Prime Minister Rishi sunak’s frustrations as he lands in Washington for a meeting with President Joe Biden to discuss economic ties .In London, James Politi, Lauren Fedor and Richard Waters are in Washington.
Insiders from the technology industry have warned that the UK’s hopes to secure a quick agreement to deepen digital trade relations with the US are in the sand due to the growing opposition to such pacts by Washington.
The frustrations of the sector were revealed as Prime Minister Rishi sunak arrived in Washington to meet with President Joe Biden. Both leaders are expected at this meeting to work towards closer economic ties.
Tech groups are hoping that London and Washington will move forward with a deal that boosts digital transactions even though they have for the moment ruled out discussions on a more extensive free Trade agreement.
The US and UK had agreed in April of last year to lay out a “road map” for deepening trade relations, which included “harnessing benefits of digital commerce”.
Critics say that the Biden Administration is soft-pedaling the prospects of a deal with the UK. This comes as lawmakers from the Democratic Party’s left are increasingly against provisions which would benefit large technology companies.
Sabina Cifu, head of the International Policy and Trade Programme for the lobby group TechUK, said: “The US is unwilling to engage in substantive digital trade negotiations because they have domestic political reasons.”
Under the former president Donald Trump’s leadership, the US included provisions that would boost digital trade within the USMCA deal with Mexico and Canada and signed a separate digital trade agreement with Japan.
These agreements included provisions that provided legal certainty about data flows, banned restrictive practices like requiring localisation of data and formalised co-operation among regulators.
Biden proposed a chapter on digital trade in the Indo-Pacific Economic Framework, his plan to strengthen US economic ties with the region. In a bad omen to proponents for a digital trade pact with UK, US business groups expressed concern that Biden was “waiving in its promotion of high standards for digital trade” within IPEF.
Biden is under fire from the left because he has even considered more open digital trade in the world. Last month, US Senator Elizabeth Warren , an influential Democrat in Massachusetts, , , , accused , the White House, of allowing “Big Tech’ companies to skew the digital trade rules, limiting the US government’s ability to promote and regulate the sector.
In the letter signed by six Democratic legislators, Warren said: “While we are grateful for your assurance that digital trade agreements will not interfere with the federal government’s ongoing work on technology policy, we are concerned that Big Tech is advocating an approach to digital commerce that will accomplish just that.” The US Trade Representative and the White House National Security Council declined comment.
A US official denied any connection between the Biden administration and pressure from legislators. The official said: “I strongly reject the idea that we are resisting the digital trade agreement with the UK because of Congress.”
The US does not rule out the possibility that deeper digital ties will be discussed over the next few months, as Biden and Sunak begin to define specific areas of improvement in their economic relationship.
Nigel Huddleston is the UK’s international trade minister. He told reporters at the sidelines of the Commonwealth Trade Ministers Meeting in London, this week, that “constructive discussions” are still taking place on digital trade.
A tech insider said that the UK might still be able to secure an agreement with the US regarding the digitisation of trade paperwork. Legislation is currently being passed through the UK Parliament. The US and UK may also agree to intensify their cooperation in addressing artificial intelligence. Legislation is already being passed through the UK parliament.
These would be far from a digital trading agreement, and technology and trade lobbyists both on the Atlantic coast are alarmed by the lack of progress.
“[This] [is] yet another example of [Biden]’s hands-off approach towards trade. “A US-UK trade deal would be an excellent opportunity to set a new benchmark for digitally-focused, modern and comprehensive trade in the 21st Century,” said Jason Oxman. He is the CEO of ITI.
Jake Colvin is the president of the National Foreign Trade Council in Washington. He said that it was no secret that Biden’s administration faces pressure to abandon US leadership regarding digital trade. He warned that this position would lead to “discrimination against US companies” “from Brussels to Beijing”.