LONDON — President Joe Biden and Prime Minister Rishi Sunak are preparing a “foundational” U.S. / U.K. trade agreement designed to be wrapped up before both men face re-election next year, documents leaked to POLITICO show.
The negotiations are scheduled to start this month with the initial set of chapters completed by spring of next year, according to a draft plan prepared by the United States Trade Representative’s (USTR) office in late August.
The outline deal set out in the papers does not contain the market access commitments required for a formal free trade agreement in the eyes of the World Trade Organization.
But the proposed agreement would go much further than anything considered in public so far, with USTR proposing to deal with thorny issues like agriculture across 11 chapters which also include labor rights, the environment, supply chains, regulation of services, digital trade documents and others.
“We’re discussing and considering a range of things, but all is very much in early stages and nothing has been finalized yet,” said a person familiar with the discussions.
The plan sets out the “target timing for completing negotiations” of the initial list of chapters in spring 2024, ahead of the U.S. election next November and the 2024 U.K. general election.
Bloomberg reported back in April that the U.K. was hoping to restart trade talks with the U.S. when Biden visited Belfast later that month.
But Sunak said that the situation had “evolved” when he was pressed in June on why the U.K. government had broken a manifesto pledge for a U.S. deal, which had been billed by supporters as the biggest post-Brexit prize.
Farming fears
Tentatively dubbed the U.S.-UK Trade Partnership Forum (TPF), the initiative “will seek to negotiate a new, foundational trade agreement to create a permanent mechanism to coordinate and cooperate on trade policy issues of mutual interest and to further deepen existing trade ties” between Britain and the U.S.
The Biden administration wants concessions on agriculture, but the U.K.’s Department for Environment Food and Rural Affairs is “blocking this,” said a U.K. government official granted anonymity as they were not approved to speak to the media. “It is now with the PM [Rishi Sunak] to make a decision on whether to include it or not.”
But there are concerns within the Department for Business and Trade, the official said, that if agricultural barriers aren’t up for discussion “it will cause the U.S. to walk away.”
U.S. farming practices like chlorine-washed chicken and hormone-injected beef have long been controversial and proved a sticking point in negotiations between Boris Johnson and Donald Trump.
“Presumably it won’t include those because it’s been a red line for Rishi Sunak,” said a British agriculture lobbyist. Otherwise, they pointed out, it would be “a major climbdown” after Sunak said hormone-treated beef and chlorine-washed chicken would be barred from the British market at a food summit earlier this year. They hoped the deal would provide removal of non-tariff barriers that could benefit both sides, they added.
The pact is modeled on the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) which tackles regulation and non-tariff barriers with nations like South Korea, Thailand and Fiji, as well as the U.S. deal with Taiwan finalized over the summer, said a business consultant who requested anonymity to speak on sensitive issues.
This would provide “a framework that helps with the alignment of standards and regulations in a coherent way,” they said. The main downside of the pact is there’s “no market access,” they added. The Biden administration is not offering this to any trade partners.
The timeline for the initial chapters is tight. “Unless you do it that fast, it’s not getting through Congress before both U.K. and U.S. elections,” the business consultant said.
There is “a real appetite in the House for a trade agreement with the U.K.,” said Duncan Edwards, chief executive of BritishAmerican Business, a trans-Atlantic business lobby. “If an agreement was negotiated, it would definitely get approved in the House,” he said, “assuming we could solve the problems around agriculture.”
Negotiations are planned to kick off this month and would run in parallel with ongoing negotiations for a U.S.-UK Critical Minerals Agreement.
“The specific chapters would be a foundational agreement that could be further built upon and developed over time, expanding both the range of issues covered as well as the depth of the commitments,” USTR proposes.
The U.K. government was contacted for comment. The White House declined to do so.