What Truss’s US trade deal U-turn is really about

Farewell to the UK/US trade deal. That’s the news from Liz Truss’s trip to the UN assembly in New York. The Prime Minister has told hacks on the flight over that the UK will not strike an agreement with America for many years. The former international trade secretary suggested that talks were unlikely to even start in the medium term: ‘There isn’t currently any negotiation taking place with the US and I don’t have an expectation that those are going to start in the short to medium term.’ The comments come ahead of her first proper meeting with Joe Biden since becoming Prime Minister.

Her comments have caused quite a stir back home. A trade deal with the US has long been viewed by Tory Brexiteers as something to strive for. What’s more, Truss is known to have been one of the most passionate advocates of such a deal. When she was International Trade Secretary it led to clashes with Downing Street. Truss wanted to push for an agreement as soon as possible but Boris Johnson’s aides believed any talk of one was politically toxic ahead of the 2019 election. They believed that just the mention of one would allow Labour to spend the election warning about chlorinated chicken. Still, Truss pressed on – when she visited Washington in the summer of 2020 to meet with her American counterpart Robert Lighthizer, she raised the issue in their meeting.

It also led to cabinet tensions. As I reported at the time, a divide formed in cabinet between the ‘Waitrose protectionists’ and the ‘Lidl free marketeers’. ‘We’re in real danger of a once-in-a-lifetime chance to do a trade agreement with the United States being hijacked by a bunch of Waitrose protectionists,’ a senior Tory supportive of Truss told me at the time. The Waitrose set have now been disbanded – Michael Gove and George Eustice are out of government. The other member of the so-called axis of evil Zac Goldsmith has been relieved of his Defra brief.

So, why is Truss now playing down the idea of a prized trade deal? Ultimately it’s down to reasons largely out of her control. While Donald Trump frequently talked up the idea of a US/UK trade deal, his successor Joe Biden is cooler on the idea – playing down the chances of one previously. What’s more, UK is on course to join the Comprehensive and Progressive Agreement for Trans Pacific Partnership. This group includes Australia, Canada and Japan and the US could join later down the line – if so, this is viewed as the easiest way for the UK to increase trade with the US. Second, the protocol. Truss has made fixing the Northern Ireland protocol a key priority. Her plan to do this – unilaterally changing parts of the protocol through domestic legislation – has led to criticism in Brussels and Washington. One of the things US politicians – including Biden – can threaten in response to the UK pressing ahead with its plans is that it will hurt the prospect of a UK/US trade deal. By publicly acknowledging such an agreement is not on the horizon, it makes it harder to do so.