” that see local authorities curb overly-aggressive retail development.
Additionally, they would want the UK to scrap rules on foreign-owned pharmacies.
The document reads: “The agreement should protect retail and distribution rights in both single and multi-brand formats, with no limits on size, geographic location, or merchandise assortment. Any agreement should also eliminate economic needs tests with regard to department stores, and should bind commitments related to foreign ownership of pharmacy operations.”
Pensions And Post Offices
US firms want to prohibit the nationalisation of some pension funds, which could make it more difficult for governments to bail out people left short when firms go bust.
The USCC says the deal should include rules banning “the nationalisation of privately managed individual account defined benefit and defined contribution retirement systems.”
It also wants to limit the ability of any future government from stepping in to help the Post Office – something which could favour Amazon, Deliveroo and private courier firms.
It says the two countries should tackle “market dominant players in the sector” with a range of measures such as cutting subsidies, adding: “This includes the elimination of cross-subsidisation and disparate treatment in the areas of customs procedures, duties, taxes, charges, transportation regulation, and enforcement.”