Sunak kills talk of US-UK trade deal as digital hopes grow

WASHINGTON, D.C. — Rishi Sunak has admitted an overarching trade deal with the United States — once seen as Brexit’s biggest prize — is not a priority ahead of meeting President Joe Biden in Washington D.C.

The U.K. government previously promised a trade deal with the U.S. by 2022, but last year during her brief stint as prime minister, Liz Truss acknowledged it would not happen in the short to medium term.

Sunak’s words on the plane to the U.S. capital are the clearest acknowledgement yet that a free trade agreement between the two countries is out of reach.

“For a while now, that has not been a priority for either the U.S. or U.K.,” he said. “What we’re both focused on is making sure that our economic partnership reflects the particular challenges and opportunities of the time that we’re in right now.”

Talks with Biden will focus on economic security, he added, and “specific and targeted ways to improve trade between our countries.”

He declined to say if the promise of a full-fat deal has always been unrealistic, saying his priority was “making sure that our economic partnership reflects the opportunities and challenges of the time that we face now.”

The prospects of reaching an agreement have faded under the Biden administration and the two sides are now looking at other ways to boost business between the two countries.

High on the list is a narrower trade pact on critical minerals, which provide essential components in products such as electric vehicles, solar panels, flatscreen TVs and pacemakers.

Lobby groups on both sides of the Atlantic are also hopeful Sunak could target a digital deal with the U.S.

“We are still pushing on trade dialogues, in areas where there’s opportunities that can be outside of the FTA and digital is one of them.” said International Trade Minister Nigel Huddleston this week.

The U.K. government has approached business groups in the U.S. to sound out whether the Office of the United States Trade Representative (USTR) would be interested in negotiating a digital deal. 

The ingredients for the pact “have already been accepted by both the U.S. and the U.K. in other agreements that they’ve got,” said a Washington-based business representative, familiar with lobbying efforts, who was granted anonymity to discuss sensitive discussions.

The person pointed to the digital chapter in the United States-Mexico-Canada Agreement USMCA and the U.K.’s digital agreement with Singapore as examples of existing alignment.

Sunak will meet congresspeople at the Capitol Wednesday including House Speaker Kevin McCarthy, who is known to be sympathetic to closer trade ties with Britain.

However, a No. 10 official warned not to “read too much” into the meeting with the senior Republican.