Could new bumps in the road upend UK-US trade deal?

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Recent political moves in both the UK and US could upend the chances of an FTA between the two nations. What issues still need to be resolved?

With just a couple of months to go until the UK ends the Brexit transition phase, the country's efforts to cement its place in the world with its own set of free trade agreements (FTAs) are gaining pace.

While the UK has already secured its first major post-Brexit FTA with Japan, it is a deal with the US that is regarded as the top prize for the British government. However, it still seems there's a long road ahead before such a deal becomes reality, and political uncertainty is only one of the issues to be overcome.

Could a new administration pose challenges?

One of the biggest questions hanging over talks this year has been what the possibility of a new administration in Washington might mean for the chances of a deal. UK prime minister Boris Johnson has been keen to play up his personal relationship with Donald Trump, while the US president has indicated an FTA with the UK is a major trade priority.

The FTA's chances under a Joe Biden presidency, on the other hand, are less certain. Several reports in the UK recently have suggested Mr Johnson's team is already looking to put together a "rescue strategy" to save the talks should Mr Biden prove victorious on November 3rd's election. 

It has been suggested UK ministers are concerned this would be seen as a much lower priority by Mr Biden, which could mean talks are delayed indefinitely.

However, whoever ends up in the White House come January 20th 2021, it is Congress that will have to approve any deal, and this is also set to bring its own challenges, especially in the House of Representatives, which is highly likely to remain in Deomcratic control whatever happens come November.

Brexit bill worries Washington

Indeed, while much focus has been on the upcoming presidential election, it's been political moves on the other side of the Atlantic that may have thrown a spanner in the works.

One of the biggest potential hurdles for any FTA in Congress is the ongoing debate in the UK parliament on its controversial Internal Market Bill, which is intended to clarify trading arrangements within the UK after the ending of the Brexit transition period. 

The UK has acknowledged that this would breach the terms of its Withdrawal Agreement with the EU and break international law in a "very specific and limited way", but it is the potential impact on the Good Friday Agreement that could pose difficulties for any UK-US FTA.

Speaker of the House Nancy Pelosi has already been clear that the Internal Market Bill threatens any chance of a trade deal if it passes in its current form, a sentiment that has also been echoed by Mr Biden.

Ms Pelosi stated: "The Good Friday Agreement is the bedrock of peace in Northern Ireland. If the UK violates its international agreements and Brexit undermines the Good Friday accord, there will be absolutely no chance of a US-UK trade agreement passing the Congress".

The bill's chances of progressing unaltered remain uncertain, with the House of Lords seeking changes to remove the most contentious language. Therefore, it remains possible Mr Johnson may be forced to reconsider his plans based on domestic opposition and the outcome of November 3rd's election.

What other sticking points remain?

Aside from the political uncertainty, there remains a range of issues related to the FTA that are yet to be resolved, in sectors such as agriculture, automotives and pharmaceuticals.

While questions such as whether the UK will relax its animal welfare standards to allow for greater imports of US products like chicken have made headlines, matters such as digital taxation, tariffs on products including aluminium and whisky and state aid have all created friction between the two nations.

It seems there is still a long way to go before any deal is struck between the UK and US, and both sides will be looking at the other's political moves closely to gauge what the next steps should be.