As the U.K. enters its fourth round of trade talks with the U.S. this week, Washington will be looking to push its own regulatory standards on the country, and drive it away from EU’s, an international trade policy expert has told CNBC.
Negotiators meet at a pivotal point in the U.K.’s path to establishing its post-Brexit trading relationship with the European Union. British Prime Minister Boris Johnson’s government has proposed an Internal Market Bill which will see it breach international law by violating Britain’s Withdrawal Agreement with the bloc.
The controversial legislation has led to divisions between the U.K. and Europe, and could provide an opportunity for the U.S. to push its own agenda.
Brian Pomper, international trade expert, lobbyist and partner at Akin Gump Strauss Hauer & Feld, said the overarching aim for the U.S. will be to pull the U.K. closer to its own regulatory worldview.
“To that end, a lot of the U.S. priorities go beyond just getting market access into the U.K., but rather are about setting a standard on issues where both countries are already high level, like on intellectual property, digital trade, and financial services. Ideally, the United States could then use this FTA model to pressure the EU,” Pomper told CNBC via email on Friday.
In the context of concurrent Brexit tensions, the U.K. could find itself in the center of a tug of war, with the EU and the U.S. both trying to pull it closer to their respective orbit on regulatory policy. Pomper suggested that far from merely being a pawn here, the U.K. is “smartly using that as leverage in negotiating with the United States.”
“On the other hand, the fact of Brexit means the U.K. really wants a deal (with the U.S.). A key question for the United States is going to be how much regulatory flexibility the U.K. provides itself,” he said. “The U.K.’s actions vis-à-vis customs checks on the Irish border also could have a very adverse effect on U.S. congressional consideration of the implementing bill.”
House Democrats have voiced staunch opposition to the Internal Market Bill’s changes to the Northern Ireland Protocol, an aspect of the Brexit Withdrawal Agreement designed to prevent a hard border in Ireland.
As well as broad regulatory alignment, the U.S. will be seeking key concessions on digital taxes against American firms, food standards and agriculture, all of which Pomper suggested have bipartisan support in Congress.