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Despite lobbying from presidential candidates Joe Biden and Donald Trump, a trade deal with the US is unlikely to be a priority for a Labor government, officials said.
If Labour takes power, it would publish a white paper setting out Sir Keir Starmer’s plans for a free trade agreement within its first weeks of power, but sources said reaching an agreement with the United States would be “difficult”.
Jeremy Corbyn’s Labour party had opposed the deal with the US over concerns that American companies would demand access to the NHS and relaxed food standards.
Chancellor Rishi Sunak said last year that a trade deal with the US was no longer a priority after the Biden administration rejected the idea that a trade deal with the US could be concluded during his first term.
Starmer plans instead to focus on smoothing trade with Europe, but EU insiders have warned his plans may be too ambitious.
So far, trade has not been an issue in the general election, but lobbying from the United States has brought the issue into the campaign.
Jane Hartley, President Biden’s nominee for U.S. ambassador to the UK, said: POLITICOShe told Biden’s Power Play podcast last week that she expected a UK-US trade deal to be reached during Biden’s second term.
She said, “Personally, I’m a free trader. Would I personally like a free trade agreement? Yes, I would. But, you know, it has to be fair to both sides.”
Meanwhile, Trump has made it clear he is keen to strike a “very big trade deal” with the UK during his presidency.
Shadow Business and Trade Secretary Jonathan Reynolds said: “The UK is a proud trading nation and a Labour Government will work with our friends in the US to build an even closer trading relationship.”
If Labour wins the election, it will be expected to publish a white paper outlining Starmer’s plans for a free trade agreement within weeks of coming into power.
But Labour insiders say their priority, if they win on July 4, will be to secure a trade deal with the EU that falls within Starmer’s post-Brexit red lines, such as not rejoining the single market, not rejoining the customs union and not resuming free movement of people.
Despite these red lines, E.U. I Starmer would have to make choices that some Leave voters find hard to swallow, such as subjecting Britain to Brussels law and accepting oversight from the European Court of Justice in exchange for the veterinary agreement that is at the heart of his plans to facilitate cross-border trade – neither of which Labour has ruled out.
“We’re going to need a dynamic partnership and a court of justice — not because we like courts, but because the rules have to be enforced,” said a senior Brussels official involved in Brexit negotiations.
Meanwhile, a European Commission source said Labour may be overly ambitious about the possibilities.
“Maybe we’re getting our hopes up too high,” the source said.
The Commission also believes that concluding a veterinary agreement would include a role for the ECJ and a “dynamic alignment” between UK and EU regulations.
The veterinary agreement, which is overseen by the European Court of Justice, could face a dispute over breaching its terms and, if the European Court rules in Brussels’ favour, the UK could face sanctions from the EU, including trade tariffs.
Shadow minister Reynolds said the Conservatives were “too focused on a hollow deal that delivers no meaningful benefits for the UK”.
“Labour will get to the practical business of enabling Britain’s great businesses to export with targeted trade deals that are in line with the UK’s industrial strategy and economic strength,” he added.