The UK and the United States have begun talks via video conference on a trade deal, amid the backdrop of the coronavirus pandemic and the UK leaving the EU earlier this year.
As a newly independent trading nation, the UK can negotiate trade deals with countries around the world.
The US has long been viewed as a priority target for a deal and the government hopes the partnership could help both countries bounce back from the economic impact of the pandemic.
The timing is critical, as greater certainty that America is willing to play trade ball will help the UK in its negotiations with the EU.
A total of 100 officials will take part in video conferencing across this week, with the UK side led by Liz Truss, the international trade secretary.
Truss said yesterday (Monday, 4 May):
“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.”
The US Chamber of Commerce has also said eliminating tariffs would boost the long-term prospects of both countries as they recover from the pandemic, Reuters report.
Trade in numbers
The US is the UK’s single largest trading partner by country, outside of the EU bloc.
Key numbers for trade between the two countries in 2018 include:
- Total trade worth £201.6bn – a 5.3% increase from 2017
- Total UK exports worth £123.5bn – up 5.7% on 2017
- Total UK imports worth £78.1bn – up 4.8%
(Source: UK Trade in Numbers, February 2020)
£16bn a year boost
The government published a paper outlining the key objectives for the trade talks at the start of March.
Its analysis at the time (before lockdown) suggested trade could increase by £15.8bn, with wages getting a long-term bounce worth £1.8bn.
The paper said removing trade barriers would “deliver huge gains” for 35,000 SMEs already trading with the US.
Winners and losers
The Guardian reported the following sectors could thrive if the UK is able to secure preferential access:
- professional services
- data and tech (including driverless cars and quantum technology)
- cheddar cheese
- textiles
- ceramics
- automotive
- creative industries
However, the same report mentions continued concerns about cheap US imports flooding the UK market, lowered food sanitation standards and parts of the NHS being opened to private investment.
The government is adamant the NHS is not on the negotiating table.
Retaliatory tariffs
The talks begin with retaliatory tariffs currently being imposed by the US on popular UK exports including whisky, cheese and pork.
The Food and Drink Federation released data showing exports from the sector declined 6.7% in Q4 2020 following the imposition of the 25% import tax last October.
The tax was introduced as a response to European subsidies for Airbus.
Truss has said the UK will drive a “hard bargain” in the talks.
