[CTC] US seeking bilateral trade deal with UK to press EU on TTIP

[Arthur Stamoulis]

https://www.theguardian.com/us-news/2016/jul/20/us-seeking-bilateral-trade-deal-with-uk-to-press-eu-on-ttip <https://www.theguardian.com/us-news/2016/jul/20/us-seeking-bilateral-trade-deal-with-uk-to-press-eu-on-ttip>
US seeking bilateral trade deal with UK to press EU on TTIP 

American officials moving swiftly to cement economic relationship with Britain and speed up stalled transatlantic trade deal with Europe

Patrick Wintour <https://www.theguardian.com/profile/patrickwintour> diplomatic editor

Wednesday 20 July 2016 13.41 EDT Last modified on Wednesday 20 July 2016 14.47 EDT

A potentially swift bilateral trade and investment deal with the UK is being suggested by American officials as a way of pressing the European Union <https://www.theguardian.com/world/eu> to speed up its own stalled transatlantic trade deal, as well as cementing a commitment to the UK-US economic relationship.

The news will be welcomed by the international trade secretary, Liam Fox, who has been charged with striking British trade deals to replace the EU’s deals with the rest of the world. The UK cannot formally sign any trade deals with other countries or trading blocs until it has left the EU, but it appears to be accepted that negotiations on the outline shape of such deals can start before that happens.

During the EU referendum campaign Barack Obama, the US President, said the UK would have to go to the back of the queue for a trade deal with America if it left the EU, but in the wake of the vote US thinking seems to be changing. Fox is due to visit the US shortly.

The US Secretary of State, John Kerry, has spent two days in the UK talking with Downing Street officials and new foreign secretary, Boris Johnson, trying to assess the kind of eventual relationship the UK would like to agree with the EU, and the trade-offs it might accept in order to retain access to the EU single market.

A bilateral UK-US deal would focus on business investment more than trade tariffs

Since 2013 the US hasbeen negotiating a Transatlantic Trade and Investment Partnership (TTIP) with the EU, including the UK. But the agreement is facing strong opposition particularly in Germany, France and Austria. The Obama administration has said if it cannot sign an TTIP <https://www.theguardian.com/business/ttip> agreement , it wants the task to be passed to Hilary Clinton.

But the US has little leverage over the EU to sign a deal, and a possible alternative outline deal with the free trading UK could act as a lever to persuade the EU to be more flexible. The German vice-chancellor Sigmar Gabriel, Germany’s most senior TTIP negotiator, has openly criticised the lack of progress in recent talks while senior members of his senior centre left SPD have said the deal is dead.

Speaking in London, Kerry said it was incorrect to assert that the UK and the US could not begin negotiations on a trade deal, but that it was “impossible to sign an agreement until the EU issue is resolved, and that obviously takes a period of time.”

He added: “President Obama made it very clear the other day, as did our trade representative, Michael Froman, that we are absolutely prepared to engage in conversations because it would be irresponsible not to.”

Boris Johnson added “clearly you can begin to pencil things in, you can’t ink them in”.

The investment deal would in essence allow US companies access to the UK. Britain is the US’s largest trading partner in the EU as measured by the total export value for goods.

There is strong support in the Senate for a bilateral US-UK trade deal. House ways and means committee chair, Kevin Brady, said last week: “We should now begin to discuss a modern, new trade agreement with the UK that not only continues but expands the level of trade between our two nations.” The attraction is that it should be possible to adapt and pick up on the framework and the progress made in the current TTIP trade talks.

Kerry is likely to make a final pitch to the EU to sign a deal this summer, including in a visit to Austria this month. He said on Tuesday at his London press conference that TTIP “does not usurp people’s ability to have strict standards. It embraces strict standards and it empowers people to be able to regulate their products and economies”

He argued the US trade deal with the Pacific nations upheld labour standards and he was “convinced that it is possible to address the concerns that exist within Europe <https://www.theguardian.com/world/europe-news>with respect to TTIP.”

Acknowledging the causes of the leave vote in the UK, he said: “For all those people who voted because they don’t think they’re getting the benefits of globalisation, we believe that passing TTIP is in fact the way to begin to guarantee you will get those benefits”.

There is a wider concern in Washington that Brexit might prompt a global economic downturn, which could benefit Donald Trump politically and make trade negotiations harder. The US has cast itself in the role of marriage guidance counsellor trying to ensure that the UK-EU divorce does not disrupt world growth.

It is exploring whether Germany and France – which are both also under pressure over migration - might be willing to give ground to the UK on the issue of free movement by introducing a wider brake on migration rather than just providing a special deal for the UK. 

The American administration is also investigating why the Remain camp was defeated, to see what lessons can be learnt for combatting populist forces in the US.

At his press conference Kerry repeatedly referred to the need to ensure globalisation benefitted everyone, and not just the rich.

 
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