US-UK Trade Deal waits for Biden and a No Deal Brexit

While publicly the US-UK trade talks are progressing at pace, with both sides committing to wrap up a deal before US elections (3 November), in reality this will prove impossible.

For the Congress to be able to approve any deal, negotiations must wrap up next month, just three months after they began.

US Trade Representative Robert Lightizer had to face reality at the end of last month when he admitted that because of the notification requirements, “it is almost impossible unless the members (of Congress) decided they want to do something extraordinary,” like waive those requirements.

The Democrats will do Trump no favours. Even if Trump wins, there is bipartisan support in Congress to protect Ireland. Dublin will have a veto. If Biden wins we’re at the back of the queue behind the EU. 

For London, who is in more of a hurry than Washington, US talks are a ‘psychological tool’ to convince the EU Britain is no beggar in the EU-UK trade negotiations. Johnson has an interest in making a show of unity with Trump, despite the persisting underlying issue on agriculture (chlorinated chicken and geographical indications). 

Washington sees the deal as the way to have the UK, a traditional ally, align with its foreign policy objectives, while at the same time fostering Washington's trade interests not only in London but also with Brussels. This seems to be succeeding, with London increasingly bending to Washington pressures, as regards Beijing. 

The United States-Mexico-Canada Agreement (USMCA) is now being used as a blueprint for other trade deals by the Trump administration. As a result, the US will demand clauses similar to Article 32.10 of USMCA, which bans the trade partner in question from doing deals with “non-market economies” like China. Pointed out in the UK Parliament (12 May) by Labour’s shadow International Trade Secretary Emily Thornberry, who pressed her opposite number, Liz Truss, that such a clause would make a mockery of the UK’s much-vaunted freedom post BREXIT to negotiate deals with whichever country it wanted. Truss replied that the deal will preserve ‘the UK’s freedom of manoeuvre to negotiate with any other countries as the UK sees fit’.

How the UK ‘sees fit’ is still likely to be influenced not only by Washington, but above all by all those Tories who are preaching for a closer relationship with America and a tougher stance on China. The internal opposition to Beijing inside the Parliamentary Conservative Party is increasing with the creation of the China Research Group. This is aided and abetted by an increasingly adverse public opinion, with a survey in May reporting mistrust of China at 83 per cent (almost the same level as mistrust of Iran and North Korea) and a tougher stance from the Labour party painting Johnson in a corner.

The pandemic has also influenced No. 10’s change of strategy. In January London was hesitant to side with Washington on China, thinking the world would welcome ‘Global Britain’, a confident, outward-looking nation unchained from the EU. Confidence is draining away. That world of free trade and multilateralism to which the UK was deeply committed through the Atlantic alliance, the UN and the WTO is increasingly being put into question by inward looking economies. It’s an increasingly dangerous time to be alone. All UK industry doesn’t want for Xmas on top of all this is a no deal Brexit. But it increasingly looks as if that's what exactly will be under the tree.

By Glyn Ford - Former European Parliamentary Labour leader and LME exec member

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