Joe Biden warning dashes UK hopes of early US trade deal
Britain’s hopes of securing an early trade deal with the US have been dashed by a warning from Joe Biden, the president-elect, that America will not sign a trade deal with anyone until the US has sorted out its competitiveness.
Britain had been closing in on a trade deal with the administration of Donald Trump, a fierce opponent of the European Union, but Biden has said in a New York Times interview that his priorities will be to improve investment in US manufacturing and the protection of American workers.
“I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers and in education,” he said.
Some supporters of Brexit had touted a US trade deal as one of the early benefits of leaving the EU and its customs union, although the economic value of such a deal had been questioned.
Biden told the New York Times: “I want to make sure we’re going to fight like hell by investing in America first.” He named energy, biotech, advanced materials and artificial intelligence as areas ripe for large-scale government investment in research.
The remarks underline the extent to which leading Democrats have retreated from a wholesale embrace of globalisation, and insist US foreign policy must give greater priority to America’s domestic interests.
The UK Foreign Office and the trade department still have a number of trade deals in the offing, and may look for a deal with Asia-Pacific nations as a way of filling the vacuum likely to be created by Biden’s priorities. The UK cannot formally engage with the new administration until his inauguration in January, but it has been making contacts with senior Democrat senators.
Biden also suggested the best route to gaining leverage over trade with China lay in building alliances to compete with it. Biden said his “goal would be to pursue trade policies that actually produce progress on China’s abusive practices – that’s stealing intellectual property, dumping products, illegal subsidies to corporations” and forcing “tech transfers” from US companies to their Chinese counterparts.
He said that leverage could be built by building a domestic consensus in favour of domestic investment, including in US semiconductors.
He said he would not be lifting any tariffs on China at this stage, but instead conducting a review. “The best China strategy, I think, is one which gets every one of our – or at least what used to be our – allies on the same page. It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies.”
The EU has already sent a note to the Biden team seeking a common strategy on China.
Biden also for the first time since his election made clear that he was committed to trying to bring the US and Iran back into compliance with the existing nuclear deal signed in 2015 before trying to negotiate an update or expansion of the deal. Donald Trump took the US out of the deal in 2018, imposing heavy economic sanctions. Iran has responded by loosening its commitments under the deal on stockpiles of enriched uranium, but has allowed UN inspections of its nuclear sites to continue.
Some have argued that Biden should not lift the crippling US sanctions until Iran has committed to a wider deal that includes its missile programme, regional behaviour and updates some of the commitments in the existing deal.
Biden said: “Look, there’s a lot of talk about precision missiles and all range of other things that are destabilising the region.” He added that the best way to achieve stability in the region was to deal “with the nuclear programme”.
If Iran got a nuclear bomb, he added, it put enormous pressure on the Saudis, Turkey, Egyptand others to get nuclear weapons themselves. “And the last goddamn thing we need in that part of the world is a buildup of nuclear capability,” he said.
Then, Biden added: “In consultation with our allies and partners, we’re going to engage in negotiations and followon agreements to tighten and lengthen Iran’s nuclear constraints, as well as address the missile programme.” He added he would like more than the existing signatories to the present deal – France, Germany, the UK, Russia and
China – to be signatories to any new deal, but for other regional players Saudi Arabia and the United Arab Emirates to be onboard.
He said that the US, once back in the deal, could call for the snapback of UN sanctions if it deemed Iran was still not in compliance its terms, something he said Iran knew.