[CTC] U.S., UK consolidate chapter texts as talks reach ‘advanced stages’

[Arthur Stamoulis]

U.S., UK consolidate chapter texts as talks reach ‘advanced stages’
By Hannah Monicken, Inside US Trade 
09/22/2020
The U.S. and the United Kingdom’s bilateral trade negotiations have progressed to “advanced stages,” with negotiators consolidating text in a majority of chapters of a potential deal, British Trade Secretary Liz Truss said on Tuesday.
The fourth two-week round of negotiations ended on Friday, with a fifth scheduled for mid-October -- most likely starting the week of Oct. 19. The fifth round will be the last ahead of the U.S. elections in November. While trade negotiations frequently take years to conclude, the U.S. and UK are moving quickly with an eye to put an agreement before Congress in April to ensure it is covered by Trade Promotion Authority, which expires next summer.
“Significant progress has been achieved since launching negotiations in May 2020, and most chapter areas are now in the advanced stages of talks,” Truss said in a statement <https://www.gov.uk/government/news/negotiations-on-the-uks-future-trading-relationship-with-the-us-update--3>. “In the fourth round, both sides continued to have detailed textual discussions, and negotiators are now in the process of consolidating texts in the majority of chapter areas.”
The two sides tabled their first market-access proposals ahead of the fourth round, which Truss called a “notable milestone.” These initial tariff offers led to “a series of detailed market access discussions,” she said. “[T]he speed at which this stage has been reached demonstrates the momentum behind these negotiations.”
Specifically, the discussions in the fourth round addressed sanitary and phytosanitary measures, financial services, rules of origin, cross-border trade in services, industrial subsidies, trade remedies and “core text,” among other issues, according to Truss. Negotiators have met outside of the official rounds as well, with additional meetings happening this week on telecommunications, intellectual property, market access and rules of origin.
While the two countries are working on all chapters simultaneously as a single undertaking, several chapters are nearing completion.
The Office of the U.S. Trade Representative did not respond to a request for comment on the most recent round of talks.
Despite rapid progress, external factors still threaten the outcome. Overall, the U.S. election looms large, as Inside U.S. Trade has previously reported. A deal with the UK remains a priority for the Trump administration, but former Vice President Joe Biden, the Democratic presidential nominee, has said his early focus will be domestic on economic issues. With this in mind, the UK is hoping to secure substantial progress -- including consolidated chapter texts -- ahead of the election to give the deal a better chance of being finished in the first part of next year even if Biden wins.
For the U.S., its ongoing fight against unilateral digital services taxes and the state of the Irish border will be key factors. The UK is part of the Section 301 investigation into digital tax plans of ten governments, with the threat of tariffs in the offing when it concludes. The UK maintains it wants to see a resolution to the issue forged by the Organization for Economic Cooperation and Development, but is moving ahead with its plans to implement a digital tax.
Congressional Democrats, including House Ways & Means Committee Chairman Richard Neal (MA) and House Speaker Nancy Pelosi (CA), have recently been outspoken in their criticism <https://insidetrade.com/node/169590> of Prime Minister Boris Johnson’s push to rewrite some of the Northern Ireland provisions of the UK-European Union withdrawal deal. The lawmakers have made it clear that if they feel peace at the Irish border -- protected by the Good Friday Agreement -- is in jeopardy, a U.S.-UK trade agreement has no chance in Congress.
On the UK side, British officials including Truss have pushed for the U.S. to lift its tariffs on steel and aluminum, as well as those on British goods hit in retaliation for EU subsidies provided to Airbus, as a part of the overall package. The UK also is likely to face domestic pushback on agricultural market access -- a major issue during the Transatlantic Trade and Investment Partnership talks between the U.S. and EU -- amid fears the UK will lower its standards on food safety and animal welfare.
Parliament’s eventual role in ratifying a final agreement is not yet clear, but members of Parliament are likely to face political pressure from at least some constituencies, including those affected by U.S. tariffs, those concerned about agriculture and those who remain skeptical of the UK’s decision to exit the EU. 
 
Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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