LONDON – President Joe Biden has quietly shelved plans for a ‘core’ trade deal with the UK ahead of the 2024 election – following Senate opposition and disagreements over the deal’s scope .
A draft plan of the pact and its 11 proposed chapters, prepared by the office of the United States Trade Representative (USTR) earlier this year, indicated negotiations would start before the end of 2023.
But after facing numerous headwinds, the deal is unlikely to go through, two people briefed by the British and U.S. governments, respectively, told POLITICO. Both benefited from anonymity to speak on a sensitive subject.
“I don’t think we’re going to see this resurface,” said one of the people briefed on the proposed negotiations.
The proposal’s negotiating schedule – which would not take into account market access and would not meet the World Trade Organization’s definition of a free trade agreement – called for negotiations to conclude before the elections in Britain and the United States next year.
The agreement was closer, in substance, to the US-led Indo-Pacific Economic Framework for Prosperity (IPEF) – which tackles regulation and non-tariff barriers – than to a comprehensive trade deal.
But last month, IPEF spoke collapsed after top Democrats criticized the Biden administration’s negotiation of trade provisions that did not contain enforceable labor standards.
The British government has long coveted a trade deal with the United States, seen as a significant post-Brexit prize.
The draft was seen as a road map to finally reach a full, full-fledged agreement. Business and Commerce Secretary Kemi Badenoch outlined the IPEF-style deal in April during Biden’s visit to Belfast, Bloomberg reportedto relaunch the negotiations started under the Trump administration.
Congressional Oversight
In the United States, key voices have expressed concerns about the nature of a deal with the United Kingdom.
“Trade negotiations must be focused on substance,” said a spokesperson for Democratic Sen. Ron Wyden, chairman of the powerful Senate Finance Committee, which provides Congressional oversight of trade.
“Senator Wyden believes that the United States and the United Kingdom should not make announcements until a deal that benefits Americans is reached,” the spokesperson added.
When POLITICO first reported on the proposed negotiations in OctoberWyden said it was “extremely disappointing” that the Biden administration is attempting to proceed with “a ‘trade deal’ that will neither benefit the American public nor respect Congress’ role in international trade.”
Wyden’s spokesperson said Congress “must play a clear role in approving any future trade deals” and that the top Democrat “believes it is important that USTR engages much more with the Congress in all future negotiations.”
“The vibrations were quite harsh”
The USTR returned to Congress to seek its advice on a possible trade deal with the United Kingdom. But important issues remain unresolved between the United States and the United Kingdom, including agriculture and whether a deal would benefit American workers.
At a recent meeting with American diplomats, “the atmosphere was quite tough,” said the second person briefed on the proposed negotiations cited above.. “They just kept saying ‘you really need to look at worker-centered trade policy’ and ‘put yourself in someone’s shoes in Pennsylvania.’
The message, the person added, was: “Does this make Iowa farmers better off? Does this help the US economy? And if they don’t, they won’t do it. »
The U.S. approach “seems to be very focused on labor standards, environmental issues and those very laudable things,” said the first person briefed on the proposed negotiations cited at the top of this article.
That of Prime Minister Rishi Sunak Cupboard also pushed back a chapter dealing with agricultural regulations in the draft after the British leader told a food summit earlier this year he would not allow chemical washes or imports of hormone-injected beef like those from the United States to Britain.
Scottish ministers in the meantime I complained they had not been consulted. Agricultural regulation is a devolved issue in Scotland.
Meanwhile, the main focus of UK-US trade relations is on securing a deal on essential minerals that would allow UK carmakers to benefit from the electric vehicle rebates offered under the Biden administration’s Inflation Reduction Act.
“The UK and US are rapidly expanding our cooperation on a range of vital economic and trade issues, building on the Atlantic Declaration announced earlier this year,” a UK government spokesperson said.
Some in the UK have a philosophical view about the need for a broader trade deal with the US. Michael Mainelli, who as Mayor of the City of London inaugurated a new outpost The representative for the UK’s main financial district in New York said on Monday: “Trade has been going well without it.” It could go a little better with this.
The last the numbers show Total bilateral trade between the countries increased by 23.8% in the year to the end of the second quarter of 2023.
But in the United States, a trade deal with the United Kingdom is simply “not that high on the list,” Mainelli said.
