Bilateral UK-US trade deal chances remain alive, US trade chief suggests

Wed 27 Apr 2022
Posted by: Noelle McElhatton
Trade News

uk us trade

US trade representative Katherine Tai said that the prospect of a UK-US free trade deal is not dead and that the two countries’ relationship remained strong.

Speaking after the latest meeting of the UK-US transatlantic dialogue, Tai said it was “awfully dramatic” to conclude that an overarching, pan-US deal was dead.

 “This partnership is strong; you see it in so many different ways, not just in trade but also on the foreign policy and security side,” she said.

Tai and international trade secretary Anne-Marie Trevelyan discussed ways to make the £200bn UK-US trade partnership stronger during two-day talks in Aberdeen and London, as the Independent reports.

Protocol still an issue

Progress on a deal between the UK and US has stalled as US president Joe Biden has focused on the domestic US economy and expressed concern over the progress of Northern Ireland Protocol dialogue between the UK and the EU.

Tai said the impasse over the protocol is one of the main obstacles to a US-UK trade deal, reports Euractiv.

“Let me affirm that it’s a big issue. We are watching, but it’s actually a big issue for the UK and for Europe as well,” Tai said.

She urged the UK and the EU to work together to ensure that the risk from Brexit to the Northern Ireland peace process is eliminated, reports the BBC.

Agriculture trade

The US agenda for trade talks is expected to focus on farm subsidies, and Tai said she wanted to remove the negative perceptions of free trade – to present it to trading partners as benefiting all sides.

In the UK, NFU president Minette Batters reiterated that any negotiations must not undermine standards or protections, given the different regulatory approaches.

“Any trade deal between the UK and US must be balanced and provide wins for both sides,” she said.

Bloomberg reports that the two countries are seeking to work quickly to tighten trade ties even as discussions on a free trade accord remain frozen.

Trevelyan and Tai said they had directed officials to “work at pace over the next several weeks to develop an ambitious roadmap with economically meaningful outcomes” for both nations.

Following the meeting there was agreement to collaborate further on:

  • delivering practical support for SMEs
  • digitising UK-US trade, building resilience in critical supply chains
  • addressing the global trade impacts of Russia’s invasion of Ukraine
  • promoting environmental protection and the transition to net zero
  • supporting high labour and environmental standards
  • promoting innovation and inclusive economic growth for workers and businesses on both sides of the Atlantic.

State deals: Texas first

In the absence of substantive talks on a trade deal, Britain is expected to sign its first economic pacts with US states next month and secure an arrangement with Texas by October, trade minister Penny Mordaunt told the House of Commons last week.

As previously covered in the IOE&IT’s Daily Update, these state level deals aim to advance trade by identifying ways to remove trade barriers, support UK producers to get goods to the US market and create mutual recognition of qualifications.

Such deals could provide the UK with “quick wins” in the absence of a bilateral trade deal, but Mordaunt admitted that the planned agreements would not be legally binding or cut tariffs as a full free trade deal would.

She told the Times that they would amount to bilateral statements “of ambition” with “immediate and practical” benefits for businesses.

The next transatlantic dialogue will take place in Boston in June, Reuters reports.