UK hopes of clinching a trade deal with the US — seen as one of the major prizes of Brexit — is facing a further setback with negotiators set to miss a key deadline for securing a swift passage through Congress.
Trade negotiators were racing to put a deal before Congress before the end of the month, but will now miss the chance to be covered by “fast-track” legislation known as the Trade Promotion Authority (TPA), threatening a more difficult passage through Capitol Hill.
According to people familiar with the negotiations, the deal is also being held up by the new Biden administration’s decision to focus talks with the UK on solving the long running Airbus-Boeing dispute, which is related to aircraft subsidies.
The US trade representative’s office made clear this month that a settlement was needed to the 16-year dispute between the US, UK and EU in order to address challenges posed by new entrants to the aircraft sector from China. Beijing has made it a priority to break the global duopoly of Airbus and Boeing that has dominated for decades.
If a trade deal is eventually agreed, it will now 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 new TPA to be negotiated.
The TPA is US legislation that both governs the process through which trade deals pass through Congress and sets out the overarching principles of US trade policy.
The office of US trade representative Katherine Tai said on Monday that she had discussed her “ongoing review” of the US-UK trade talks with UK trade secretary Liz Truss.
UK officials are now pessimistic about the deal being able to get through the US Congress without attracting a raft of amendments from lawmakers representing US agricultural states, which could significantly slow passage of the deal. Trade rules around agriculture and food standards have been among the most contentious parts of the US-UK talks.
However, one ally of Truss said not having TPA cover “doesn’t blow the whole thing out of the water”.
Nasim Fussell, the former top trade counsel for Republicans in the Senate, said that while it is “not impossible” to pass a trade deal without the TPA in place, it would be “a tall order in this environment”.
Truss’s team said the minister’s discussions with Tai this week were “positive”, including around the idea of a “mini deal” covering tariffs on whisky exports — which are part of the wider dispute about aircraft subsidies.
Truss still believes a free trade deal is possible. “If the political will is there on both sides, it can be done,” a Truss aide said. “The mood music is pretty good on things like whisky tariffs, reforms of the World Trade Organization and China.”
Pro-Brexit politicians in the UK have long pointed to a trade deal with the US as one of the great upsides of leaving the EU. Leading figures in the Donald Trump administration were promising early last year that a US-UK trade deal was “top of the list” of priorities.
However, the new administration has made it clear that trade deals are not a legislative priority and it is instead focused on its domestic economic agenda.
White House press secretary Jen Psaki said in January there was no set timeline for completing the US-UK deal. The administration’s “primary priorities” were tackling coronavirus and providing economic relief to Americans, she added.