Liz Truss, the UK trade secretary, admitted on Thursday there would not be a UK-US trade deal any time soon — suggesting it would be “dangerous” to put a timeframe on the conclusion to the negotiations.
Speaking to a House of Lords committee, Ms Truss said: “We have never publicly stated a timeframe for the US deal and that is deliberate. We do not want our interlocutors to use time pressure against us.”
However, as recently as January officials were briefing that a deal could be struck between London and Washington by July.
Those hopes have since evaporated. This week the Financial Times reported that the UK government has abandoned the idea of reaching a trade deal with the US ahead of the presidential election in November.
Robert Lighthizer, Washington’s trade representative, recently played down the idea of any firm deal before Americans go to the polls.
Officials have blamed the Covid-19 pandemic for slow progress, with negotiations now taking place over video conferencing. The two sides will enter their third round of formal talks next Monday.
Meanwhile, senior politicians in the US have warned that the UK’s “punitive” new digital services tax will make it harder to strike a deal.
Chuck Grassley, the Republican chairman of the Senate finance committee, and Ron Wyden, the committee’s top Democrat, said that the tax “unnecessarily complicates the path forward for a US-UK trade deal”, and urged the UK to “reconsider this punitive action against its ally”.
Ms Truss said on Thursday that the two sides were making some progress in their negotiations: “Of course we want to realise the benefits of a positive deal with the US as soon as we can.”
But she added: “We are very clear that we will not sacrifice a good deal for speed.”
The trade secretary said the UK government would not drop its three main red lines that the taxpayer-funded NHS would not be opened up to US medical companies, food standards would not be undermined and farmers must benefit from any deal.
US negotiators want greater access to the British food market as a price for any agreement, which has prompted a backlash from UK farmers and MPs.
Formal government estimates suggest that a US trade deal would only benefit UK gross domestic product by between 0.07 and 0.16 per cent in the long term.
But Ms Truss said: “I don’t think a £15bn increase in trade and a £1.8bn increase in wages is to be sniffed at. There are significant economic benefits.”
The trade secretary said she had appointed Tony Venables, an Oxford university trade expert, to review its economic modelling of trade deals.
The current estimates for the economic benefits of a US-UK deal were based on 2011 figures and needed to be reconsidered “based on the post-Covid economy”, she added.
Ms Truss also gave no guidance over the prospects for an imminent trade deal with Japan, repeating her line about refusing to bow to time pressure.