US President Joe Biden
Photographer: Oliver Contreras / Sipa / Bloomberg
Photographer: Oliver Contreras / Sipa / Bloomberg
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The United Kingdom and the United States are unlikely to be ready to strike a trade deal before 2023, in a blow to British hopes of a quick Brexit victory, according to people familiar with the matter.
President Joe Biden’s administration is focused on other priorities, such as China and investment in domestic programs to boost the US economy, and its legal power to accelerate a trade deal in Congress expires on July 1.
According to a person familiar with the negotiations between the United Kingdom and the United States, that power is unlikely to be renewed before at least 2023 – because the mid-term elections in 2022 will make trade legislation politically too sensitive to pass .
In London, the government spoke publicly with optimism about the prospects for a deal with the US, but officials now downplay the chances of imminent progress.
UK talks about trade deal with the US, despite the omission of the White House call
“The UK has always been clear that securing a mutually beneficial and comprehensive agreement is more important than reaching an agreement on any fixed date,” said a spokesman for the British government’s Department of International Trade. The US Trade Representative’s office declined to comment.
Prime Minister Boris Johnson spoke to Biden on Friday, but the official British reading of the call made no mention of trade negotiations.
The slowdown will be disappointing for Johnson and his allies, who were eager to press for a quick deal as a first sign of the UK’s success as a global trading nation, recently released from EU membership restrictions.
Politically, the long wait for a deal could also increase the impression that Biden is keeping his distance from Britain from Johnson, in contrast to Donald Trump, who publicly defended accelerated trade negotiations and was an enthusiastic supporter of Brexit.
Irish History
Biden has criticized the way the UK is handling its withdrawal from the EU and is eager to talk about its Irish ancestry. This returned to focus on Thursday, when the president referred to his great-grandfather who fled Ireland on a so-called coffin ship “because of what the British were doing”.
Although Britain’s secretary of international trade, Liz Truss, said that most of the trade text with the US was agreed, the most contentious elements of an agreement – such as access to US agricultural products, such as chicken washed with chlorine or hormone-treated beef – have not yet been traded.
Truss and the new US Trade Representative, Katherine Tai, held their first talks this week, a high-level call that focused on issues such as the coronavirus pandemic, the reform of the World Trade Organization and the resolution of a dispute over long standing on illegal aid for Airbus SE and Boeing Co.
The spokesman for the UK Department of International Trade said that Truss and Tai would have “more discussions on trade agreement negotiations” after Tai had considered the progress of the negotiations so far.
In written responses to senators during his confirmation process in February, Tai said the government planned to review the state of the negotiations concluded under Trump and outline a way forward that is consistent with Biden’s policy of prioritizing the interests of American workers, without giving a time-line to this process.
Two years away
“I have a hard time seeing how the Biden government will make this work over the next two years,” said Simon Lester, associate director of the Center for Business Policy Studies at the Cato Institute, based in Washington. “I don’t know why they want to bring this up with everything else on their agenda.”
David Henig, director of the UK Trade Policy Project at the European Center for International Political Economy, agreed that the United States now has other priorities. “There is no feeling that something is about to happen,” he said. “This is the year that you really want to fix Airbus-Boeing, especially if you’re going after China.”
Permanently resolving the current four-month tariff suspension by the US in the Airbus-Boeing dispute, which covers trade of about 550 million pounds (US $ 755 million) with Britain and affects products such as whiskey and sour cream, is a priority for Tai and Truss, according to two people familiar with the discussions. Progress on this issue is likely to come much sooner than any advance in a broader free trade agreement between the United Kingdom and the United States, people said.
When the momentum returns to trade negotiations, the United Kingdom hopes that the new US administration will not remove the chapters that have already been agreed in its five rounds of negotiations, which began in May 2020.
The British government also believes it will be able to go further in the agreement in priority areas such as climate change, data and access to digital services than was possible under the Trump administration, one of the people said.