The Obama administration has warned British officials that if the UK leaves Europe it will exclude itself from a US-EU trade and investment partnership potentially worth hundreds of billions of pounds a year, and that it was very unlikely that Washington would make a separate deal with Britain.
The warning comes in the wake of David Cameron's visit to Washington, which was primarily intended as a joint promotion of the Transatlantic Trade and Investment Partnership (TTIP) with Barack Obama, which the prime minister said could bring £10bn a year to the UK alone, but which was overshadowed by a cabinet rebellion back in London.
With formal negotiations expected to start within weeks, the state department already has hundreds of staff working on the partnership. Sources at US-UK meetings in London last week said American officials made it clear that it would take a monumental effort to get TTIP through a suspicious Congress and that "there would very little appetite" in Washington to do it all again with the UK if Britain walked out of Europe.
"Having Britain in the EU … is going to strengthen the possibility that we succeed in a very difficult negotiation, as it involves so many different interests and having Britain as a key player and pushing for this will be important," a senior US official said. "We have expressed our views of Britain's role in the EU and they haven't changed. TTIP negotiations underscore why we think it's important that it continues."
US officials say that the White House is particularly perplexed because Britain played a key role in persuading Obama to stake significant political capital on the ambitious transatlantic partnership. If it is successful it could be the biggest trade and investment deal in history, encompassing half the world's GDP and a third of its trade.
On both sides of the Atlantic there is hope that the boost provided by removing remaining barriers to US-EU trade and investment — worth about $1bn (£660m) and $4bn respectively – would help lift the west, and then the global economy, out of the doldrums.
Addressing the Senate last week, the US under-secretary of state for economic growth, energy and the environment, Robert Hormats, said the TTIP "is, in many respects, a once-in-a-generation opportunity to reshape our relationship with the European Union". Hormats added it "will enhance our ability to build stronger relationships with emerging economies in Asia and elsewhere around the world".
Both European and American officials involved in preparatory talks on the partnership said that it was also intended as a bulwark against the economic challenge of China, aimed at forming a bloc powerful enough to lay down the rules of international trade and investment.
