Brexit fears hold back US-UK trade deal

The US is delaying a deal to remove Trump-era tariffs on British steel and aluminum because of Washington’s concerns about London threatening to change post-Brexit trade rules in Northern Ireland.

Brussels and Washington have repeatedly warned London that unilaterally changing the EU-UK agreement that has prevented Britain’s exit from the bloc in 2020 could threaten peace on the island of Ireland.

In an exchange with the Financial Times, a US commerce department official stated that negotiations with the UK on easing metal tariffs cannot take place in the immediate future.

The official cited US concerns over British threats to trigger Article 16, a self-defence clause in the post-Brexit Northern Ireland protocol that partially overrides the UK’s departure from the EU and will suspend checks on goods going to Northern Ireland from the rest of the UK. .

Washington informed the UK of the reason for the delay, media said. Three people familiar with the matter also said talks had stalled following pressure from Parliament over the UK’s threat to trigger the provision.

Boris Johnson’s government has said it will invoke Article 16 if an agreement is not struck with Brussels to ease unenforceable restrictions on trade between the UK and Northern Ireland imposed by the protocol. put. Despite recent signs that the UK has soften it stance, Downing Street asserts that options are still on the table.

EU and US agree to suspend tariffs on billions of dollars of steel and aluminum in October.

The deal eases the Trump-era tariffs of 25% on steel and 10% on aluminum for European manufacturers, but puts British steelmakers at a disadvantage as they are still subject to the tariffs. High taxes on goods exported to the US. The UK’s retaliatory tariffs on US bourbon whiskey and other products are also in place.

Martha Dalton, a whiskey importer in the UK who co-founded the Bourbon Alliance to represent the industry, said that union members are “deeply concerned about the lack of upper mobility. . . negotiate “. “We are optimistic that brokering a US-EU deal will lead the way to some positive news for our UK-based members,” she added.

Under the Brexit deal, Northern Ireland remains the EU’s sole market for goods to prevent a border trade on the island of Ireland. Instead, all goods traveling from the UK into Northern Ireland are subject to EU rules, which means increased paperwork and delays in shipments.

The EU has offered to relax controls but London said the proposals did not go far enough and instead threatened to trigger Article 16. The clause could be invoked by the UK or EU if either The two sides believe that the agreement has caused “serious economic, social or environmental difficulties” or “diversion of trade”.

The issue has attracted significant Irish diaspora attention in the US Congress, which has repeatedly called on the UK to respect the 1998 Good Friday Agreement that ended the long-running conflict three decades of the region. In November, senior Democratic Party lawmakers publicly warned that by threatening to trigger Article 16, the UK was threatening to destabilize trade relationships and “difficult peace”. earn”.

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

The National Security Council at the White House insists that there is “no link” between the negotiations and the UK’s position on the Northern Ireland protocol.

The commerce department declined to comment on communications seen by the FT. It referred to an earlier statement that said the US and UK were “in close consultation on bilateral and multilateral issues relating to steel and aluminum”.

The Office of the US Trade Representative said negotiations with the UK were ongoing.

The UK trade department said: “We do not see any link to this particular issue and the Northern Ireland protocol and it will not affect the UK’s approach. That’s because significant protocol changes are needed to protect the Belfast (Good Friday) deal and Northern Ireland’s place in the UK internal market. ”

It added that the department had “regular discussions with both US trade representative Katherine Tai and commerce minister Gina Raimondo on this matter” and remained “focused on agreeing a solution that shows harmful tariffs are eliminated”.

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