What will a Biden presidency mean for Brexit and ′Global Britain′? | Business | Economy and finance news from a German perspective | DW | 11.11.2020

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Business

What will a Biden presidency mean for Brexit and 'Global Britain'?

A trade deal with the US has long been the Holy Grail for devoted Brexiteers. A pro-EU, Irish-American in the White House wasn’t necessarily part of the plan. So what now for Global Britain?

Considering that Joe Biden called Boris Johnson a "physical and emotional clone" of Donald Trump, the UK prime minister was quick out of the blocks to congratulate the president-elect on his victory.

Johnson has reasons to make nice with the man who will become US president in January. The Conservative Party and the wider Brexit movement has been content to align itself with the Trump administration on several issues over the past few years. Trump himself has spoken approvingly of Johnson as "Britain Trump."

One reason for the whirlwind kinship was the Brexiteer ideal that the UK would easily strike a comprehensive trade deal with the US, a key stepping stone on the way to what the government has dubbed "Global Britain," its vision for the UK's post-Brexit foreign and trade policies.

After Johnson's big win in the UK general election last December, Trump tweeted: "Britain and the United States will now be free to strike a massive new Trade Deal after BREXIT. This deal has the potential to be far bigger and more lucrative than any deal that could be made with the EU. Celebrate Boris!"

Joe Biden

When asked by a BBC reporter for 'a word,', proud Irish-American Biden responded with: "The BBC? I'm Irish!"

The BBC? I'm Irish!

Contrast that enthusiasm with what President-elect Biden has said about a trade deal. A proud Irish-American, Biden has echoed the sentiments of House Speaker Nancy Pelosi and several other leading US politicians regarding Brexit and how it affects Ireland.

The question of the Irish border has dominated the debate over Brexit for years, making it one of the primary points of contention in UK-EU negotiations.

"We can't allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit," he tweeted in September. "Any trade deal between the US and UK must be contingent upon respect for the Agreement and preventing the return of a hard border. Period."

Biden's win has led to much comment in British political and media circles that his close relationship with Ireland and opposition to Brexit makes it bad news for the UK.

However, even if Donald Trump had won the election, a UK-US trade deal would have still faced the same roadblocks in Congress. According to Sherman Robinson, a senior fellow at the Washington DC-based Peterson Institute for International Economics (PIIE), Biden's election merely strengthens that existing fact.

"From the British perspective, it will just slow things down," he told DW.

He pointed out that the "fast-track authority," whereby Congress agrees to suspend its normal rules and debates and approves (or rejects) trade deals more quickly, expires next year. The so-called Trade Promotion Authority (TPA), which has been enacted/extended several times in the past since the mid-1970s, expires on July 1, 2021.

Given how many domestic issues Biden will have to handle before the 2022 midterm elections, he does not expect him to focus much on trade, especially not US-UK trade. If the new administration is to have an early focus on trade he says, it will likely be on WTO reform or on improving trade relations with the EU.

No deal on either side of the Atlantic

He also questions how well talks on a UK-US trade deal had actually been going under the Trump administration.

"They were not easy. Lighthizer's [United States Trade Representative Robert Lighthizer's] desire is for bilateral deals which are not particularly nice, they are not Free Trade Agreements, they tend to be managed Free Trade Agreements and Britain really was not keen on any of that so I suspect they were not as far advanced as Johnson had hoped they would be," he said.

Andrew Goodwin, chief UK economist with Oxford Economics, doesn't think Biden's win changes the situation materially.

"We don't think a Biden win will have a tangible impact on UK trade policy," he told DW. "As far as a UK-US trade deal is concerned, the main sticking point has always looked like being agricultural standards, with US demands likely to be incompatible with what the UK would be prepared to offer."

That begs the question: How important is it for the UK to strike a trade deal with the US anyway?

"I don't think it is vital," says Sherman Robinson. "The longer they can stay under the EU umbrella the better, but if it will just go back to WTO rules, that is not bad."

He also dismissed the idea that the UK could ever get any kind of special deal. "I don't think the US is going to do a trade deal with Britain that would be inconsistent with US trade deals with the EU or anybody else," he said.

Talk of how Biden may impact relations with the UK takes place against the backdrop of difficult UK-EU trade deal negotiations which are nearing a critical phase.

"We would see a UK-US trade deal as very much a second-order issue relative to a UK-EU deal," says Goodwin. "Location matters hugely in trade, so striking a deal with the EU is much more important."

Boris Johnson

Issues over fishing rights have been one of several roadblocks in the critical EU-UK trade negotiations

The deal that really matters

That suggests that "Global Britain" remains on hold until the long-term situation with the EU (with which the UK conducts around half its total trade) is resolved.

"Global Britain seems to be coming up against both political and practical challenges, both of which were always likely to prove problematic," says Goodwin. "Trade deals involve ceding some degree of sovereignty and, given the government has sent a clear message that it prioritizes sovereignty, it was always going to be difficult to make the concessions required to do trade deals."

According to Robinson, one obvious idea for the UK to pursue is to step up its bid to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade partnership of 11 Pacific countries.

"The CPTPP has become the benchmark for other deals," he said. "The EU is cutting deals with a lot of Southeast Asian countries and they seem to be pretty CPTPP-compatible."

Yet any such deal, like with a US-UK deal, would do little to offset the economic damage of a no-deal Brexit. At the time of writing, there are seven weeks left to avoid that becoming the jump-off point for Global Britain.

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