London and Washington made a commitment on Tuesday to work at “a fast pace” on a comprehensive trade deal but disagreements on agriculture, the impasse in Britain’s talks with the EU and the US presidential election are expected to hinder progress.
In a joint statement, US trade representative Robert Lighthizer and Liz Truss, the UK international trade secretary, said almost 30 groups covering “all aspects of a comprehensive trade agreement” would hold virtual discussions over the next two weeks as negotiators sought to kick-start talks during the coronavirus lockdown.
Ms Truss and Mr Lighthizer said both countries were seeking an “ambitious deal” with a free trade agreement “a priority”. They said they had “committed the resources necessary to progress at a fast pace.”
Both sides have insisted that a wide-ranging deal is the goal of the talks, rather than the “mini-deals” the US has struck with China and is discussing with the EU.
But US officials are wary of closing any meaningful deal with London until the terms of Britain’s trading relationship with the EU are clear, since that will determine how closely, and in what areas, the UK’s regulations will remain aligned with Brussels.
Moreover, congressional aides and lobbyists in Washington were sceptical of much progress before the US presidential election in November.
Liam Fox, the UK’s former international trade secretary and a long-term proponent of a trade deal, insisted that the pandemic had increased the need for the US and UK to “liberalise” global trade. “Now we know the global trading situation has deteriorated so there is a clear political impetus to make rapid progress,” he told the FT.
But many in Washington, where key committees in Congress have to approve any final deal, are doubtful that can happen given the uncertainties around the UK’s talks with the EU and the presidential election.
“It’s going to be complicated,” said one congressional aide, adding: “Probably some low hanging fruit could get done by November.”
David Henig, director of the UK Trade Policy Project and a former UK government trade official, agreed there was scope for “some sort of deal” in the short term because Boris Johnson, Britain’s prime minister, and US president Donald Trump were keen on announcing “something” this year.
Striking a deal with the US is a high political priority for the Johnson government, even though its internal best case assessment says it would boost gross domestic product by 0.16 per cent over 15 years.
Mr Henig said the negligible economic impact combined with other likely disagreements over agriculture were “obstacles to a full deal.”
Farming is one potential flashpoint. London has ruled out relaxing agricultural standards to let US farmers sell more goods to Britain, such as chlorine-washed chicken and genetically modified crops.
But many in the US, including senior lawmakers, are pushing farming as a key part of any trade pact. Chuck Grassley, the Republican chairman of the Senate finance committee which must approve any deal between the US and the UK, said on Tuesday he hoped to see “more favourable free trade for American agriculture” as part of the UK talks.
Meanwhile, EU chief negotiator Michel Barnier briefed the bloc’s ambassadors on Tuesday that Brussels’ talks with the UK were making little headway. Problem areas include EU demands to retain access to UK fishing waters and British resistance to making commitments on regulation.
“The EU remains calm and united in our positions,” Mr Barnier tweeted after the meeting. “Progress on all issues in parallel is required in order to build a new, ambitious partnership with the UK.” The next negotiating round is scheduled to take place next week.
