Donald Trump’s return to the White House has reignited calls for a free trade deal between the United Kingdom and the United States.

Shortly after the The UK has left the EU, The first negotiations on such an agreement took place between Britain and the United States during Trump’s first presidential term.

Progress in this area was halted by the Biden administration, however, and in 2023, then-Business Secretary Kemi Badenoch declared that “the United States is not entering into free trade agreements with any country.”

However, there remains hope that the shelved deal could be revisited if the US and UK overcome certain obstacles.

Badenoch, now Conservative leader, called on the government to commit to revitalizing a free trade agreement (FTA) with the United States.

Write in The telegraph this weekend she said: “A US-UK FTA is one of the biggest prizes of Brexit.

“The opportunities for collaboration in artificial intelligence, global supply chains, energy security and financial services, among other issues, are endless and limitless. »

She argued that Trump could use such a deal to “send strong signals to France and Germany that positive engagement with his administration could produce benefits.”

However, sticking points from the latest round of negotiations could further complicate any future US-UK trade deal.

Access to the NHS

Efforts to protect the NHS could pose a major obstacle to UK-US trade talks during Trump’s second term.

In the past, the United States has pushed to include the NHS in trade negotiations, with the aim of ensuring American pharmaceutical companies have access to the British healthcare market.

American trade plans, outlined in a set of policies known as Project 2025proposed greater “openness to foreign competition” in health services, potentially allowing US companies to exert greater influence over NHS spending and drug prices.

One of the US’s main aims is to have the NHS pay ‘market-based’ drug prices, a system which would drive up the cost of medicines in the UK.

The NHS is currently using its purchasing power on a large scale to negotiate significant price reductions – far lower than those typically seen in the US, where private healthcare markets drive up prices.

This difference in approach has led U.S. negotiators to argue that Americans, who pay much higher prices for the same drugs, are “subsidizing” global health care costs.

Additionally, the US has in the past pushed for an extension of patents on medicines, which would delay the introduction of more affordable generic medicines in the UK.

In the NHS, once a medicine’s patent expires, generic versions become available at a much lower price, helping the NHS manage its budget and reduce costs for patients.

If the US were to secure longer patent protections as part of a trade deal, it would likely increase costs for the NHS, which could threaten the financial stability of the health service.

Significant opposition has been raised in the past to suggestions that the United States could increase its influence over the British health system.

In 2020, Labor failed to pass an amendment to the Trade Bill which aimed to ensure the NHS would be exempt from any future trade deals.

It was rejected, with the Conservatives repeatedly insisting at the time that the NHS was “not on the table” in trade negotiations.

With this level of opposition from all sides, the UK is unlikely to give in to a trade deal with the US that provides access to the healthcare market.

Impact on British agriculture

UK agricultural standards and practices pose a significant barrier to a potential US-UK trade deal due to contrasting regulations, different approaches to food safety and very different scales of operations agricultural in both countries.

According to documents leaked in 2019, the US had previously told UK officials that it considered its food safety system “the gold standard”, while acknowledging that its approach was different from that of the EU.

For example, while the EU tries to reduce the amount of chemicals in food, the United States continues to use them, including chlorine, as “a last check to eliminate all traces of pathogens.”

However, in November 2020, the government promised do not allow chlorinated chicken or hormone-fed beef – food products on sale in the United States – on British supermarket shelves.

Another challenge arises from discrepancies in animal welfare standards. British farmers and policymakers are reluctant to lower their standards to allow US imports that do not meet the same levels of animal welfare.

Beyond the standards, the economic scale of American agriculture presents a structural challenge. US farms operate on a much larger scale than those in the UK, allowing US producers to offer products at a lower cost.

Although British farmers can compete on high-quality, niche products, they may struggle to compete with the huge production and lower prices of American commodities.

Additionally, there are concerns that adopting US food standards and practices could damage the reputation of the UK agricultural sector, making it less competitive in the EU market.

To protect UK agriculture, the government gave statutory powers to the Trade and Agriculture Commission in 2020.

The commission, on which the National Farmers Union and the Food and Drink Federation sit, may be asked to produce an independent report on the impact on animal welfare and agriculture of each trade agreement. free trade signed by the government after Brexit.

Their recommendations on whether to accept or reject the deal will then be tabled in Parliament at the start of the 21-day scrutiny period.

Concern about the impact of a US-UK trade deal is likely to be high among UK farmers, and proposals to lower food standards or increase market impact could struggle to gain support from the sector.

Impact on the Brexit “reset”

There has been speculation that Trump could use trade negotiations with the United Kingdom to encourage further separations from the EU after Brexit.

But this is in direct contrast to the policy of the current government. commit to initiating a “reset” with the block.

Although Brexit has allowed the UK to negotiate its own trade deals, the scale of regulatory divergence from the EU – particularly in areas such as food standards and environmental policies – is affecting its options and negotiating position with the United States.

The EU remains the UK’s largest trading partner and, as such, regulatory alignment with it is crucial to maintaining access to European markets.

The UK accepted certain commitments in the Brexit withdrawal agreement, such as respecting EU standards in specific areas, to avoid barriers to trade.

This alignment restricts the UK’s flexibility to adopt US-style regulatory practices in a trade deal, as these could conflict with EU requirements. Food standards are one such area where the UK may be forced to prioritize ties with the EU over US requirements.

The new Labor government may, however, want to focus on an improved trade deal with the EU.

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The trade deal drawn up under Boris Johnson and the agreement on EU access to UK fishing waters are due to be revised in 2026.

It is also hoped that the UK and EU can reach new agreements on animal and plant health rules to reduce border checks.

Labor and the EU also want to formalize cooperation on foreign and security policy, which has been managed on an ad hoc basis since Brexit.

The EU has also called for a youth mobility scheme, which would allow those under 30 to live, work and study more freely in the two jurisdictions.

With the EU on the UK’s doorstep, the government may seek to prioritize its relationship with the bloc over resuming trade talks with the United States.