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What does a Biden presidency mean for trade?

James Kane explores some of the implications of the US election for a post-Brexit UK–US trade deal 

James Kane explores some of the implications of the US election for a post-Brexit UK–US trade deal 

Leaders across the world have done little to hide their relief at Joe Biden’s victory in the US presidential elections. They hope that it will mean the end of one of the most difficult periods in the history of America’s trading relations with the rest of the world, during which it has provoked a crisis in the multilateral trading system and slammed tariffs of dubious legality on its closest allies’ exports.

The new US president-elect will, on taking office, certainly put the that trading system in a healthier place, if only because he is not openly hostile to it. But the fact that the US will be a more reliable trading partner in general is unlikely to make it an easier one for the UK to negotiate with.

'America First' isn’t going away – at least in substance

Donald Trump was more explicit than any other president in his rhetorical statements about 'America First'. But in reality America always came first – and will continue to for Biden. US trade policy under administrations of both parties has always been about the pursuit of US business interests.

Those interests include the agricultural exports that are so politically challenging for the UK. US agribusiness will still want access to UK markets – including for their hormone-treated beef and, yes, chlorine-washed chicken. Given that Biden’s home state of Delaware is one of the US’s largest chicken producers, it seems unlikely the UK will get a deal without making concessions in this area – indeed, Nick Clegg claims that Biden told him explicitly that “We are not going to sign anything that the chicken farmers of Delaware don’t like!”

Similarly, the American pharmaceutical industry will still want changes to the UK’s system for protecting drug patents and to the way the NHS buys drugs. In the Trans-Pacific Partnership (TPP), negotiated under the Obama administration, the US secured strict rules on drug patents for the benefit of US pharmaceutical companies (which the remaining members found so unpalatable they suspended them when Trump pulled the US out of the TPP). It seems unlikely the US will stop pushing for such rules, no matter what Biden wants to do with US healthcare domestically.

A UK–US deal will take longer

Trump often expressed enthusiasm for a UK–US trade deal – though whether that enthusiasm would actually have made a deal any easier is open to question. Trade negotiations with the UK seem likely to be a lower priority for Biden, not least because he has so much else on his plate. But beyond the politics, there are also practical issues which will make a deal under the new administration harder.

In the UK, an incoming prime minister needs to find just under 100 ministers, but the permanent civil service stays in post and maintains the continuity of government. In the US, a new president has to appoint around 4,000 officials, many of whom require confirmation by the Senate. Getting the US Trade Representative’s office up and running again is likely to take at least a couple of months after Biden’s inauguration in January.

Even with the best will in the world – which may not be guaranteed if the UK government continues to ignore Biden’s views on its controversial Internal Market Bill – this is likely to make it impossible to conclude a UK–US deal before the president’s 'fast track' authority to sign trade deals (formally Trade Promotion Authority, TPA) expires on 1 July 2021. While the US has signed one FTA without TPA (in 2000, with Jordan), its absence makes the congressional approval procedure much longer and more troublesome. Biden may find that he has more important things on which to use his limited capital with Congress than trying to renew TPA.

US allies will still be expected to take sides against China

One of the keynotes of the Trump administration has been an increasingly confrontational relationship with China. While the tone may change under Biden, the substance, once again, will not. One of the few beliefs that are now shared across the US political spectrum is in the fundamental threat posed by the rise of China. This means that Washington will continue to push its allies to align themselves more clearly with it and against Beijing. The 'poison pill' clause inserted into Trump’s revised trade agreement with Canada and Mexico – which allows the US to pull out of the agreement if either of its partners signs a trade deal with China – seems likely to continue to feature in trade deals under Biden. The pressure applied to US allies to exclude Huawei from their 5G mobile networks mobile networks – applied successfully in the case of the UK – will similarly not let up.

The US election result is unlikely to have a large impact on the UK’s trade policy. True, Washington is likely to be a more predictable partner than in the past four years – and businesses on both sides of the Atlantic will breathe a sigh of relief at the thought of no longer having to worry about new tariffs springing up from one day to the next. But the fundamentals of US trade policy have always been dictated by the US’s economic and political structure. Biden’s trade officials may be more likely to wear a velvet glove than Trump’s were, but the iron fist beneath will not change.

Listen to our Inside Briefing Extra podcast on the Biden presidency

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