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What might the US election mean for a UK/US Free Trade Agreement?

 

While 'America First' is on its way out of the White House, with a divided Congress and conservative president, Chamber Policy Adviser, Tom Kennedy, asks will Joe Biden's election really change much?

After almost a week of votes trickling in across the United States, we finally have two pieces of certainty. Firstly, the vote counters of Tyne and Wear have much to teach their counterparts in Nevada and Pennsylvania. And secondly, Joe Biden will become the 46th President of the United States in January 2021.  

Much has been made of how as Donald Trump leaves the White House, there will be a return of ‘dignity’ and ‘global leadership’ to the presidency, but beyond a shift in tone, what will really differ from an international perspective with a Democratic victory in this election, and how will this impact a trade deal between the United States and the UK? 

The first significant change will probably be a shift to a more internationalist position and increased engagement with the international institutions that Donald Trump retreated from. Joe Biden pledged from the start of his campaign that within his first 100 days in office, the United States will rejoin The Paris Agreement on climate change. We may also see the United States engage more constructively with the World Trade Organisation, a body that the Trump White House routinely ignored and criticised. A more open and outward-facing United States will be good news for businesses wishing to expand into the US, and will certainly be promising for those looking to work internationally to face the greatest challenges of the day such as climate change and the recovery from COVID-19. 

As Biden attempts to de-toxify the United States in the eyes of some of its international partners, we may see some statements that attempt to move the White House away from the more radical ‘Make America Great Again’/’America First’ messaging that was a part of Trump’s success. Beyond this however, it appears unlikely that there will be much significant change when it comes to trade policy and especially a future UK-USA Free Trade Agreement for a few reasons. 

Most obviously, while Joe Biden has handily won the presidential election, a disappointing performance by Democrats further down the ballot means that the Republicans have held on to their control of the Senate and reduced the Democrat’s control in the House of Representatives. It is clear then, that any large-scale policy proposals put forward by the Democrats will face resistance from Republicans in both houses of Congress. 

Joe Biden has also never claimed to be a political radical, clearly positioning himself throughout the election as more moderate than both his Democratic colleague Bernie Sanders as well as Donald Trump. Biden has a long history in Congress as a ‘unifier’ and a relatively conservative figure who reaches across the aisle to Republican lawmakers, doing little to suggest that wholescale change is something he would be interested in, even if he had control of every organ of government.

When it comes to a trade deal between the UK and the US, Biden has been very clear. Any deal between the two will be dependant on the UK respecting the terms of the Good Friday Agreement. Biden has made proud references to his Irish ancestry throughout his career and has voiced his frustration at the UK government’s recent attempts to unilaterally alter provisions for the Northern Irish border, through the Internal Market Bill and upcoming Finance Bill. These are issues that are also stalling negotiations between the UK and the European Union. It appears that if there is to be any trade deals between these parties then Britain will need to either abandon its current plans on Northern Ireland to appease both the US and the EU, or face no agreements at all. 

If the concerns over Northern Ireland were reconciled, it is also hard to see how the content of a US-UK free trade deal would be very extensive. As well as the situation in Congress already mentioned, there will be other domestic political matters that mean a Biden administration will want to avoid largescale concessions in trade negotiations. While a Biden White House will want to move away from ‘America First’ to an extent, and demonstrate the US as open and welcoming to foreign business, Biden’s victory came through the states that supported Donald Trump and his message in 2016 such as Michigan, Wisconsin and Pennsylvania; the so-called Rust Belt. He will therefore be wary of signing a deal that significantly drops tariffs and liberalises trade with international partners, which will almost certainly be spun by Republican rivals as an attack on the businesses and workers in these states that Biden attempted to win back to the Democrats in 2020. 

Overall, a Biden presidency will certainly mean a more outward looking United States, with international cooperation on climate change the biggest change from the Trump administration. When it comes to trade on the other hand, don’t hold your breath if you expected that bumper UK-USA trade deal that we were told was the golden prize of Brexit. Any deal is likely to include only small-scale improvements, be dependant on the Brexit outcome and will be bound by the domestic politics of the United States.