US trade deal talks won’t start until 2025 at the earliest

Joe Biden and Rishi Sunak - Reuters

Joe Biden and Rishi Sunak – Reuters

Negotiations for a US-UK free trade deal are unlikely to restart until 2025 at the earliest, nine years after the Brexit vote at the EU referendum.

Joe Biden, the US president, called off talks that had been taking place under Donald Trump when he took office, putting the prospect of any agreement on ice.

Rishi Sunak is now targeting smaller deals, such as on specific sectors or with individual US states, instead of an overarching agreement with America.

A White House spokesman confirmed on the eve of Mr Biden’s trip to Northern Ireland this week that there were no “active” negotiations happening about a trade deal.

A UK government insider close to trade policy told The Daily Telegraph that talks are unlikely to start again until at least early 2025, when a new US president could be in place.

The US election is scheduled for 5 November 2024. Mr Biden has said he will run for re-election. The Telegraph has reported Downing Street is also planning for an autumn 2024 election.

A UK-US free trade deal was held up as one of the potential wins from Brexit by Eurosceptics who campaigned to leave the EU at the June 2016 referendum.

First Theresa May and then Boris Johnson made public shows of seeking such a deal, with much progress made in formal negotiations under Mr Trump’s presidency.

But the change in leadership in America ended such progress. Mr Biden was lukewarm about the prospect of new trade deals in his White House bid in 2020.

Left-wing figures in his Democratic Party, such as his former presidential nomination rival Bernie Sanders, have criticised how Washington’s free trade approach saw US jobs lost in globalisation.

The White House now has the added complexity of the Republicans controlling the House of Representatives, one half of the US Congress, making passing laws more difficult for the Biden administration.

A US-UK free trade deal would need to be ratified by Congress. The Democrats only controlling the Senate means it is harder to secure passage for legal changes.

Ministers are in discussions with the US about striking a deal to make it easier to import rare minerals. It is modelled on the one Washington has recently struck with Japan.

The focus on striking deals with some of the 50 US states also continues. A deal was recently reached with North and South Carolina, with Oklahoma talks said to be progressing.

David Jones, the deputy chairman of the European Research Group, said it was understandable Government ministers wanted to focus on other countries beyond America.

Mr Jones said: “The US can remain on the back-burner until we have a more sympathetic US President.

“Indeed, it was rumoured that Biden himself was keen [for the US] to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. If that happens, we will not need a bilateral deal.

“In the meantime, we can focus on more enthusiastic trading partners, who are accounting for an increasing share of the global economy.”

Downing Street played down interest in a free trade deal on Tuesday ahead of Mr Sunak and Mr Biden meeting in Northern Ireland on Wednesday.

Asked whether progress could be expected to be made on a deal at the meeting, the Prime Minister’s official spokesman said: “A free trade agreement is not the only way of strengthening the UK-US trade relationship.”

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