UK, US Begin Talks On Post-Brexit Free Trade Deal
UK international trade secretary Liz Truss and US trade representative Robert Lighthizer recently started virtual talks to strike a free trade deal to boost output and jobs by cutting restrictions. Business bodies welcomed the initiative as a pointer to a better economic future. Over £220 billion worth of goods and services are traded between the two sides.
Both sides are reportedly want quick action, perhaps in areas like manufactured goods or financial services. Sticking points exist as well. The United States wants more access for its farmers to British markets. That would require the United Kingdom to relax standards and regulations, which is expected to generate opposition, according to British media reports.
Even if such hurdles are overcome, the gains may be modest. The Department for International Trade's analysis suggests that the UK economy would be just 0.16 per cent, or £3.4 billion, bigger in 15 years if all tariffs with the United States are eliminated.
The UK Federation of Small Businesses (FSB) said small firms should be placed at the heart of the agreement resulting from the talks. FSB national chair Mike Cherry said: “For small businesses, the US is the number one single market of choice for importers and exporters for the next three years, which is why these negotiations are so critical.”
“The government has set a high ambition for UK-US talks, and it will be particularly important to get the details right over the coming months to ensure that any prospective agreement delivers tangible benefits to businesses and communities across the UK,” British Chambers of Commerce director general Adam Marshall said in a statement.
Welcoming the launch of the negotiations, the US Chamber of Commerce’s US-UK Business Council released updated priorities for the talks, underlining dozens of areas where a robust agreement will benefit both sides. There are also several issues where the United States and the United Kingdom can together demonstrate leadership in advancing strong principles globally, it said.
The United States and the United Kingdom are one another’s largest source of foreign direct investment. US companies have invested $750 billion in the United Kingdom, directly supporting 1.5 million British jobs. UK firms have invested $560 billion across all 50 US states, providing jobs for nearly 1.25 million Americans. In 2018, two-way trade in goods and services was valued at $262 billion.