[CTC] U.S., UK addressing all chapters of a possible trade deal in first session

Tue May 5 18:14:21 PDT 2020

U.S., UK addressing all chapters of a possible trade deal in first session

Inside US Trade

The U.S. and United Kingdom formally kicked off bilateral trade
negotiations on Tuesday, aiming to initiate talks in all chapters of a
comprehensive agreement over the next two weeks.

The start of the talks was delayed by the pandemic and the first session is
being held virtually. Subsequent sessions will be held about every six
weeks, according to British officials, and will be virtual until
circumstances allow otherwise.

The two sides will be “engaging in discussions over the next two weeks in
nearly 30 different negotiating groups covering all aspects of a
comprehensive trade agreement,” the countries said in a joint statement on
Tuesday. “Both parties agree that 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.”

In the statement, U.S. Trade Representative Robert Lighthizer said the U.S.
and UK plan to negotiate an “ambitious and high-standard trade agreement”
that will be “consistent with U.S. priorities and the negotiating
objectives established by Congress.” USTR released its negotiating
objectives last year and the UK followed suit in early March
<https://insidetrade.com/node/168308>.

UK Secretary of State for International Trade Liz Truss called for an
“ambitious” agreement in her statement and said a deal between the two
countries would help both “bounce back from the economic challenge posed by
coronavirus.”

“Both governments are committed to maintaining high levels of health,
safety, and environmental protection that will serve as a model free trade
agreement for the world,” the statement said.

The two sides have not set an official deadline for talks, although British
Trade Commissioner for North America Antony Phillipson told reporters on
Tuesday that the UK was “very, very conscious” of the upcoming U.S.
elections. He added that the countries had committed not to be driven by
that timeline. Phillipson also noted that Trade Promotion Authority in the
U.S. is set to expire next summer.

The UK is on a separate end-of-the-year deadline in its post-Brexit trade
talks with the European Union.

UK Ambassador to the U.S. Karen Pierce told reporters on Tuesday that the
two sides aimed to conclude the negotiation “expeditiously” and would work
to progress “all chapters simultaneously,” at least for this first round.

Phillipson acknowledged the plan was unusual. “We will be using this first
round to actually launch talks in all chapters together and see how quickly
we can move forward on all fronts, which is not the normal way of doing it,
but since we both have a shared ambition of moving expeditiously, that’s
what we will do,” he said. “But I’m not aware of any chapters we will not
discuss in this first round.”

Following the first round, he said he expected the lead negotiators --
Assistant USTR for Europe and the Middle East Dan Mullaney and Oliver
Griffiths, director for U.S. negotiations at the UK Department for
International Trade -- would “take stock” of which issues could be resolved
quickly and which might require more time to hash out before running them
up the flagpole to Lighthizer and Truss.

Phillipson and Pierce highlighted the robust trade relationship between the
U.S. and UK and touted what they see as opportunities to make quick
progress given the two countries’ similar economic approaches. They cited
digital trade as an area in which a U.S.-UK deal could set global standards.

*The two sides are likely to clash in a few areas, particularly in
agriculture.* The U.S. will demand additional access for products that
Europe has resisted for years, much to the frustration of several U.S.
administrations. The UK will remain part of the EU regulatory regime
through December, but British officials have indicated the UK’s new rules
will not relax standards on food safety and animal welfare. The U.S.
Agriculture Department’s Foreign Agricultural Service also has said it does
not expect openings for agriculture biotechnology in the UK in the near
term.

Senate Finance Committee Chairman Chuck Grassley (R-IA) on Tuesday said he
would like to see a U.S.-UK deal that opened up the UK market to
genetically modified food and hormone-treated beef. He also cited
geographic indications, but noted that the U.S. has had less difficulty
with the UK on this subject than it has in other parts of Europe.

“I would expect to have a much more liberal negotiations and more favorable
free trade for American agriculture vis-a-vis the UK than we would get from
the EU,” Grassley told reporters on a conference call, adding that a strong
deal with the UK could improve the U.S. negotiating position in talks with
the EU. “But I would also expect our goal there with the UK [to be] so we
could get a better deal when we negotiate with the EU.”

“It is a sticky area and all I’m hoping to do is if we get a good deal with
the UK on agriculture, it’s going to embarrass Europe,” he added.

Grassley and other members of Congress have said in the past that
agriculture must be included if a trade deal is to gain the support of
Congress. On Tuesday, Grassley also emphasized that his top priority for
the deal would be that it is comprehensive.

According to Phillipson, the UK is well aware of the importance of
agriculture and said its goal is a negotiation in agriculture that goes
both ways, citing tariff reductions on cheese and Scotch whisky as two
examples of areas in which the UK hopes for additional access to the U.S.

He also argued that there was more to the agriculture debate than
hormone-treated beef and “chlorinated chicken” -- the derogatory term for
U.S. poultry imports used by protestors during the Transatlantic Trade and
Investment Partnership negotiations.

“I think that these are often, in my view, overused as examples and people
conclude that they’re the only things that the U.S. wants to sell us and if
we’re saying we can’t do that then we’re not doing anything in the
agricultural state,” he said. “I think British consumers have a view of
what they want to eat. I think there are conversations we can have about
ensuring that products meet our regulatory standards.… But I think we
should keep a really broad lens about the other agricultural products that
we will want to have more of in the UK.”

Phillipson also cited areas that might not be part of the trade talks but
are likely to come up in “parallel.” Specifically, he said the UK
understood that the U.S. opposed its digital services tax plan and the U.S.
continued to impose Section 232 tariffs on UK exports of steel and
aluminum, as well as other UK products targeted by tariffs in World Trade
Organization-approved retaliation for EU subsidies to Airbus. The UK also
remains part of EU retaliatory tariffs levied on U.S. products after the
Trump administration imposed Section 232 tariffs on steel and aluminum
tariffs.

“We have continued to make clear that we think it is wrong for us to be
subject to U.S. tariffs on steel and aluminium in the interest of U.S.
national security.… There’s also a clutch of issues around Airbus and
Boeing, which is having a really significant impact on Scotch whisky and
other UK products,” Phillipson said. “We would love to get out from under
all those tariffs.”

Business groups from both sides of the Atlantic welcomed the launch of
talks on Tuesday. The U.S. Chamber of Commerce called them a “vital
opportunity” that could produce a “gold standard trade agreement.” The
Confederation of British Industry, one of the largest business groups in
the UK, echoed the call for an “ambitious” deal said the negotiations
“offer a sign of hope to businesses” amid a challenging economic time.
-- *Hannah
Monicken* (hmonicken at iwpnews.com)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
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