US parks UK trade deal over labour concerns

Tue 19 Dec 2023
Posted by: Benjamin Roche
Trade News

Plans for a UK-US trade deal following the UK’s exit from the EU have hit the brakes as US president Joe Biden is said to have dropped the idea.

Labour pains

Politico reports that domestic disagreement is to blame, with members of Biden’s Democratic Party said to be critical of Biden for negotiating trade deals without enforceable workers’ rights standards.

A spokesperson for US senator Ron Wyden, a Democrat, said “the US and the UK should not make announcements until a deal that benefits Americans is achievable”.

Wyden has previously expressed that he found it “extremely disappointing” that Biden appeared to be pursuing “a 'trade agreement' that will neither benefit the American public, nor respect the role of Congress in international trade”.

The United States Trade Representative (USTR) office suggested in a draft proposal earlier in the year that negotiations would begin before the end of 2023. The draft deal had similarities with the Indo-Pacific Economic Framework for Prosperity (IPEF), which has already been nixed by senior Democrats’ concerns over labour standards.

Playing chicken

According to the Guardian, one spokesperson for the UK government 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.”

Earlier holdups in the talks resulted from both Democratic reluctance and UK concerns about food standards, particularly regarding the entry of chlorinated chicken and hormone-injected beef into UK markets.

Previous plans are said not to have included free trade in services, and plans were for a ‘foundational’ deal. It was thought that this may have led to a fully-fledged free trade agreement (FTA) in the future, however.

Trump card?

Anonymous Whitehall sources told the Daily Telegraph of their hopes that the talks could be revived should the Democratic administration be replaced with a Republican one following November 2024’s US election:

“When an agreement was being drawn up, it was because Trump had said that a trade deal with the UK was a possibility, so a non-Biden White House might be more amenable.

“We have always said on our end that if America wants to do a deal, we’re ready to do a deal. There’s a lot you can do outside a trade deal, but Trump was previously someone who said that a trade deal was a possibility.”

Trump’s administration previously pulled out of trade talks following the UK’s agreement of a post-Brexit deal with the EU.

A UK government spokesperson told the Independent that the US is the UK’s largest trading partner, racking up £310bn in trade annually. They added, “We’ve achieved all of that without a free trade agreement and through the compatibility of our economies, our commitment to open trade and the strength of our respective industries.”