Transition 2020 | Biden and Trade: Renewed Transatlantic Relationships
President-Elect Joe Biden is expected to prioritize rebuilding transatlantic relations, after several years of elevated tensions on a number of trade priorities. US and European officials have traded barbs on a number of fronts – from World Trade Organization (WTO) reform to the long-standing large civil aircraft dispute, and from Section 232 national security tariffs on steel and aluminum to proposed and pending digital services taxes – leaving much ground to cover.
As part of his broader climate change agenda, President-Elect Biden has pledged that the US will rejoin the Paris Climate Accord on day one of his administration. This will realign the US with European countries’ climate change priorities and likely engender good will among America’s trading partners.
Addressing supply chain challenges due to the pandemic, especially for the pharmaceutical industry, is an area of possible transatlantic cooperation under the Biden Administration. While the President-Elect will focus first on addressing the coronavirus and its impact on the US economy, a dialogue on supply chains is in the interest of Washington, London, and Brussels. The Biden Administration will also engage with allies, including the United Kingdom (UK) and European Union (EU), when interests align with respect to China – such as addressing excess global steel capacity and WTO reform—but it also recognizes that some European countries do not view China as a “systemic rival.”
The US will remain on the sidelines as the UK negotiates its trade relationship with the EU. However, President-Elect Biden will be able to influence and shape a possible final US-UK free trade agreement, if inclined. Talks between the two countries will be fairly advanced by the end of this year, but are unlikely to conclude before Inauguration Day (January 20, 2021). These negotiations were initiated under Trade Promotion Authority (TPA) and given this authority expires on July 1, 2021, a deal must be finalized by the end of April to benefit from the law’s fast-track provisions. It remains unclear whether President-Elect Biden will seek TPA renewal before it lapses, if even a short-term extension to ensure congressional approval of the US-UK FTA.
President-Elect Biden’s campaign platform emphasized restoring historic partnerships, which includes the North Atlantic Treaty Organization (NATO), while further addressing new challenges, such as “weaponized corruption,” cyber theft, and issues in space and on the high seas. However, US officials are likely to continue calling for NATO member states to contribute at least two percent of their GDP to defense spending.