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US trade would not be priority for Labour despite Biden’s enthusiasm

A trade deal with the United States would not be a priority for a Labour government despite overtures from presidential candidates Joe Biden and Donald Trump, insiders have said.

A Labour government would publish a white paper setting out Sir Keir Starmer’s plans for free trade deals within weeks of taking office if the party wins power but an insider said an agreement with the US would be “difficult”.

Under Jeremy Corbyn’s leadership, Labour opposed a deal with the US due to fears American firms would demand access to the NHS and a watering down of food standards.

Prime Minister Rishi Sunak last year said a US trade deal was no longer a priority after the Biden administration rejected the idea it could be done in his first term.

Starmer instead plans to focus on smoothing trade with Europe, although he has been warned by EU insiders that his plans may be too ambitious.

Trade has not been a battleground in the general election so far but overtures from the US have thrust the issue into the campaign.

US ambassador to London, Jane Hartley, a Biden appointee, told Politico‘s Power Play podcast last week she hoped a UK-US trade deal could happen in a second Biden term.

She said: “Personally, I’m a free trader. Would I personally have liked a free trade deal? Yes, I think I would have but, you know, it has to be fair to both sides.”

Trump meanwhile made clear when serving as president that he would be keen to sign a “very big trade deal” with the UK.

A Labour government would publish a white paper setting out Starmer’s plans for free trade deals within weeks of taking office if the party wins the election.

However, Labour sources said the party’s priority, if it wins on 4 July, would be to secure a trade agreement with the EU within Starmer’s post-Brexit red lines, which include not rejoining the single market or customs union, and no return to free movement of people.

Despite those red lines, EU insiders told i Starmer will have to make choices that may be unpalatable to some Leavers, such as aligning with Brussels law and accepting oversight of the European Court of Justice (ECJ) – neither of which Labour has ruled out – in return for a veterinary agreement he has put front and centre of his plan to ease cross-border trade.

A senior Brussels official who was involved in the Brexit negotiations said: “You would have to have dynamic alignment and the court of justice, not because we love the court but you have to enforce the rules”.

A European Commission source meanwhile said Labour may be guilty of over ambition about what is possible.

“They may be raising expectations too high,” the source said.

The Commission also believes that signing a veterinary agreement would include a role for the ECJ and “dynamic alignment” between British regulations and those of the EU.

A veterinary agreement involving ECJ oversight could see the UK being hit with sanctions by the EU such as trade tariffs if there was a dispute over the terms of the deal being breached and European judges ruled in Brussels’ favour.

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