[CTC] UK preparing to finish bilateral trade deal under Biden administration

[Arthur Stamoulis]

UK preparing to finish bilateral trade deal under Biden administration
Inside US Trade, November 20, 2020 at 4:50 PM 

With President-elect Joe Biden set to take over the Oval Office in January, the United Kingdom is preparing to make its case to the new administration for quickly finishing the in-progress bilateral trade deal, according to a British official familiar with the matter – but the effort is up against a narrow timeframe and unknown Biden trade priorities.

The U.S. and UK finished a fifth round of trade negotiations in late October, which UK Trade Secretary Liz Truss called “the most intensive so far <https://insidetrade.com/node/169967>.” But despite the quick progress of the talks, the UK official acknowledged the two sides are “not just one round away from wrapping this up” and the fate of the deal will be determined by how negotiations progress with the new U.S. administration.

There are no additional rounds scheduled between now and Jan. 20, when Biden takes office, according to the official. Truss and U.S. Trade Representative Robert Lighthizer continue to talk about bilateral issues, the official added, and the UK negotiators remain in contact with USTR.

Biden and British Prime Minister Boris Johnson spoke by phone <https://insidetrade.com/node/170013> shortly after Biden was declared the projected winner of the U.S. election. Their conversation included Johnson touting the benefits of securing a U.S.-UK deal, but it remains unclear how Biden – and his eventual trade team – want to proceed on those negotiations.

Biden has said his priority upon taking office will be to get the domestic house in order economically before pursuing trade deals with other countries. However, negotiations with the UK are fairly advanced and the UK is arguing a deal would benefit post-pandemic economic recovery. It is an “oversimplification,” the UK official argued, to assume Biden’s domestic focus would completely preclude a U.S.-UK deal.

If the Biden administration is open to concluding a bilateral agreement quickly, the two sides will still be racing against the clock. With U.S. Trade Promotion Authority, which dictates a trade deal’s fast-track process, expiring over the summer, a U.S.-UK deal must be notified to Congress by early April. It is unlikely a deal could be achieved without a new USTR, who must be confirmed by the Senate. The confirmation process can take several months; Lighthizer was confirmed in May.

If TPA expires before the U.S. and UK reach a deal, the latter will be stuck waiting on a contentious – and likely lengthy – renewal process.

Despite the logistical challenges and potential divergence on a deal’s urgency, a Biden administration could be a boon for the UK on some issues within the trade talks. Specifically, Biden is likely to align more closely with the UK on an environmental and climate agenda as well as on labor provisions – both key Democratic priorities in trade negotiations. But the biggest challenges – especially in agriculture – will remain no matter what U.S. administration is spearheading the talks.  

An April deadline also gives the two sides little time to resolve outstanding bilateral trade irritants that could impede political support for the deal, like tariffs stemming from the Boeing-Airbus dispute, the UK’s proposed digital services tax, and U.S. tariffs on steel and aluminum. The 15-year odyssey of the Boeing-Airbus dispute is largely a U.S.-European Union issue, and it is likely the UK will go along with any settlement agreed by the two.

The EU imposed tariffs on $4 billion worth of U.S. goods earlier this month in retaliation for U.S. subsides to Boeing. The U.S. last year imposed its own retaliation for European subsidies to Airbus to the tune of $7.5 billion, including on UK goods. When the Brexit transition period ends on Dec. 31, the UK will no longer be bound by EU rules, meaning it will have to establish its own trade remedy rules and, potentially, duties.

A USTR Section 301 investigation into nearly a dozen countries’ planned digital taxes – including the UK – could result in additional tariffs imposed on British goods. The UK will look to the Biden administration to reengage on negotiations for a digital tax framework at the Organization for Economic Cooperation and Development. On Section 232 tariffs, Biden has not said whether he intends to lift the duties upon taking office. -- Hannah Monicken (hmonicken at iwpnews.com <mailto:hmonicken at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20201123/6aed5c64/attachment-0001.html>