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Wednesday, December 1, 2021

Brexit concerns hinder the U.S.-UK trade deal


As Washington is worried about London’s threats to change Northern Ireland’s post-Brexit trade rules, the United States is delaying the removal of Trump’s tariffs on British steel and aluminum.

Brussels and Washington have repeatedly warned London that unilateral changes to the EU-UK agreement to exit the EU in 2020 may threaten peace on the island of Ireland.

In a communication seen by the Financial Times, an official from the US Department of Commerce stated that negotiations with the UK on the relaxation of metal tariffs could not proceed.

The official cited the U.S.’s concern that the U.K. threatened to trigger Article 16, which is a safeguard clause in the post-Brexit Northern Ireland agreement. Goods destined for Northern Ireland are inspected.

The communication stated that Washington had informed the United Kingdom of the reasons for the obstruction. Three people familiar with the matter also said that after Congress put pressure on the British threat to trigger the clause, the negotiations were deadlocked.

The Boris Johnson administration has stated that if it fails to reach an agreement with Brussels, it will invoke Article 16 to alleviate the unfeasible restrictions on trade between the United Kingdom and Northern Ireland imposed by the agreement. Despite recent signs that Britain’s position has softened, Downing Street insists that the option is still under discussion.

The European Union and the United States agreed in October to suspend tariffs on steel and aluminum worth billions of dollars.

The agreement provides European manufacturers with 25% tariffs on steel and 10% tariffs on aluminum during the Trump era, but puts British steelmakers at a disadvantage because they still face high tariffs on American exports. Britain’s retaliatory tariffs on American bourbon and other products also still exist.

British whiskey importer Martha Dalton (Martha Dalton) co-founded the Bourbon Alliance (Bourbon Alliance) on behalf of the industry. She stated that the members of the alliance are “negotiating.” She added: “We are optimistic that the intermediary of transactions between the United States and the European Union will bring some positive news to our British member states.”

According to the Brexit Agreement, Northern Ireland will remain in the European Union’s single commodity market to prevent trade borders from appearing on the island of Ireland. On the contrary, all goods shipped from the UK to Northern Ireland must comply with EU regulations, which means increased paperwork and delayed shipments.

The European Union has recommended deregulation, but London said that these proposals are not deep enough, and instead threatened to trigger Article 16. If either party believes that the arrangement has caused “serious economic, social or environmental problems”, the UK or the EU can invoke this clause. Difficulty” or “Trade Diversion”.

This issue has attracted the attention of a large number of Irish diasporas in the United States Congress, who have repeatedly called on the United Kingdom to abide by the 1998 Good Friday agreement that ended the three-year conflict in the region. In November, senior Democratic lawmakers publicly warned that the United Kingdom threatened to trigger Article 16, threatening to disrupt trade relations and “hard-won peace.”

US President Joe Biden recently told Johnson in September that the post-Brexit dispute with Europe should not undermine peace on the island of Ireland.

The White House National Security Council insisted that there was “no connection” between the talks and Britain’s position on the Northern Ireland Protocol.

The Ministry of Commerce declined to comment on the communications seen by the Financial Times. It referred to an earlier statement stating that the United States and the United Kingdom “are in close consultations on bilateral and multilateral issues related to steel and aluminum.”

The Office of the United States Trade Representative stated that negotiations with the United Kingdom are ongoing.

The UK Department of Trade stated: “We believe that this particular issue has nothing to do with the Northern Ireland Agreement, and it will never affect British practices. This is because the agreement needs to be significantly modified to protect the Belfast (Good Friday) Agreement. And Northern Ireland’s position in the UK’s internal market.”

It added that the department “has regular discussions with U.S. Trade Representative Catherine Tay and Secretary of Commerce Gina Raimundo on this issue” and “focuses on reaching a resolution to remove destructive tariffs.”

British communications after Brexit

Learn about the latest developments after Brexit through original insights provided weekly by our public policy editor Peter Foster and senior writers from the Financial Times. Register here.

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