Biden, Johnson talk, but did they discuss US-UK trade deal?

UK says leaders discussed ‘benefits of a potential free-trade deal’, but US statement makes no mention of one.

Reaching a new trade accord with the US now that the UK has left the European Union is a top priority for British Prime Minister Boris Johnson [File: Bloomberg]
Reaching a new trade accord with the US now that the UK has left the European Union is a top priority for British Prime Minister Boris Johnson [File: Bloomberg]

U.K. Prime Minister Boris Johnson and U.S. President Joseph Biden struck different tones on the prospects of a trade deal between their respective countries, as Johnson became the first European leader to receive a phone call since Biden’s inauguration.

The U.K. statement on the call, which covered issues such as strengthening bilateral ties, collective defense and fighting climate change, also mentioned discussions of “the benefits of a potential free-trade deal between our two countries.” A statement released by the White House didn’t mention a discussion of trade.

Reaching a new trade accord with the U.S. now that the U.K. has exited the European Union is a top priority for Johnson, who’s looking to re-shape Britain’s global relations and show the benefits of having a trade policy independent from the EU. The U.S. is already the U.K.’s largest single-country trading partner, with trade between the two worth 221 billion pounds ($302 billion) in 2019, according to data from the British government.

A narrow time window is closing for the quick resolution of a trade accord: Biden needs the Senate to confirm Katherine Tai, his pick to be U.S. Trade Representative, and also faces the expiration of fast-track trade negotiating power delegated to the president by Congress. That ability, known as Trade Promotion Authority, expires July 1, and Biden would need to be close enough to a deal to notify Congress by April 1.

The prospect of a trade pact with the U.S. has been politically contentious in Britain, over concerns such as the U.K. opening its markets to U.S. agricultural products which may be made to lower animal-welfare standards. Outgoing U.S. Trade Representative Robert Lighthizer said in December that access for American farmers would be an important part of any deal.

A trade accord with the U.S. may also bring limited benefits to Johnson’s Britain. The U.K. government’s own impact assessment of a deal said it would boost long-term GDP by 0.16%, provided there was a full liberalization of tariffs and a 50% reduction in non-tariff measures. Leaving the EU with a thin trade deal — as Johnson agreed on Dec. 24 — would be expected to reduce long-run GDP growth by 4%, according to the Office for Budget Responsibility.

The U.K.’s Department for International Trade said talks with the U.S. are at an “advanced stage” and they are on track for a “comprehensive agreement.”

“Continued technical discussions have taken place between officials to ensure that both sides are in a good position to move forwards as the new administration begins its work,” the DIT said in a statement.

Trade issues aside, Biden pledged to work closely with Johnson as the U.K. hosts both the G-7 and the United Nations Climate Change conference this year, according to a statement from the White House.

Johnson “warmly welcomed” Biden’s decision to have the U.S. rejoin the Paris Agreement on reducing greenhouse emissions, abandoned by President Donald Trump. He also praised Biden for renewing U.S. support for the World Health Organization and the Covax program to support the equitable distribution of Covid-19 vaccines.

The two leaders also expressed their support for the North Atlantic Treaty Organization and for shared values to promote human rights, according to the U.K. statement.

Source: Bloomberg

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