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US says a UK trade deal ‘unlikely’ before November

America’s top trade negotiator has said a deal with the UK is unlikely before the US presidential election in November.

Ambassador Robert Lighthizer’s comments come as the two countries embark on a second round of negotiations.

Among the issues complicating the talks are disagreements over US agriculture exports and UK taxes on tech companies.

“There are very, very fundamental issues that we have to come to grips with,” Mr Lighthizer said.

“I don’t want anyone to think this is going to be a rollover.”

Chlorinated chicken

The two countries, which exchange £230bn worth of trade each year, started a second round of talks on Monday, after opening formal negotiations last month.

Mr Lighthizer told Congress that the US is looking for a comprehensive deal – not a more limited agreement of the kind it has settled for in other instances.

He said he expected to push for access to the UK market for American farmers, describing many of the standards that limit US food exports – such as those regarding chlorinated chicken – as “thinly veiled protectionism”.

“The United States has the best agriculture in the world. It has the safest, highest standards and I think we shouldn’t confuse science with consumer preference,” he said.

On issues such as agriculture “this administration is not going to compromise”, he said.

The two sides have yet to agree on any part of a deal, Mr Lighthizer said. He said he hoped to resolve some issues this week, but other matters – some of which depend on what comes out of UK talks with the European Union – will take longer to negotiate.

“There hasn’t been an enormous amount that’s happened yet,” he said.

The UK has vowed to maintain consumer and environmental standards and protect the National Health Service.

In a 180-page document setting out the UK’s objectives in March, ministers said they hoped to lower trade barriers faced by British car manufacturers, ceramics makers and producers of products such as cheddar cheese.

But a host of other issues threaten to overwhelm the talks.

On Wednesday, Mr Lighthizer warned again that the US would respond with tariffs if countries raise taxes on tech companies, as the UK did this spring.

The UK’s Department for International Trade said the negotiations with the US “were proceeding at pace”.

“The second virtual round of negotiations is currently underway and we welcome the US’ repeated commitment to reaching an agreement,” it said.

Digital tax war?

This month, the US launched an investigation into the digital services taxes in 10 jurisdictions, including the UK. The move is the first step in a process that could lead to retaliation.

Representative Lloyd Doggett, a Democrat from Texas, said he feared the US was going to start a wide-ranging trade war over the issue, despite legitimate concerns about whether tech firms are paying their fair share of taxes.

“I’m not a loophole guy but I don’t want a tax system that unfairly treats American companies,” Mr Lighthizer said. “The US will put in place tariffs if these countries move forward unilaterally, discriminating against these companies.”

The Organisation for Economic Cooperation and Development has been overseeing discussions aimed at reaching an international consensus for how to handle taxing online sales.

Mr Lighthizer said the administration did not accept the current proposal, which has otherwise received widespread support, and had pulled out of the talks.

“The reality is they all came together and agreed that they were going to screw America,” he said.

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