US-UK trade deal talks set to miss crucial Washington deadline

US-UK trade deal talks set to miss crucial Washington deadline

Chances of catching ‘fast-track’ through Congress fade as Biden focuses on Airbus-Boeing dispute

UK hopes of clinching a trade deal with the US — seen as one of the biggest prizes of Brexit — are facing a further setback as negotiators are set to miss a critical deadline for securing swift passage through Congress.

Trade negotiators were racing to put a deal before Congress before the end of the month, but will now lose the chance to be covered by “fast-track” legislation known as the Trade Promotion Authority, raising the prospect of a more difficult passage on Capitol Hill.

According to people familiar with the negotiations, the deal has also been held up by the Biden administration’s decision to focus talks on resolving 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 in the 16-year dispute between the US, UK and EU to address challenges posed by Chinese entrants to the aircraft sector. 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 either be put before Congress without the fast-track protections — 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 were pessimistic about the deal being able to get through Congress without attracting a raft of amendments from lawmakers representing agricultural states, which could significantly slow passage of the deal. Trade rules regarding 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 Senate Republicans, said that while it was “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 aircraft subsidies dispute.

Truss still believed a free trade deal was 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 Trump administration early last year promised that a US-UK trade deal was at the “top of the list” of priorities.

However, the Biden administration has made it clear that trade deals are not a legislative priority, as it focuses instead on its domestic economic agenda. 

White House press secretary Jen Psaki said in January that 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.

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