Sources say the deal was always likely to prove difficult to finalise, in part because the US still wanted greater access for their agricultural products…reports Asian Lite News
Ministers have given up on signing a trade agreement with the US before the next election, after the Biden administration signalled it had no interest in agreeing one.
British officials had been hoping to agree a “foundational trade partnership” before both countries head to the polls in the next 12 months, having already decided not to pursue a full-blown free trade agreement.
However, sources briefed on the talks say they are no longer taking place, thanks to reluctance among senior Democrats to open US markets to more foreign-made goods. The story was first revealed by Politico.
A British government spokesperson said: “The UK and US are rapidly expanding cooperation on a range of vital economic and trade issues building on the Atlantic declaration announced earlier this year.” Multiple sources, however, confirmed the foundational trade partnership was no longer on the table.
Vote Leave campaigners said giving the UK the freedom to sign bilateral trade agreements with other countries would be one of the biggest benefits of Brexit, with a US trade deal often held up as the biggest prize of all.
Talks over a free trade agreement stalled early on, however, thanks in part to resistance from Democratic members of Congress and concerns in the UK about opening up UK markets to chlorine-washed chicken and hormone-injected beef.
The deal would not have included lower barriers for service companies, meaning it fell short of a fully fledged free trade deal, but could have paved the way for one in the future.
Sources say the deal was always likely to prove difficult to finalise, in part because the US still wanted greater access for their agricultural products. The prime minister, Rishi Sunak, said at a food security summit earlier this year that he would not allow either chlorine-washed chicken or hormone-injected beef into the UK.
It also became clear in recent weeks that the Biden administration had no interest in signing any kind of a deal before the election, given how Donald Trump had weaponised international trade agreements during his first run for president.
A spokesperson for Ron Wyden, the Democratic chair of the Senate finance committee, told Politico: “It is Senator Wyden’s view that the United States and United Kingdom should not make announcements until a deal that benefits Americans is achievable.”
The proposal’s timeline for talks — which would not consider market access or meet the World Trade Organization’s definition of a free trade agreement — set out that negotiations would wrap up ahead of elections in Britain and the U.S. next year.
The deal was closer in substance to the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) — which tackles regulation and non-tariff barriers — than a full trade agreement.
But last month IPEF talks fell apart after senior 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 agreement with the U.S. as a significant post-Brexit prize. The draft was considered a road map to eventually securing a full-fledged, comprehensive deal. Business and Trade Secretary Kemi Badenoch pitched the IPEF-style deal in April during Biden’s visit to Belfast, Bloomberg reported, to reinvigorate talks first started under the Trump administration.
Key voices in the U.S. have expressed concern about the nature of a pact with the U.K. “Trade negotiations should be driven by substance,” said a spokesperson for Democratic Senator Ron Wyden, chairman of the powerful Senate Finance Committee, which provides congressional oversight for trade.
“It is Senator Wyden’s view that the United States and United Kingdom should not make announcements until a deal that benefits Americans is achievable,” the spokesperson added.
Wyden’s spokesperson said Congress “must have a clear role in approving any future trade agreements” and that the senior Democrat “believes it is important for USTR to be significantly more engaged with Congress on any future negotiations.”
USTR has gone back to Congress to ask for its input on a potential U.K. trade deal. But major outstanding issues between the U.S. and U.K. remain, including agriculture and whether any agreement would benefit American workers.
In a recent meeting with U.S. diplomats “the vibes were quite tough,” said the second person briefed on the proposed negotiations cited earlier. “They just doubled down on ‘you guys really need to lean into the worker-centric trade policy’ and ‘put yourself in the shoes of somebody in Pennsylvania.’”
The message, the person added, was “does this improve the lot of the farmers in Iowa? Does this help the U.S. economy? And if it doesn’t, they’re not going to do it.”
The U.S. approach “seems to be very focused on labor standards, on environmental issues on these very worthy things,” said the first person briefed on the proposed negotiations quoted at the top of this story.
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