US Election Day 2020: UK says US trade talks are in 'advanced stages' but what if Trump loses?

Tue 3 Nov 2020
Posted by: William Barns-Graham
Trade News

biden vs trump

The UK government has said its negotiations with the US for a landmark post-Brexit trade deal have moved to ‘advanced stages’ following the fifth round of talks in October.

However, with voting in the US presidential election to conclude tonight (3 November) - a record 100m early votes have already been cast either in person or by post - could the result of the race in the White House derail the progress in the talks so far?

The Daily Update looks at the possible ramifications of the pivotal, highly uncertain vote…

1. UK-US talks right now

The fifth round of negotiations between the UK and US took place between 19 and 30 October and the government yesterday announced that “almost all chapter areas are now in the advanced stages of talks”, with legal text already agreed to in multiple parts of the prospective deal.

Both sides are “confident” they are on track for a comprehensive agreement and the UK says it is “in a good position to move forward after the US election”.

2. UK-US trade in numbers

According to figures for 2018 from the ONS earlier this year (February 2020):

  • Overall UK-US trade was valued at £201.6bn
  • The UK exported £123.5bn worth of goods to the US
  • The UK imported £78.1bn from the US

When launching the negotiations in March, the government estimated that trade between the countries could increase by £15.8bn under a deal.

The UK and the US currently trade on WTO rules – the default tariff setting for WTO members.

3. Talks deadline

Unlike their EU-UK counterparts, there is no formal deadline for talks with the US. However, a US law allowing for a quicker-than-usual ratification of trade agreements in Congress is due to expire in July next year.

To make use of this law to quickly confirm a UK-US deal, an agreement will need to be reached by April 2021.

4. Continuity under a Trump win

If incumbent president Donald Trump wins this election, the talks will be likely to continue their current trajectory, with the same team of negotiators.

Trump – who once called himself ‘Mr Brexit’ – has repeatedly called for a ‘speedy trade deal’, according to the BBC.

However, the talks could still yet be derailed under a Trump presidency by US demands for greater access to the NHS and a lowering of UK agricultural import standards.

The UK has repeatedly said the NHS is not ‘on the table’ for negotiation and last weekend Trade Secretary Liz Truss pledged to protect current standards for food imports.

Truss wrote in the Daily Mail on Saturday, alongside environment Secretary George Eustice, that the government will not allow for the import of chlorinated chicken or hormone-injected beef under a US trade deal.

5. Biden and the ‘special relationship’

Should Democrat candidate Joe Biden win, the process of establishing a new government administration will in itself delay the talks, former deputy US trade representative Barbara Weisel told the Telegraph recently.

There are also fears that a UK-US deal would be less of a priority for the former vice-president. According to the BBC, Biden could prioritise strengthening US-EU relations above a possible UK agreement.

The nature of the UK’s exit from the EU could even determine the strength of the ‘special relationship’ under a Biden presidency.

Biden and his advisors have repeatedly said that the US – as a guarantor of the Good Friday Agreement – would not support the UK should it decide to override elements of the Northern Ireland Protocol by passing the controversial Internal Market Bill.

However, Thomas Wright, a fellow at the Brookings Institution in Washington, told the Times that Biden could pursue stronger relations with both the UK and the EU in order to contain the rising global influence of China.

Wright believes this strategy could include securing a free trade agreement with the UK.

6. Impact on global trade

The election could also be a turning point for global trade in general.

Over the last few years, President Trump has launched tariff wars against China and the EU (including the UK) and undermined the World Trade Organisation by vetoing key appointments to its arbitration body and more recently the body’s next leader.

In the run-up to the election, Biden has said he would look to adopt a more multilateral approach, which could see a softening of the US stance in relation to the WTO, China and the EU.

However, a full ‘reset’ to pre-Trump relations with China is unlikely, according to Anthony Gardner, America’s ambassador to the EU from 2014-17 and an adviser to the Biden campaign.

Gardner told the Times, “Nobody thinks this would just be a third term of Obama. Too much has happened and, by the way, Trump did exist and Trumpism will continue.”

The results are in…or are they?

Polls close in the early hours of tomorrow (UK time), though nearly 100 million people have already voted by post, according to the New York Times.

If there is a decisive outcome overnight, you would find out about it over breakfast in the UK. In 2016, Trump was declared the winner at 7:29am GMT.

If there isn’t a decisive outcome or if either side contests the outcome – which Trump has repeatedly said he might – then ‘election night’ could become ‘election week’ or even ‘election month’.

If there is a delay in the confirmation of the winner, this will likely cause uncertainty for global trade, financial markets and possibly delay further negotiations for a UK-US trade deal.