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Hello from Washington, what is causing a lot of excitement as we near the final leg of this 2020 presidential election. Last week there was a final debate in which President Donald Trump and Democratic nominee Joe Biden argued over whether or not the US is going "around the corner" on coronavirus, and on issues such as race and immigration to energy and fracking.
Our Main piece today It's about how the UK could change its position to deal with a Biden government on trade. Tit for tat is with Susan Danger, Managing Director of the American Chamber of Commerce of the EU, during the Chart of the day Illustrates the seasonal increase in fruit and vegetable imports from Europe for British customers.
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Time to bid
With the US presidential election in just over a week, foreign diplomats and traders are seriously preparing for the possibility of a Joe Biden administration. Nobody is doing this more than Prime Minister Boris Johnson's “global Great Britain”, for whom securing this important US trade deal will prove the fruits of going it alone after leaving the EU.
Economically, the deal isn't worth much to the UK at best. But politically it is very important. At least for now. However, the Johnson administration faces a difficult task. After dealing with Trump's protectionist trade tsar Robert Lighthizer, Britain faces a potential Democratic government with differing diplomatic and trade priorities – it has to "bidenize," as one British official said.
How does it look? In a past life, Biden has supported many of the free trade deals that Trump either tore or ranted against. He supported the much-hated NAFTA trade agreement with Mexico and Canada, which voters in the rust belt countries hold almost universally responsible for the loss of factory jobs. He voted to normalize trade relations with China that paved the way for promotion to the World Trade Organization in 2001.
Sentiment among US politicians and voters about China has changed dramatically since the early 2000s. Biden, knowing that, has turned. Like Trump, he's now a China hawk, advocating some protectionist trade policies to halt the surge in globalization, including taxing U.S. companies for offshore relocation and implementing federal procurement rules that encourage government agencies to move in buying US made goods. If he wins, we will likely see differences in approach and implementation compared to the Trump administration, but they share a common skepticism about uncontrolled globalization.
That is, when it comes to conspicuous trade agreements, There will be differences in focus between Biden's Democrats and Trump's Republicans. Democratic lawmakers on Capitol Hill have traditionally been more focused on the environment, workers' rights and labor standards, and the UK has to do the legwork to ensure it can show it cares about a green future. There is already conflict with Brussels over the inclusion of guarantees of compliance with international commitments on climate change in its trade agreement, and it is now likely that Washington will do so.
US Democrats in Leicester, England, have drawn attention to textile mills that operate under sweatshop-like conditions. © Getty Images
On labor issues, one might think Britain is on safe ground with its relatively developed laws and regulations. However, an adviser to the Democratic Congress pointed out that the party pays great attention to labor abuse – citing British media reports of clothing factories operating in Leicester under sweatshop-like conditions (as reported by my colleague Sarah O'Connor ) noticed and didn't like it.
Britain will also see a difference in the attitude of the Democrats on Brexit. While Trump officials past and present praise Britain's exit from the EU and agree to a no-deal scenario, Democrats praise alliances and will not welcome the UK without an agreement. Still, the British hope that as long as the Irish border issue is not mixed up, the Democrats can be appeased on whatever emerges from the deal talks.
One major difficulty, however, is Biden's own admission that trade will take a back seat in its administration. "I wouldn't sign a new trade deal until we have made major investments in our workforce and infrastructure," he said last year, adding that his trade policy "would start at home by working into strengthening our greatest asset – our middle class – would invest. " . This could mean that Biden isn't very quick to appoint his new sales representative either. If he does not win the Senate, his appointments will also take a little longer to confirm (since Republicans have control over all of the committees that are critical to confirming his candidates).
Because of this, the UK is hoping it can get an "oven-ready deal" that Biden doesn't need to waste energy on. And as we reported earlier, U.S. legislation that governs the way commercial invoices go through Congress expires in July. In order to be covered by this legislation and to ensure that the deal goes through Congress relatively quickly, lawmakers must be informed that the deal will be ready by April, and then come up with the text about a month later. British officials are still betting on that deadline. Let's hope they know how to bidenize quickly.
Will the British have jam in January? As the graph below shows, UK imports of fruit and vegetables from the EU usually peak in the first quarter – just like the customs chaos that comes from a brand new (or no) Brexit deal is likely worst, as Chris Rogers investigates The analyst at S&P Global Market Intelligence points out. This year was a bit unusual: imports fell more sharply than usual in the summer during the lockdown. Perhaps all those cans of beans that were stored in March are useful after all.
Tit for tat
Susan Danger, Managing Director of the American Chamber of Commerce in the EU, answers three questions with us.
Do you expect a UK-EU trade deal to be reached in the coming weeks and what do you think it will look like?
American companies remain very cautious, but are encouraged by recent statements from both sides. The negotiators should make the most of the remaining precious time to reach a deal. Remember, a no-deal scenario would be a disaster for companies of any size on both sides of the channel. It is in the interests of both sides to remove obstacles and ensure regulatory cooperation. I hope the deal will be as comprehensive as possible, within what is politically feasible. With citizens and businesses alike affected by a global pandemic, we need to limit the uncertainty caused by Brexit, maintain stability in financial markets and urgently focus on recovery and growth.
What is the best way to heal the transatlantic relationship in the face of recent trade tensions?
The EU and US need to focus on a positive trade and investment agenda and work together on common challenges such as WTO reform, digital standards and industrial subsidies. Taking a step-by-step approach – closing deals on specific topics – is the best way to build trust, strengthen the relationship, and ensure ongoing dialogue. I would like to warn against terms like “strategic autonomy”. The focus must be on intensive transatlantic cooperation, especially as we are all exposed to the effects of Covid-19. 16 million jobs on both sides of the Atlantic depend on the partnership between the EU and the US.
What is the most realistic path for the WTO that should please both the US and the EU?
Both the EU and the US agree on the need to reform the WTO, so cooperation remains the only way forward. I see three priority areas in the revision of the WTO rules. First, plurilateral talks should play a bigger role in negotiations between Member States. Second, the oversight function of the Secretariat should be strengthened in order to improve the way governments transmit communications to the WTO. Third, the EU and US should continue to discuss the future of the dispute settlement mechanism as it remains vital to the multilateral trading system.
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