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What a Biden presidency means for Britain

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·5-min read
Democratic U.S. presidential nominee Joe Biden makes a statement on the 2020 U.S. presidential election results during a brief appearance before reporters in Wilmington, Delaware, U.S., November 5, 2020. REUTERS/Kevin Lamarque     TPX IMAGES OF THE DAY
US President Joe Biden making a statement on the 2020 U.S. presidential election results in Wilmington, Delaware, U.S., on November 5, 2020. Photo: REUTERS/Kevin Lamarque

A Joe Biden presidency will likely scuttle attempts to secure a quick UK-US trade deal, experts say, but could be good news for Britain’s green energy ambitions.

Joe Biden is set to be sworn in as the 46th President of the United States on Wednesday, ending Donald Trump’s four year stint in the White House.

International leaders will be quick to forge ties with the new administration and no more so than Britain. The UK is hoping to land a quick and comprehensive free trade agreement that will be the feather in the cap of post-Brexit Britain.

However, Downing Street will have to work hard to win over the Biden administration. The shifting tectonic plates of international politics mean the “special relationship” runs the risk of being overlooked in favour of closer ties with the EU.

President Donald Trump speaks before boarding Air Force One at Andrews Air Force Base, Md., Wednesday, Jan. 20, 2021.(AP Photo/Manuel Balce Ceneta)
President Donald Trump speaks before boarding Air Force One at Andrews Air Force Base, Md., Wednesday, Jan. 20, 2021. Photo: AP Photo/Manuel Balce Ceneta

Biden trace his roots back to Ireland and is well-known for the pride he takes in his heritage. Recent food shortages reported in Northern Ireland supermarkets are unlikely to make Biden sympathetic to trade talks.

The new president is also no great fan of UK Prime Minister Boris Johnson. He called him a “clone” of Trump in 2019 and Biden views Brexit as a mistake. All of that lengthens the odds of securing a quick trade deal.

Beyond ideological issues, Biden will also be distracted. He has announced plans for a $1.9tn (£1.39tn) stimulus package to help the US “build back better” from COVID-19. Ensuring the money is spent well and recovery takes hold will be time consuming.

“I am still doubtful whether there will be a bespoke US-UK agreement before the midterm elections in 2022,” former Vote Leave chief executive Matthew Elliott wrote in a note this week for stockbroker Shore Capital, where he is a political advisor. “The immediate focus for Biden’s team will be on tackling Covid and restoring the US economy.”

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A key focus for Downing Street will be emphasising common ground between the UK and US on issues like climate change and COVID.

The transition team have said the US will rejoin the World Health Organisation (WHO) and the UN Paris Climate Agreement shortly after Biden is sworn in. He had publicly stressed the urgent need to tackle climate change.

“From climate change to trade and security, our two countries share a close bond and special relationship,” UK foreign secretary Dominic Raab said on Wednesday.

READ MORE: European stocks rise as EU chief declares: 'The United States is back'

Biden’s focus on the climate dovetails with the UK’s ambitions. Britain was the first country to legislate to become net carbon neutral by 2050 and later this year will host the COP26 UN Climate Summit in Glasgow. Green energy and finance are seen as a key growth area for the UK post-Brexit.

“The UK government will quickly look to demonstrate its capacity for environmental leadership with Biden in the White House,” said John David, head of Rathbone Greenbank.

Biden and Johnson are also aligned on China, which is one area of policy where Biden doesn’t plan to rollback Trump’s work. Downing Street has in the past year stood up to Huawei and promised action on China’s treatment of Uighur Muslims.

Still, UK-US relations under Biden begin from a frostier position than under Trump.

READ MORE: Biden warns no post-Brexit US-UK trade deal on a major condition

Trump loved deal making and repeatedly talked up the prospects of a quick agreement after Brexit, even if all it ever amounted to little more than talk. He approvingly called Johnson “Britain’s Trump” when he entered Downing Street.

Biden, meanwhile, last year threatened to veto a US trade deal if Brexit resulted in a hard border on the island of Ireland.

Britain's Prime Minister Boris Johnson leaves Downing Street to attend the weekly session of PMQs in parliament in London, Wednesday, Jan. 20, 2021. (AP Photo/Kirsty Wigglesworth)
Britain's Prime Minister Boris Johnson leaves Downing Street to attend the weekly session of PMQs in parliament in London, Wednesday, Jan. 20, 2021. Photo: AP Photo/Kirsty Wigglesworth

The EU, sensing the opportunity, has been lobbying hard to win Biden over. Last month it released a statement saying Biden’s presidency was a “once-in-a-generation opportunity to design a new transatlantic agenda.” EU president Ursula von der Leyen tweeted on Wednesday: “Europe stands ready. To reconnect with an old and trusted partner, to breathe new life into our cherished alliance.”

Closer ties between the US and EU would no doubt push a UK-US trade deal further down the White House’s agenda.

There is hope for Boris and Britain yet, though. The Sunday Telegraph reported that Biden is planning to make Britain his first overseas visit and is willing to put aside his differences with the prime minister.

Elliott said a trade deal of some sort may not be totally off the agenda.

“Closer trade ties might have come sooner had President Trump been re-elected, but they shouldn’t be ruled out under President Biden,” he said. “They might take longer to establish, but if they come, they will likely come as part of a bigger deal.”

The UK could secure a deal as part of a multilateral — rather than bilateral — agreement, Elliott said. Options include a revived TTIP – the Transatlantic Trade and Investment Partnership between the US and EU, which was abandoned by Trump — or the CPTPP — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which provides a free-trade zone for developed economies like Australia, Canada, and Japan and emerging economies such as Chile and Mexico. UK trade minister Liz Truss on Wednesday said Britain was close to submitting its application to join CPTPP.

Any chance of securing better trading terms with the US — the world’s biggest economy — will be the most import matter for British businesses. Relations between Boris and Biden will be closely watched.

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