Brexit: ‘No pressure’ for Joe Biden to strike trade deal says expert
Against all odds, this month, Prime Minister Boris Johnson secured a trade agreement with the EU after nine months of fraught negotiations. During a press conference in Downing Street on Christmas Eve, Mr Johnson declared Britain had secured its negotiating objectives. He said: “We have taken back control of our laws and our destiny.
“It is a good deal for all of Europe.”
The deal is without a doubt a huge triumph for the Prime Minister, who in December last year, won a thumping majority at the general election with the promise “to get Brexit done”.
Many have begun wondering whether Mr Johnson will be able to pull a similar move with the US.
However, the chances of him striking a free trade agreement with Washington look as slim as ever.
Mr Johnson put an agreement with the US at the heart of his plans to revive Britain after Brexit, but the election of Democratic nominee Joe Biden last November complicated things.
In an exclusive interview with Express.co.uk, Alan Winters, director of the Trade Policy Observatory at the University of Sussex, revealed why the Prime Minister will almost certainly fail to deliver what he promised.
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Prime Minister Boris Johnson
In July, an obscure piece of US legislation that both governs the process through which trade deals pass through Congress and sets out the overarching principles of US trade policy, expires.
When protected by that legislation — known as the Trade Promotion Authority — trade deals are effectively “fast tracked” through the US Congress with lawmakers unable to make substantial changes or amendments to the text of the deal.
To be protected by the TPA, a US-UK trade deal must be put before the US Congress by April.
If that deadline is missed, the deal will either be put before Congress without the fast-track protections offered, and risk being bogged down in disputes, or UK officials could wait for a fresh TPA to be negotiated.
Professor Winters said: “The chances of a trade deal with the US in the near future are really low.
“Americans want things out of the deal that are pretty unpalatable in the UK, such as chlorinated chicken and access to a pharmaceutical market at high prices.
“Basically all things that the UK Government has already said it cannot give.
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Professor Alan Winters
US President Donald Trump
“Now, they are not going to slip it through with Trump and Biden has lots of other things on his mind.
“He almost certainly will not appoint a trade representative to oversee the negotiations for a month or two.”
Prof Winters added: “Unless the deal is presented by April, it can’t go through on the Trade Promotion Authority, which expires in July.
“After then, it is unlikely that in the next two years Biden will spend political capital in renewing the Promotion Authority.
“Democrats have always found trade difficult.
“I think the Republicans will not be terribly keen to give them a victory, either.”
In the view of many Democrats, there is bad blood between Mr Biden and Mr Johnson as the Prime Minister bet too heavily on President Donald Trump.
A senior former American diplomat told POLITICO: “The UK Government continued to believe Trump was going to do favours for them and that hasn’t panned out.
“The trade deal was going to happen in a matter of weeks, then months, and it’s now four years later and it hasn’t happened.”
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President-elect Joe Biden
Moreover, many Democrats continue to take offence at Mr Johnson’s often inflammatory rhetoric, including a description of Barack Obama as America’s “part-Kenyan president” in 2016, raising the matter in discussions with a range of British officials.
On the other hand, Mr Biden was Vice President in an administration that put itself squarely behind David Cameron’s Remain campaign, notably clashing with Mr Johnson in the process.
Mr Biden said in Dublin the day after the referendum: “We’d have preferred a different outcome.”
He then lashed out at the “reactionary politicians and demagogues peddling xenophobia, nationalism and isolationism” in Europe and the US.
He also likened Mr Johnson to Donald Trump.
Launching a brutal swipe at the Prime Minister, Mr Biden told a fundraiser in San Francisco as Britain’s general election results rolled in last December: “You’re going to see people saying: ‘My God, Boris Johnson, who is kind of a physical and emotional clone of the President, is able to win’.”
According to Charles Kupchan, who served as a senior National Security Council European affairs official in both the Obama and Clinton administrations, Brexit will merely accelerate a trend since the end of the Cold War, of Washington engaging more directly with Paris and Berlin.
French President Emmanuel Macron
Lord David Owen
Ellen Laipson, director of George Mason University’s Center for Security Policy Studies, added: “France is the one that still aspires to be a global actor and has more ambition.”
In an exclusive interview with Express.co.uk, Lord David Owen echoed such claims, suggesting Mr Biden’s presidency could boost French President Emmanuel Macron’s plan to dethrone the City of London as Europe’s banker.
But if a deal with the US is agreed, he argued the City of London will become interconnected with New York.
He said: “If New York is linked to London, and they have all that clout and authority. They will be able to put in cheaper things.
“Now, they have already put people in some other European countries because of Brexit, but unless they want to put up barriers, their industry is going to start saying: ‘I am sorry, I am getting an offer from JP Morgan London that is significantly lower over a ten-year period investment. I can’t afford to not give it a go.’
“The City of London is very adaptable and it will have to compete. They are going to have to start cutting their costs and their bids will be lower.
“If they are closer to America, they can then pull in all that finance.
“In most of these big deals, money goes where the cheapest thing is. They don’t care about boundaries. Business doesn’t.”
Lord Owen added: “I don’t think myself we should underestimate the City of London getting closer to American city financing, allowing us the flexibility to underbid.
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“Being told by a politician you have to use Frankfurt or Paris is nonsense. Unless they want to go to a completely regimented, protectionist system, those people will not go.
“They will not get the investment.”
However, with no US-UK deal in sight, he may not be so confident.
Chief executive of European trading platform Aquis Exchange Alasdair Haynes told City A.M. his firm chose to open a Paris unit to be closer to where the regulatory decisions are made.
He said: “We felt very much that you can either argue against being on the outside or actually be on the inside and the French have an enormous influence on how things are run in Europe.
“We looked at Frankfurt, we looked at Ireland, we looked at Holland and then we looked at France, and the French have been extremely accommodating and it has worked very well and we’ve been very happy with what we’ve seen.”