Disappointment for Boris Johnson as US president Biden puts brake on quick UK trade deal

Fri 26 Feb 2021
Posted by: Noelle McElhatton
Trade News

The new US administration under president Joe Biden has dashed Boris Johnson’s hopes of finalising a quick UK-US trade deal.  

Biden’s appointment as trade envoy, Katherine Tai, told her confirmation hearing on Thursday that there would be a review of negotiations so far, the Independent reports.

The UK had pinned its hopes on a deal under former president Donald Trump and wanted to continue talks with the Biden team. However, president Biden has shied away from committing to new trade talks, saying that his focus will be on helping the US recover from the Covid-19 pandemic.

Time to review

Speaking before the Senate Finance Committee, Tai said that much has changed since Trump's negotiations with the UK were initiated in 2018, pointing out that the UK has signed two agreements with the EU since then.

“It will be important to me to review the progress in the conversations so far, to review the objectives in light of all the changes that have taken place in the last two-and-a-half years,” she said.

According to the New European, No. 10 said that during Boris Johnson’s call to President Biden in January, the two “discussed the benefits of a potential free trade deal between our two countries, and the prime minister reiterated his intention to resolve existing trade issues as soon as possible”.

However, there was no mention of trade matters in the White House readout of the same call.

Biden was already thought unlikely to accelerate a UK trade deal, having clashed with Downing Street over the UK Internal Market bill (now enacted) that threatened to break international law over the Northern Ireland Protocol.

Chickens staying home

Biden’s home state is Delaware – one of the US’s largest chicken producers – which appeared to make the UK’s new reluctance to make concessions on agriculture another obstacle, the Independent adds.

Former deputy prime minister Nick Clegg once insisted that the Democrats had told him “we are not going to sign anything that the chicken farmers of Delaware don’t like”.

Reuters reports that trade minister Liz Truss is keen to restart trade talks with the US to discuss the removal of punitive tariffs on UK exports such as whisky.

Truss told parliament that as soon as the Senate hearings were over, she “will be on the phone to her [Tai] seeking an early resolution of these issues”.

According to CNBC, Tai has backed tariffs as a “legitimate tool” to counter China’s economic model and vowed to hold Beijing to its prior commitments, while promising a sweeping new approach to US trade.

Revamp global trade

She called for a revamp of global trade rules to eliminate “grey areas” exploited by China and end a “race to the bottom” that hurt workers and the environment. Tai said a key priority would be assessing China’s alleged use of forced labour in the Xinjiang province.

Tai also rejected a direct return to an 11-country Asia-Pacific free trade deal that originally included the US, saying the world had changed significantly since the Obama administration agreed to it in 2015. 

But she said the US would cooperate with other countries in Asia on trade, and work to improve the WTO's effectiveness.