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US and UK hoping to secure a quick trade deal as virus hammers global economy

07 May 2020

The United States and United Kingdom launched formal negotiations on a free trade agreement on 5 May, promising to work quickly to secure a deal that could counteract the worst economic impacts of COVID-19.

Reuters reports that the talks will be conducted virtually and include over 300 US and UK officials in nearly 30 negotiating groups. US Trade Representative Rob Lighthizer and UK Trade Minister Liz Truss are leading the efforts.

In a joint statement issued on Tuesday, they said:

"We will undertake negotiations at an accelerated pace and have committed the resources necessary to progress at a fast pace.”

"A Free Trade Agreement would contribute to the long-term health of our economies, which is vitally important as we recover from the challenges posed by COVID-19.”

The first round of talks began as new US data showed a record drop in US exports and a contraction in the vast US service sector for the first time in over a decade.

It is Washington's first major new trade negotiation in 2020. London has also been working out trade terms with the European Union following its exit from the bloc in January.

London's goal was to expeditiously complete both negotiations and there could be a positive dynamic between them, even though they are being headed by different lead negotiators, one UK official told journalists in a background briefing.

British Ambassador Karen Pierce told reporters it was "a very good sign of confidence in economic recovery" that the two countries were moving ahead with the talks.

Lighthizer, who has named the UK trade talks one of his top priorities for 2020, published objectives more than a year ago that sought full access for US agricultural products and reduced tariffs for US manufactured goods.

Lighthizer said in remarks released later that the pandemic "has shown that depending purely on cheap imports for strategic products can make us vulnerable in times of crisis" and that the United States needs a healthy manufacturing base and thriving farmers.

However, the parties are at odds over tariffs, including steel and aluminium duties imposed by Washington in 2018.

Asked about President Donald Trump's threat to impose more tariffs on China over its handling of the outbreak, Pierce said, "In general terms, tariffs are not particularly conducive to free trade, and we the Brits believe very much in free trade. It’s in our history, it’s in our DNA. The dispute between the US and China is for them to resolve.”

Republican US Senator Chuck Grassley of Iowa, another big critic of tariffs, said he hopes a strong agreement with the UK lays the groundwork for an improved trade deal with the EU, which has so far resisted US demands for increased agriculture access.

"If we get a good deal with the UK on agriculture, it's going to embarrass Europe," Grassley told reporters on a conference call.

Agriculture is expected to be one of the most difficult issues in the talks. The British public is strongly opposed to US genetically modified crops and chemical treatments for beef and poultry. Downing Street has vowed to drive a “hard bargain” and Truss has said that the UK would not diminish its food safety standards.

Trade in goods between the United States and United Kingdom was valued at $127.1 billion in 2018, with the two sides roughly in balance, while the services trade topped $134.8 billion. Britain is the seventh-largest US goods trading partner, after South Korea, according to the US Census Bureau.

Tuesday's opening plenary will be followed by virtual meetings from May 6 to 15. The UK official said while it was unusual to negotiate on all areas at once, the two sides were keen to move forward quickly.

Further rounds will take place approximately every six weeks and will be carried out remotely until it is safe to travel, the UK embassy said. There was no specific deadline for completing the talks, the official said.

Read more about this story here.



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