Trade talks have begun between the US and the UK in the next step towards securing a free trade agreement between the two countries.
United States Trade Representative (USTR) Robert Lighthizer and United Kingdom Secretary of State for International Trade Elizabeth Truss announced the formal launch of negotiations in a joint statement yesterday (5 May).
In light of the Covid-19 pandemic, the first round of talks will be conducted virtually, with negotiators engaging in discussions over the next two weeks in nearly 30 different groups covering all aspects of a comprehensive agreement.
Both parties agree that a Free Trade Agreement (FTA) would contribute to the long-term health of their respective economies, which is “vitally important as we recover from the challenges posed by Covid-19”, and pledged to undertake negotiations at an accelerated pace.
“This current Covid-19 health crisis makes these talks even more urgent,” Ambassador Lighthizer said. “While this is at first a health crisis, each of us is also facing an economic crisis perhaps like never before. But we need to prepare now for the day when the health crisis recedes and lay the foundations for stronger, more resilient economies.
“This crisis has demonstrated how important it is to have strong and diverse supply chains with trusted trade partners to support our economies. It has shown that we need to have a healthy manufacturing base and workers and farmers that are thriving. It has shown that depending purely on cheap imports for strategic products can make us vulnerable in times of crisis. Moreover, it has confirmed that we need to think carefully about our trade policies and how we work with our trading partners.”
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The U.S. & the UK are the first & fifth largest economies in the world, respectively.
— USTR (@USTradeRep) May 5, 2020
The United States and the United Kingdom are the first and fifth largest economies in the world, respectively. Total two-way trade between the two countries is already worth about US$269bn a year, while each country is the other’s largest source of foreign direct investment, with about $1 trillion invested in each other’s economies.
“The US is our largest trading partner and increasing transatlantic trade can help our economies bounce back from the economic challenge posed by coronavirus,” Truss said. “We want to strike an ambitious deal that opens up new opportunities for our businesses, brings in more investment and creates better jobs for people across the whole of the country. As the Prime Minister has said, the UK is a champion of free trade and this deal will make it even easier to do business with our friends across the pond.”
The talks build on work conducted through the US-UK Trade and Investment Working Group, which was established in July 2017, and follow notification to Congress in October 2018 of the Trump Administration’s intent to negotiate an agreement with the UK, alongside separate agreements with the European Union and Japan.
In February 2019, USTR released negotiating objectives in 24 areas for a potential trade deal with the UK, including plans to secure duty-free access for US textile and apparel products and improve competitive opportunities for the sector’s exports.
Prior to publication of the objectives, the American Apparel & Footwear Association (AAFA) said a US-UK deal must ultimately expand trade between the two countries while reducing regulatory and market access costs currently associated with those trade links.