Free trade deal could boost U.S. economy post pandemic
The United States and the United Kingdom have opened up negotiations over a free trade deal that both sides agree could help their economies recover from the coronavirus pandemic.
Business leaders and advocacy groups are urging speed in cementing the pact. Strong investment ties and tariff-free trade greatly benefit both economies.
In 2018 alone, nearly $262 billion in goods and services were traded between the two economies, supporting 2.75 million jobs on both sides of the Atlantic.
“U.S. firms have invested more than $750 billion in the U.K., and the American business community has a significant interest in ensuring the future stability and growth opportunities of the UK economy,” the U.S. Chamber of Commerce said in a document outlining recommendations for the negotiations.
Marjorie Chorlins, executive director of the chamber’s U.S.-U.K. Business Council said deepening trade and investment ties will allow both economies to demonstrate their leadership together and build on their shared strengths in services, the digital economy, advanced manufacturing, life sciences, the creative arts and other sectors.
Council members are working with negotiators from both sides to secure a “gold standard trade agreement that benefits workers, farmers, and citizens,” Chorlins said.
No deal puts companies at risk
No deal, meanwhile, could put businesses at risk. Particularly small- and medium-sized companies that may not survive a new round of punishing trade tariffs on top of the COVID-19 shutdowns, said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.
Arizona has much at stake in the ongoing negotiations, he said. In 2018, Arizona businesses exported $928 million worth of goods and services to the U.K., making it one of the state’s top trading partners.
The state’s key exports to the U.K. include transportation and aerospace equipment, computer and electronic products, manufactured machinery, agricultural products, and minerals and ores, according to the International Trade Administration.
Thousands of Arizona jobs also are connected to or generated from investments by U.K. companies, Hamer said. Many are high paying positions in manufacturing, chemicals, pharmaceuticals, information technology, financial services and other sectors.
Trade deal goal: “commercial continuity” as U.K. leaves the EU
Among the goals of the trade agreement are to cooperate on global issues, strengthen trade and investment, and provide commercial continuity for businesses, workers and consumers as the U.K. leaves the European Union (EU), according to the Office of the U.S. Trade Representative.
U.S. Trade Representative Robert Lighthizer and U.K. International Trade Secretary Liz Truss kicked off the trade talks last month with a large cadre of staff and experts. They are to meet every six weeks.
They will need to hammer out rules for digital trade and cross border data, rules of origin, sanitary and phytosanitary measures, competition, regulatory standards, and more.
Both the U.S. and the U.K. want a full deal, not a phased-in agreement or mini pacts.
Among its wants, the U.S. is seeking global standards for regulations on how cars and other products are produced. It’s also pushing for more access for its pharmaceutical and healthcare companies.
The U.K. is seeking more access for U.K. goods and services in the U.S. for accountancy, agriculture, architecture and financial services.
Mitigating damage from the pandemic will be a top goal, the trade officials said in a joint statement.
“Both parties agree that a Free Trade Agreement (FTA) would contribute to the long-term health of our economies, which is vitally important as we recover from the challenges posed by COVID-19,” it states. “An FTA is a priority for both countries and we share a commitment to secure an ambitious agreement that significantly boosts trade and investment. We will undertake negotiations at an accelerated pace and have committed the resources necessary to progress at a fast pace.”
Business priorities for successful deal
The U.S. Chamber’s U.S.-U.K. Business Council released a list of priorities for these talks, underlining areas where “robust agreement will benefit both sides. ”
Among the council recommendations:
Trade in industrial goods: Eliminate all tariffs on industrial goods traded between the U.S. and the U.K., include a high-standard chapter on technical barriers to trade to address non-tariff barriers, and expand market access for remanufactured goods exports by ensuring that they are not classified as used goods that are restricted or banned.
Trade in services: Secure high standard rules and open market access commitments to ensure access to the U.S. and UK services markets, including obligations for new services.
Trade in agricultural products: Address market access through tariff elimination and by resolving concerns about non-science-based restrictions on agricultural trade with a high- standard chapter on sanitary and phytosanitary measures.
Protect intellectual property: Address intellectual property rights and enforcement as they relate to patents, copyrights, trademarks, and trade secrets to enhance U.S. and U.K. leadership in innovative industries.
Protect investment: Eliminate forced technology transfers, reduce barriers to foreign direct investment by ensuring non-discriminatory treatment, ensure a high standard of protection for U.S. investors subject to an investor-state dispute settlement mechanism.
Emerging technologies: Promote effective regulatory cooperation to address emerging technologies and prevent unnecessary regulatory divergence.
Digital trade: Facilitate a mutual right to transfer and store data across borders for all sectors, prohibit data localization requirements, ban customs duties and taxes on electronic transmissions, promote risk-based approaches to cybersecurity, foster cloud use across sectors, ensure non-discriminatory and interoperable frameworks for the protection of personal information, and align any plans to tax digital services with international tax regimes.
Procedural fairness for pharmaceuticals and medical devices: Seek standards to ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are nondiscriminatory, and provide full market access for U.S. products.Section 232 Tariffs: Remove the U.S. Section 232 tariffs on imports of steel and aluminum from the U.K.
This story was originally published at Chamber Business News.