Hopes are fading that the UK and US can strike a trade deal before the presidential election in November amid growing claims talks with the EU on a post-Brexit agreement are set to fail.
Both Downing Street and the White House were aiming to get a trade deal finalised before Donald Trump seeks re-election later this year.
But Number 10 today would not commit to a specific timetable for the talks to conclude, instead saying the aim is to strike a deal ‘as soon as we can’.
Meanwhile, the ‘working assumption’ within the Government is now said to be that Britain and Brussels will not be able to agree the terms of their future relationship before the end of the Brexit transition period.
The Government has said it does not want talks with the EU to drag on into the autumn, leaving just a matter of weeks to get the deal done.
But ‘significant differences’ still remain between the two sides on key issues like fishing rights and to what extent the UK will agree to abide by EU rules.
The chances of a quick trade deal being struck between the UK and US had been initially talked up by both sides.
But the Prime Minister’s spokesman said today: ‘I think the discussions between Liz Truss and her counterpart have been constructive.
‘I think we are heading towards round three and I think they continue to make good progress.’
Asked if the Government had abandoned hopes of getting a deal done before the November election, the spokesman said: ‘I think what we have always said is we want to get a deal which works in the best interests of the United Kingdom and the United Kingdom’s consumers.
‘I don’t think we have put a specific timeframe on it. We have said that we want to get the right deal for the UK and to do that as soon as we can.’
There are concerns that failing to get a deal done before November could see talks kicked into the long grass – especially if Mr Trump does not win.
The latest round of negotiations between the UK and the EU are due to conclude tomorrow with Michel Barnier leading for Brussels and David Frost for Britain.
Number 10 played down the prospect of an imminent collapse in negotiations, with insiders saying the talks were ‘neither at a breakthrough nor a breakdown’.
But the Daily Telegraph reported the Government’s ‘working assumption’ is now that Britain will trade with Europe on World Trade Organisation terms – without a UK-EU deal – after the transition period ends on December 31.
Downing Street insisted that talks so far have been ‘constructive’ but acknowledged that ‘significant differences’ still remain.
The Prime Minister’s Official spokesman said: ‘Round five negotiations are ongoing and we remain committed to working hard to finding the outlines of a balanced agreement.
‘We have been clear that discussions throughout this intensified process have continued to be constructive but significant differences still remain on a number of important issues.
‘Our preference is to leave with an FTA as long as it guarantees our political and economic independence. But we will make sure that we are prepared for all possible scenarios.’